Tag Archives: HMRC

Scam Alert – A Notice To Clients

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You cannot be too careful in a world where data is easily accessible to everyone. A lot of scams may seem obvious but some clever scams may seem real and could potentially catch you out.

There’s a new scam in town and this one is targeting the elderly. The scammer will call the victim and tell them that ‘HMRC’ would be looking to take them to court over unpaid taxes but if they wished to prevent this they had to provide various details to them – including bank details.

HMRC have confirmed that this a scam and there are a large number of hoax callers who are attempting to trick elderly people into giving away sensitive information.

If you think you have been targeted by this scam, please contact to Action Fraud by visiting www.actionfraud.police.uk or by calling 0300 123 2040 to report this as it is a criminal offence.

Trivial benefits in kind exemption may not be so trivial

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It’s Christmas and the annual minefield of gifts and Christmas parties for employers to navigate. If you are giving your employees gifts to create goodwill, the last thing you want to do is destroy that goodwill with an unexpected tax bill.

However, help is at hand from the new trivial benefits rules.

Previously, the rules were subjective. HMRC allowed exemptions for reasonable gifts but there were no clear thresholds, making it difficult to have certainty about tax treatment.

Under the new rules, benefits and gifts can be tax-free providing that:

-       They cost no more than £50 per benefit and
-       They are not cash or a cash voucher (gift vouchers e.g. for a shop, are allowed).

There is no limit on the number of trivial benefits that can fall into the new rules for employees, providing that they do not form part of the employee’s remuneration for their job or part of a salary sacrifice arrangement.

Special rules apply for directors to limit the overall total for a tax year to £300 of tax-free trivial benefits.

The new rules are good news for generous employers who can now have clarity about what is and is not tax-free, not just at Christmas, but throughout the year. Also, employers who were previously providing vouchers and paying the tax under a PAYE settlement agreement may no longer need to that.

And don’t forget the £150 per person tax exemption for events such as Christmas parties. But do be aware that the limit can only apply to one event, not spread across multiple ones and it includes the extras such as employer funded travel.

The VAT inclusive cost needs to be used when considering if the tax-free limit is reached for both trivial benefits and the annual events exemption.

For more information in trivial benefits, please contact our tax team by emailing tax@pmm.co.uk or by calling 01254 679131.

HMRC Asset Seizures Up 145% In A Year

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The percentage of businesses in the UK having their assets seized is significantly increasing in this tax year. In order to settle outstanding debts, HMRC have been clamping down on businesses who fail to pay their tax bills.

Funding Options announced that HMRC seized assets to recover £42.6m of outstanding debt in the last year, an increase of 145% from the previous year where debts to the Revenue totalled £15.3m.

Under a power called ‘taking control of goods’ HMRC can seize assets in order to settle debts from businesses that have been unable to pay their overdue tax bills. The assets seized are then sold at auction in order to recover the money owed to HMRC.

It’s more important than ever to ensure your tax affairs are in order. If you need any help or advice in organising your tax affairs, please get in touch with our tax team by emailing tax@pmm.co.uk or by calling 01254 679131.

Calling All Landlords…

shutterstock_309255455There have been a lot of changes recently involving tax allowable expenditure and various legislation changes that could have landlords paying hefty fines for non-compliance.

The latest regulation changes landlords are facing are the new ‘right to rent’ checks. This means that from 1 February landlords risk a fine of up to £3,000 per tenant if they let a property to a prospective tenant without first checking they have the right to reside in the UK.

These checks have to meet the following requirements:

- Conducted within 28 days before the start of the tenancy;
- Conducted as specified by the Government and an appropriate record kept.

The Government has recently launched an online checking tool which can be used by landlords to conduct the right to rent checks and can be found here: http://buff.ly/1Wq9EaZ

So what if you’re considering becoming a landlord but are put off by the strict regulations you have to adhere to? Whilst the Government are introducing more and more legislation of late, it is important to remember there are still some benefits of becoming a landlord.

If you’re a landlord worried about the impending changes to the legislation, or if you’re considering becoming a landlord and would like to understand what is involved, please get in touch with Jonathan Cunningham (jonathan.cunningham@pmm.co.uk) or call 01254 679131.

We are running a Buy-To-Let seminar to guide you through the recent changes and how you can maximise your tax efficiency with simple and practical advice. To book, please click the button below.

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Tax Deadline Extension For Flood Victims

shutterstock_356163935With the tax return deadline looming, HMRC have issued guidelines to those affected by recent flooding. Businesses and individuals who are unable to complete their tax returns online by the 31 January deadline as a result of flood damage should contact the HMRC. A new deadline will be agreed directly with the taxpayer by HMRC and fines will apply if this new deadline is missed.

Failure to contact HMRC to alert them of a late filing due to flooding will result in a fine, but those who miss the deadline will have the opportunity to appeal. HMRC will also agree to payment in instalments if taxpayers are unable to pay as a result of the floods.

Please be advised that this is not an indefinite suspension of self-assessment penalties, but a recognition by HMRC that many businesses and individuals are being affected by adversities beyond their control.

Full details are available on the Accountancy Age website. If you require more information and think you may need to apply for an extension, please get in touch with our tax team by phone on 01254 679131 or by email at tax@pmm.co.uk.

Mixed Response To HMRC’s Plans To Digitalise Services By 2020

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In last year’s Autumn Statement, the Chancellor George Osborne revealed the Government’s plans to digitalise HMRC services by 2020.  As part of the reforms, small businesses and self-employed individuals will be required to submit quarterly tax data online. Since the announcement, an official petition has been set up and has gathered over 100,000 signatures in an attempt to block the changes.

Whilst the plans to digitalise HMRC services have on the whole have been praised, some believe it will cause problems for businesses run by non-computer literate owners or those who shun more “sophisticated” tax recording methods. Also, most small business owners spend all their time running their business and don’t really want to spend too much of it compiling information to send to HMRC.

As with almost all petitions gaining over 100,000 signatures, the matter will now go before Parliament on 25 January.

If you are a small business owner or are self-employed, what are your thoughts on the digitalisation of HMRC services? Do you think submitting quarterly data is a blessing or curse? What effect will this have on your business? We’d love to hear from you! Share your thoughts in the comment section below or get in touch with our tax team on Twitter – @pmm_tax.

For further information, you can read a more detailed summary on Accountancy Age here.

HMRC Plan To Scrap Business Record Checks

shutterstock_141007105HMRC have announced their intentions to scrap the Business Records Checks that have been consistently criticised by the Chartered Institute of Taxation for being ineffective.

The checks were originally introduced to allow HMRC to visit and confirm that a business is keeping sufficient information on its income and expenses in order to produce an accurate tax return. For businesses with inaccurate records, there is currently a potential £3,000 fine on top of any unpaid tax, interests and penalties.

Julie Walsh, Tax Manager at PM+M, said; “The reduction in unnecessary HMRC interventions is great news for businesses, but business owners should not forget that it remains crucial for businesses of all sizes to keep records up to date and in good order to protect themselves against any HMRC enquiries and tax demands.”

HMRC investigations can be very costly even if companies have up to date records. One way that we support our clients with this is in providing fee protection insurance to cover any professional fees that may be incurred in the event of an unexpected investigation or HMRC intervention.  This means we can spend time helping clients through the process and defending against HMRC challenges without the client facing a bill for our time.

For more information or advice on protecting your business, or for a fee protection quote, please get in touch with our tax team by emailing tax@pmm.co.uk or calling 01254 679131.

Impact Of Tax Changes For Buy To Let Landlords

shutterstock_286835846We are all aware of the major curve balls that were announced in George Osborne’s Post-Election budget this summer. One of the biggest losers from the announcements are buy-to-let property investors who could potentially see their tax bill more than double.

The major issue that has emerged from the announcements is that the landlords’ ability to deduct the cost of their mortgage interest from their rental income when calculating their tax has been removed. The wealthiest investors, who do not have any mortgages, are unaffected.

The change is due to be introduced in 2017 and fully implemented by 2020. The new rules will wipe out any profits for landlords with mortgage interest being 75% or more of their rental income, net of other expenses. Those paying additional-rate taxes will see their returns on investment disappear once mortgage costs reach 68% of rental income.

Looking into the future, it will become very difficult for middle-income borrowers to get into the buy to let market and those that have just entered the buy to let scheme face some issues in the next couple of years.

One solution for buy to let landlords might be to operate their business via a limited company. However, this option won’t be beneficial for all investors, individuals will need to take advice to determine which structure will be most appropriate for them.

If you are worried about the tax changes and if you would like any advice on what to do next, please contact Jonathan Cunningham at jonathan.cunningham@pmm.co.uk or call 01254 679131.

HMRC Seeking More Access To Information From Third Parties

shutterstock_163502132Government consultation is currently in progress on further steps to tackle the hidden economy by increasing HMRC powers to access data from third parties.

At present, HMRC can access data on bank and credit/debit card transactions. The plan is to extend that to include data held by third party trade facilitators such as electronic payment providers and business intermediaries (including those allowing customers to make orders, purchases or reservations relating to goods, services or digital content).

The move comes as a response to the perceived £5.6bn of missing tax from the hidden economy, of which HMRC plans to utilise its data gathering powers to recoup £860m by 2020/21.

It has been highlighted that the data would be used for identifying compliance issues with businesses, and not the transactions of individual customers. Although, bulk information can be used as an independent check against the data that taxpayers themselves report to HMRC.

HMRC also believes that gathering this information will “reduce errors and improve overall compliance”. Since the start of HMRC’s existence, they have been increasingly pushing for more powers and capturing more data has been important to clamping down on tax avoidance.

Although this may not directly affect you, this highlights the progress HMRC are making in their acquisition of personal data. Having spent years developing software (known as Connect) that seeks links between individual taxpayers and businesses, income, assets and transactions. This will be another stepping stone in HMRC’s plans to seek out discrepancies and recoup some of the missing £5.6bn tax.

The exact format of the new powers and the date they will come into effect is not yet known.  It seems inevitable, however, that HMRC’s powers will increase.

For compliant businesses, the new measures should, in theory, not be an issue. However, the problem is that access to more data can cause tax enquiries to take even longer and cost more in professional fees whilst taxpayers prove to HMRC that all their affairs are above board.

For more information or advice on protecting your business from any fees that come with an HMRC investigation, please get in touch with our tax team by emailing tax@pmm.co.uk or call Julie Walsh on 01254 679131.

Is It The End For Tax Free Termination Payments?

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A consultation is to take place to review the treatment of termination payments with a view to simplifying the treatment of tax and national insurance.

This does however mean that the current rule allowing the first £30,000 of some termination payments to be made tax free could be abolished, as contractual and non-contractual payments are aligned in their treatment for income tax and national insurance purposes.

This could be replaced with a new exemption from tax and national insurance, which will increase in proportion with the length of service.  In addition, no allowance would be available until completion of two years’ service with the company.

There is also a move to link the exemption to any statutory redundancy payment.

HMRC are consulting until 16 October 2015 on the current proposals and our tax team with provide more information as soon as it becomes available.