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So are you one of the 6.6% who missed the tax return deadline?

Despite it being an all time record year for receipt, on-line, of ‘on time’ tax returns this year, of the 10.74 million tax returns which were due by 31 January 2013, about 708,740 were – or still are – late. That represents a shortfall of 6.6% and, at a starting penalty of £100 per late return, that’s quite a hefty total penalty. However, one could argue that an additional £71 million in the HMRC coffers in these troubled economic times is very welcome for the exchequer, even if it’s small change in the big scheme of things.

So did you miss the deadline? Here’s what you can expect in terms of additional penalties:

Late return penalties by HMRC

Remember: you still have to submit a tax return even if you do not owe any tax. Taxfile are Read more

It’s official: thousands are on the wrong tax code!

With the tax return deadline being only hours away (midnight 31 January 2014) there is still time to get professional help if you need it – particularly because HMRC  often get it wrong according to new research by UHY Hacker Young.

In just one example, HMRC sent a tax bill to a pensioner which demanded over £576k in tax! With an income of only £11k per annum this was clearly incorrect but what if it had been only hundreds of pounds wrong – would the pensioner have noticed and, if so, would he have been confident enough to question it with the might of HMRC?

According to the research, HMRC employees have been making ‘basic’ errors which have led to problems such as people being on the wrong tax code and consequently underpaying or overpaying tax. While underpaying it may sound attractive on the face of it, chances are the system will catch up and then a correction will need to be made later on, leaving the taxpayer with an unforeseen bill to pay – a real blow for cashflow.

While the UHY Hacker Young research cites an error rate in 2013 of 37% in the sample tested, HMRC are arguing that the research is wrong and that their PAYE coding notices are 99% accurate. Either way, when you consider that Read more

HMRC’s fight against tax avoidance is bearing fruit

HMRC has reported that it raised an extra £20.7 billion in additional revenue during the financial year 2012-13, a result of its continued push on tax compliance and anti-avoidance measures. That’s an increase of £2.1 billion on the preceding year and is actually £2 billion above its original target.

This information comes hot on the heals of the Chancellor’s Autumn Statement, about which we reported in early December. Following that Statement, the Treasury issued documents including a ‘Scorecard’ which measures the impact of the Chancellor’s actions in regard to revenue collections. Of the 59 items listed in the scorecard, 20 fell directly into the categories of “Avoidance, tax planning and fairness” or “Fraud, error and debt”. The measures are estimated to yield a further £1,515 million in 2014-15 and £8,900 million in total by close of play 2018-19. Read more

Tax return help 7 days a week!

By midnight on 31st January 2014, you will need to have submitted your self-assessment tax return to HMRC and have paid them any tax due for the 2012-13 financial year. It doesn’t matter if you have zero tax to pay – you still need to submit your tax return on time or you will be hit with an automatic penalty of £100 (delaying even further can, in the worst case scenario, increase this fine to as much as £1,600).

In view of this, for the month of January you can get help 7 days a week from Taxfile in Tulse Hill, South London.

Our team of tax advisers and accountants can help you with your return whatever your employment status. We can help you register with HMRC if you are not already registered, check your form and help fill it in where necessary, make sure you’ve claimed for any allowable expenses to offset tax, make sure you haven’t missed anything or claimed for something you shouldn’t have claimed, compute any tax due (or due to be refunded), and submit your tax return on-line (the only option available this late into January – paper returns are already too late!). Read more

Autumn Statement by the Chancellor of the Exchequer

George OsborneOn 5 December 2013 George Osborne, Chancellor of the Exchequer, gave his Autumn Statement in Parliament. Key announcements included:

  • A rise for the Personal Allowance, as was long-anticipated, to £10,000 in 2014/15;
  • the higher 40% tax rate threshold also increasing to £41,865;
  • A new, transferable, tax allowance of £1,000 for married couples and those in civil partnerships from April 2015;
  • For employees aged under 21 employers will not have to pay Class 1 National Insurance (‘NI’) Contributions on earnings up to the Upper Earnings Limit;
  • Capital Gains Tax (‘CGT’) for future gains will now also apply to NON-resident individuals from April 2015 (previously this had been applied only to UK resident landlords);
  • For 2014/15 the annual ISA subscription limit will increase to £11,880 (of which £5,940 can be in cash);
  • There were also announcements relating to the continuing clamp-down on tax avoidance, improvements and plans for UK infrastructure, and the proposed inheritance tax (‘IHT’) simplification for trusts.

The full speech transcript can be read here or alternatively view the following video recording: Read more

New tax break for married couples

In this recently filmed interview David Cameron said:

“Marriage is a great institution and it helps to build good and strong societies so I think it’s right to back marriage properly in the Income Tax system – most other advanced industrial countries do and it and we should do it too.”

So on the eve of the Conservative Party Conference at the end of September, the Prime Minister began to unveil plans for a new allowance which will benefit an estimated 4 million married couples, including 15,000 in civil partnerships. It is aimed at those who are not in the higher tax-paying rate (so those couples with a taxable income of less than £42,285 in the tax year 2015-16) – so will benefit only those on a middle or lower income. Read more

What 31 August means for Child Tax Credit (“CTC”) and Child Benefit

On 31 August, Child Benefit and Child Tax Credit (“CTC”) will cease for children, aged 16 at that date, who have left approved* education or training. However if they continue in approved training/education then these benefits may continue but only if the parent or claimant has told HMRC’s Child Benefit Office and/or Tax Credit Office (note that parents/claimants must notify *both* departments if they are claiming both of the benefits).

* “Approved education” means that the child remains in full-time, ‘non-advanced’ education at school/college (e.g. ‘A’ Levels).
“Approved training” means that the child is participating in, has enrolled in, or been accepted for one of the following types of course prior to reaching 19 years old: Read more