Avoid the wrath of the taxman
Brian McGuire outlines some of the pressing and current issues that are impacting upon your finances
Make sure you keep up to date with the tax system changes that could affect you:
HMRC's Tax Return Campaign
The opportunity for people who have not submitted their tax returns for 2009-10 or earlier to come forward and bring their tax affairs up to date doesn't have long to run - deadline is October 2, 2012.
This campaign is focused on higher-rate taxpayers, employed or self-employed, who should have returned other forms of income, such as bank interest or dividends to help them bring their tax affairs up to date.
Previous campaigns, according to HMRC, have yielded nearly £510m from voluntary disclosures and over £120m from noncompliance follow-up from a large number of civil interventions, including over 18,000 completed investigations. HMRC has also said that there are criminal cases underway.
There are a number of consultations closing in September and October, including;
Introduction of the concept of 'taxpayers responsibilities' in respect of claims against the recovery of underpaid tax in line with the HMRC charter.
Remove reference to capital gains tax (CGT) on the basis that the requirement for individuals to self assess for CGT makes the concession redundant.
The Finance Bill received Royal Assent in July. There have been a few amendments to it and there are areas that affect taxpayers.
Some of the main schedules include:
- Schedule 1: High income child benefit charge when net income exceeds £50,000.
- Schedule 3: Relief for expenditure on R&D.
- Schedule 6: SEIS income tax relief in respect of amounts subscribed by individuals for shares in companies carrying on a new business.
- Schedule 35: Stamp duty land tax - higher rate for certain transactions.
- Schedule 38: Tax agents; dishonest conduct.
Sets out the process for establishing whether someone has engaged in dishonest conduct, gives power to HMRC to obtain relevant documents, sets out sanctions and penalties for engaging in dishonest conduct and appeals process.
You can find Finance Act 2012 guides, including guides to SEIS and other enterprise initiatives at www2.accaglobal.com/tax
HMRC has issued an updated notice 700/64.
It replaces the earlier notice from November 2011.
The linked website areas contained in the notice have been updated to reflect changes in advisory fuel rates.
The notice can be found at: http://www.hmrc.gov.uk/vat/managing/reclaiming/motoring.htm
Revenue & Customs Brief 19/12 highlights the national insurance contributions decision following the Upper Tribunal (UT) decision in the case of ITV Services Ltd.
The UT decision stated that where actors' contracts provide for remuneration by way of salary there is a liability for Class 1 National Insurance contributions (NICs) under the regulations on all the remuneration payable under the contract types.
In the brief, HMRC highlights that at the 'time the regulations were introduced it was accepted that a small number of highly-paid celebrity entertainers referred to by the entertainment industry as Key Talent or Marquee Talent, would be excluded because they did not need earnings-related contributory benefit protection'.
It now states that it expects 'those in the industry engaging entertainers to comply with the Tribunals' decisions' and national insurance will need to be paid.
Brian McGuire, Association of Chartered Certified Accountants, Ulster Branch