May Day call for tax returns
HM Revenue & Customs (HMRC) is urging anyone who has still not done their 2010/11 tax return to send it online before the end of April, or be charged daily penalties from 1 May.
Anyone whose Self Assessment return is more than three months late will now be charged a further £10 penalty for each day it remains outstanding, up to a maximum of 90 days. This is on top of the £100 late-filing penalty they have already received.
This means people who file their 2010/11 return online on or after 1 May will be liable to daily penalties, as the deadline for these was 31 January. Daily penalties for paper returns began on 1 February, as paper returns were due by the earlier deadline of 31 October.
Looking ahead, further penalties of at least £300 (or 5 per cent of the tax due, if that is more) will be issued for returns that are 6 and 12 months late.
Anyone who's received a late-filing penalty, hasn't yet sent a return, but thinks they don't need to be in Self Assessment, should call HMRC on 0845 900 0444. If HMRC agrees, the return and any penalty will be cancelled. Visit
www.hmrc.gov.uk/latetaxreturn for further information.
HMRC's Stephen Banyard said:
"We want the returns and not penalties. So, if you haven't sent us your 2010/11 return, you need to do one of two things urgently – either send it online by 30 April, or call us if you think you shouldn't have to complete one."
Real Time Information (RTI) moved a step closer today (11th April) when the pilot was launched, with the first of 10 volunteer employers submitting their RTI return.
RTI will make it easier for employers, pension providers and HM Revenue & Customs (HMRC) to administer PAYE. Under RTI, employers and pension providers will tell HMRC about PAYE payments at the time they are made – as opposed to only at the end of the year.Most employers will join RTI from April 2013 and all employers will be using the RTI service by October 2013.
David Gauke, Exchequer Secretary, said:
"RTI will ensure that the PAYE system meets the needs of the 21st century. It will improve the service to taxpayers by making it easier to ensure that people pay the right tax after a change of job.
"HMRC is committed to a smooth and on-time transition. The start of the pilot today demonstrates that RTI is on track.
"RTI will remove administrative burdens of £300 million a year from employers, mainly from the abolition of the end-of-year PAYE returns process – the biggest single contribution that any tax change could make."
Confirming that HMRC is one of the 10 volunteer employers to join the controlled go live , Stephen Banyard, Acting Director General for Personal Tax, said:
"We have been working in close partnership with stakeholders to ensure that RTI will be introduced progressively, to give time for testing the new systems and processes and allowing them to bed in.
"The pilot will allow us to iron out any wrinkles in a small, controlled environment so that we can ensure RTI is working smoothly as more and more employers join the pilot. We are working closely with employers and the payroll industry but having HMRC take part in the pilot will allow us to see first-hand how it is working from an employer's perspective.
"A specialist team of RTI experts will be on hand to support employers through the pilot."
RTI will support the operation of Universal Credit – the Government's flagship welfare programme, which brings together means-tested in and out of work benefits, Tax Credits and support for housing and will improve work incentives and make work pay.
The Minister for Welfare Reform, Lord Freud, said:
"I welcome the pilot announced today – both Universal Credit and RTI are on track and on time to support the implementation of Universal Credit from October 2013.
"Interlinking Real Time information with Universal Credit will enable us to process claims automatically and more efficiently, allowing us to make the right payment based on real time earnings."
Two free webinars are also available:
• "Accurate Employee Information Matters – it can save time and money" - an 11 minute look at examples and the implications of inaccurate employee information, plus tips on how to avoid this and make sure that employee information is recorded accurately.
https://www3.gotomeeting.com/register/261725806
Thirty new taskforces to tackle tax evasion
Thirty new taskforces to crack down on tax dodgers will be launched by HM Revenue & Customs (HMRC) in 2012/13.
The taskforces will target specific business sectors in specific locations where there is evidence of tax evasion. The likely targets include:
• the rag trade
• the motor trade
• indoor and outdoor markets.
HMRC expects to collect over £50m as a result of 12 taskforces launched in 2011/12 and, with 13 criminal investigations under way, this figure is set to rise.
HMRC will also extend some of the taskforces from 2011 to different locations, including the scrap metal taskforce launched in Scotland in November.
The Exchequer Secretary to the Treasury, David Gauke, said:
"The Government is committed to tackling tax evasion and avoidance. HMRC's taskforces are cracking down on people who choose to break the rules and creating a level playing field for the majority who play by them.
"It is completely unacceptable, at a time when we are trying to bring down the deficit that, while most hard-working people pay the right tax, there are others who try to get out of contributing their fair share. HMRC has received lots of useful information on its evasion hotlines, which shows that the honest majority are quite rightly fed up with the dishonest minority."
HMRC's Director of Local Compliance, Richard Summersgill, said:
"Taskforces only target people who are at high risk of breaking the rules and don't pay the tax they owe. We know we're going after the right people – some taskforces have hit rates of 100 percent so far.
"Only those who choose to break the rules, or deliberately evade the tax they should be paying, will be targeted. If you deliberately seek to evade tax, HMRC can and will track you down, and you'll face not only a heavy fine, but possibly a criminal prosecution as well."
Taskforces come as a result of the Government's £917m spending review investment to tackle tax evasion, avoidance and fraud from 2011/12, which aims to raise an additional £7bn each year by 2014/15.
If you are aware of someone who is evading their taxes you can tell HMRC via the Tax Evasion Hotline on 0800 788 887, via email or by post. Full details can be found at
www.hmrc.gov.uk ENDS
FSB Members are reminded that the FSB offers a tax advice line and investigation protection as part of the membership package. If you are contacted by HMRC as require advice and support call the FSB on 08450 727 727.
Tax authority pulls plug on electricians who don't pay up
Electricians around the country will start receiving letters this month from HM Revenue & Customs (HMRC) warning them to pay any undisclosed taxes.
Under a special, time-limited tax opportunity, electricians can pay the tax they owe, with lower penalties. Normally, up to 100 per cent of the tax owed can be charged to those who fall outside of such opportunities.
The Electricians Tax Safe Plan is aimed at anyone who installs, maintains and tests electrical systems, equipment and appliances – and covers any tax owed, for whatever reason.
This includes people who make mistakes in the amount of tax they pay – even though they have taken reasonable care; those who are careless; or those who deliberately don't tell HMRC about something they should have paid tax on.
Marian Wilson, head of HMRC Campaigns, said:
"Our aim is to make it easy for electricians to contact us, make a full disclosure of income and face a reduced penalty.
"We are using a variety of intelligence sources to target electricians who have not declared their full income. This is the same method we used for the plumbers' campaign, and that intelligence has led to 10 arrests and thousands of investigations, so we know it works.
"The information we are getting is from a wide range of sources, including online advertising, industry bodies, trade directories, professional ‘electrical safety' certificates, trade suppliers and tax records. Using sophisticated software, this detailed information enables us to target those who should come forward and use the Electricians Tax Safe Plan.
"I urge tradespeople in this group who think they owe tax on their income to get in touch and get their tax affairs in order, simply and on the best terms.
"We do not think everyone who receives a letter owes us tax. However, if you owe tax and don't get a letter, do not assume that HMRC will not catch up with you."
The letter, going out to more than 50,000 electricians, explains that once the opportunity expires, HMRC will clamp down on those in the sector who have failed to declare earnings and pay the tax that they owe.
Under the Electricians Tax Safe Plan, electricians can come forward at any time between 14 February and 15 May to tell HMRC they want to take part. Once they come forward, they have until 14 August to make their disclosure and arrange for payment. If they make a full disclosure, most face a penalty rate of only 10 per cent, with a maximum of 20 per cent.
After 15 May, using information pulled together from different data sources, HMRC will investigate those who have failed to come forward. Substantial penalties or even criminal prosecution could follow.
How do electricians let HMRC know that they intend to make a tax disclosure?
• From 14 February, online by completing a form at www.hmrc.gov.uk/campaigns/notify.htm
• Ring HMRC on 0845 601 5041
A dedicated team is available to give to information and advice. The Electricians Tax Safe Plan is the second part of a campaign aimed at tradespeople. The first targeted plumbers and heating engineers. Previous and current HMRC campaigns are: tutors and coaches; the VAT initiative, aimed at people and businesses operating at or above VAT threshold but who have not registered to pay; plumbers and heating engineers; medical professionals; as well as offshore campaigns aimed at those with undeclared offshore earnings.
FSB Members are reminded that the tax and VAT helpline is available to them on 08450 727 727 and that the FSB's tax inspection cover has been extended in include Aspect Inquiries and remains a very important part of the members' benefit package exclusive to FSB members.
New powers to tackle PAYE dodgers
New powers to tackle employers who try to dodge paying their PAYE or National Insurance contributions (NICs) come into effect this spring.
From April 2012, HM Revenue & Customs (HMRC) can require employers to pay a security, where there is serious risk that they won't pay over their PAYE tax deductions or NICs.
The new power will be targeted at employers who deduct money from employees' pay packets, under the pretext of paying their employees' income tax and NICs, but have no intention of paying it to HMRC. These employers often build up substantial PAYE and NICs debts, and ignore HMRC's attempts to contact them. In many cases, the business becomes insolvent, to avoid tax, and sets up a new company soon after, to continue trading (known as a "phoenix company").
This is an extension of a power that has already been successfully used for VAT, insurance premium tax and environmental taxes, and will not affect employers who have genuine payment difficulties.
The required security will usually be either a cash deposit from the business or director, or a bond from an approved financial institution that is payable on demand. HMRC will calculate the amount of the security on a case-by-case basis, depending on the amount of tax at risk, the employer's previous behaviour and other risks.
Businesses that fail to provide a security face a fine of up to £5,000, which will be enforceable by the courts.
More information on the new measure can be found at www.hmrc.gov.uk/thelibrary/tax-paye/paye-securities.htm
Employers who have genuine problems paying their PAYE and NICs should contact HMRC as soon as possible. Visit www.hmrc.gov.uk/payinghmrc/problems/cantpay.htm for more details.
Fresh approach to business records checks
HM Revenue & Customs (HMRC) has announced a fresh approach to its business records checks programme in 2012, following a review.
The review, which included discussions of the pilot programme with trade and professional bodies' representatives, found clear evidence that it is effective in improving record-keeping practices in smaller businesses. However, it recommended that the checks are more targeted in future, linking to available education and support.
The pilot programme of business records checks (BRCs) began in April last year and involved checks by HMRC on the standard of small and medium-sized enterprises' statutory business records. Up until 4 January 2012, 2,437 business records checks had been carried out. These found that 28 per cent of those businesses visited had some issue with their record keeping, and an additional 11 per cent had issues serious enough to warrant a follow-up visit.
HMRC will now postpone making any new business records check appointments until the revamped approach outlined in the report is launched early in the 2012/13 financial year. This will allow further consultation with representative bodies on the implementation of the recommendations in the review and on some details of the new approach. In the interim, HMRC will only undertake visits already booked, as well as follow-up visits to businesses that have already been identified as having seriously inadequate statutory records.
HMRC's Director of Local Compliance, Richard Summersgill, said:
"Four out of ten businesses had an issue with their business records, and of those that required a follow-up visit, we found that some 90 per cent subsequently improved their record-keeping.
"However, after reviewing the pilot programme and listening to the views of businesses and representative bodies, we acknowledge the need for a fresh approach to business records checks.
"The BRC visits provide benefits for the business and HMRC. We want businesses to pay the right amount of tax at the right time, avoiding potential interest and penalties. The checks also give greater assurance to HMRC when the business submits its tax returns."
FSB Members are reminded that the tax investigation support to members has been extended to include aspect inquiries. If you are an FSB Member and need advice on tax or VAT phone the FSB's dedicated legal and tax helpline on 08450 727 727.
P45 set to continue
Plans to introduce a leaver statement instead of a P45 have been withdrawn after consultation about Real Time Information (RTI), HM Revenue & Customs (HMRC) revealed today (6th Feb 2012).
Regulations, as originally drafted, introduced a leaver statement for employers in RTI to use in place of the P45 when employees moved jobs. Following the consultation and a workshop with employers and representative groups, HMRC will retain the P45 for all employees.
Stephen Banyard, Acting Director General for Personal Tax, said:
"We have been working closely with employers and stakeholders about the introduction of RTI. Employers told us to keep the P45 – which is exactly what we have done. RTI is on track and we want to work in partnership with employers and other stakeholders to make its introduction as smooth as possible."
Further information on RTI is available on the HMRC website at http://www.hmrc.gov.uk/rti/index.htm
Writing on the wall for paper VAT returns
HMRC is reminding VAT-registered businesses that all VAT returns must be submitted online from this spring, meaning paper returns will soon be a thing of the past.
Currently, only newly-registered businesses and those with turnovers of more than £100,000 have to submit their VAT online, as well as pay electronically. Anyone else can send HM Revenue & Customs (HMRC) a paper VAT return, if they wish.
That is changing from April, when all 1.9 million VAT-registered businesses in the UK will have to submit their VAT returns online, and pay electronically, for accounting periods beginning on or after 1 April 2012.
Every VAT-registered trader not already required to submit online will receive a letter from HMRC in February, advising them of the change, and what steps they need to take.
At the end of last year 24,941 businesses in the West Midlands were still filing paper VAT returns including:
Hereford 1978
Shrewsbury 4241
Telford 1010
Worcester 2155
To submit your VAT return online, you need to be registered and enrolled for HMRC's VAT Online Service. To do this, visit www.online.hmrc.gov.uk and click "Register" under the "New user" section. Then follow the instructions.
Online filing has a number of benefits, compared to paper filing:
• an automatic acknowledgement that your return has been received;
• a handy sum checker; and
• an email alert to remind you when your next online return is due (as, after April, HMRC will stop sending out paper returns to customers who are now required to submit online).
For details on the support available to help you move from paper to online VAT returns, visit www.hmrc.gov.uk/vat/online-return-help.pdf
Further help and advice is available from HMRC's website at www.hmrc.gov.uk/vatonline If that doesn't answer your question, call the VAT Online Services Helpdesk on 0845 010 8500 (available between 8am and 6pm, Monday to Friday).
HMRC ready to invoke fuel concession for gritting as weather turns
HM Revenue & Customs (HMRC) is monitoring the Met Office forecasts of extreme weather for parts of the UK, so that they are ready to respond to the needs of farmers who use ‘red diesel' in their tractors when gritting public roads for their local communities.
Under normal circumstances, only vehicles designed and used solely for the purpose of gritting are entitled to use red diesel. Consequently, farmers who wish to use their tractors to grit public roads for their local communities are legally prevented from doing so.
HMRC understands that extreme weather requires a flexible response and they have made plans to relax the rules on gritting temporarily, in the event of the UK experiencing a prolonged period of severe weather.
If a temporary relaxation of the rules is required a formal announcement will be made on HMRC's website. Under existing rules, any vehicle, including a tractor, that clears snow from public roads by means of a snow plough or similar device, is allowed to use ‘red diesel' when doing so.
Farmers are often best placed to deliver the skills and equipment needed to keep rural roads open, provide access to local schools and hospitals, and prevent remote communities from becoming isolated by blizzards.
Further information can be obtained by calling the Excise and Customs Helpline on 0845 010 9000.
Tutors and coaches have less than one month to register for the Tax Catch Up Plan
HMRC advises private tutors and coaches have less than a month left to tell HM Revenue & Customs (HMRC) about any tax that they owe.
HMRC offered a special tax plan, the Tax Catch Up Plan, in October 2011. Registering by 6 January 2012 ensures that tutors and coaches don't lose out on the best terms to disclose and pay what is owed.
The Tax Catch Up Plan is for people providing tuition or coaching, regardless of whether they have a registered qualification. It is aimed at those who profit from tuition and coaching as a main or secondary income, on which the correct tax has not been paid.
The opportunity is available to people teaching traditional academic subjects, fitness and dance, musical instruments, art, life coaching, personal training and other instruction.
After 6 January 2012, using information pulled together from different sources, HMRC will investigate those who have chosen not to come forward.
Marian Wilson, Head of HMRC Campaigns, said:
"Tutors and coaches who have notified us of their intention to disclose unpaid tax will have until 31 March to tell us what they owe and make arrangements to pay. From January we will use the information at our disposal to investigate tutors and coaches who have not declared their full income. I therefore strongly urge anyone in this group who thinks they may have outstanding income tax liabilities to get in touch with HMRC and get their tax affairs in order. This is the first step for those with undisclosed income or gains to avoid a full tax investigation and much higher penalties. Contact us before we contact you."
The Tax Catch Up Plan has two stages:
- By 6 January 2012, tutors/coaches/instructors must register with HMRC to "notify" that they plan to make a voluntary tax disclosure.
- By 31 March 2012, those who have registered to notify must tell HMRC what they owe and pay the tax, interest and penalties due.
People can register online by completing a notification form www.hmrc.gov.uk/ris/tcup/index.htm or by calling HMRC on 0845 601 8817. A dedicated team is ready to help, Monday to Friday, 08:00 until 19:30.
Don't send your tax return on paper
If you haven't sent in your 2010/11 Self Assessment return, you must now send it online if you want to avoid a penalty, as the 31 October deadline for paper returns has now passed.
Send in a paper tax return on or after 1 November, and you'll have to pay a £100 penalty – even if there is no tax to pay or you pay the tax due on time – following the introduction of a new penalty regime this year. The longer you delay, the more you'll have to pay, as there are further late-filing penalties after three, six and twelve months.
Your online tax return must reach HM Revenue & Customs (HMRC) by 31 January 2012. If you haven't sent an online tax return before, make sure you register for HMRC Online Services by 21 January. This will allow HMRC time to send you your Activation Code. Registering for HMRC Online Services is simple – just go to www.hmrc.gov.uk/online
It's important to remember that, if you do send a paper return after the 31 October deadline, you cannot avoid the £100 penalty by subsequently filing online.
For help and advice on completing a return, visit www.hmrc.gov.uk/sa or call the Self Assessment helpline on 0845 9000 444.