Tag Archives: business records

Newsletter – November 2012

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eNEWS – November 2012

In this month’s enews we report on HMRC’s expanded online VAT service and the latest round of HMRC campaigns.

Please contact us if you would like any further details on any of the issues covered.

 

eNEWS quicklinks
Changes to VAT online services HMRC close in on ‘tax cheats’
HMRC announce latest targets Updated approach to Business Records Checks
VAT registration threshold no longer due to those not established in the UK Parties for employees
Simpler health and safety guidance More flexibility in the leave available to parents
Payroll RTI system ‘unrealistic’ Improving gender diversity in boardrooms
Proposal to remove red tape on building extensions

Changes to VAT online services

HMRC have announced various changes to their online services including the introduction of the VAT online registration service which was promised earlier this year.

They have also taken the opportunity to introduce a new online variations service which should allow businesses to:

  • make changes to the principal place of business and contact details
  • deregister for VAT
  • apply for Annual Accounting or Flat Rate Scheme
  • view and print the VAT certificate and
  • enrol for VAT Online.

Please do get in touch if you would like any assistance with any of these issues.

Internet link: HMRC news

HMRC close in on ‘tax cheats’

HMRC have launched an advertising campaign warning ‘tax cheats’ to declare all their income before it is too late.

The campaign is part of HMRC’s targeted approach to help taxpayers pay the right amount of tax, at the right time. Guidance is available at www.gov.uk/sortmytax.

David Gauke, Exchequer Secretary to the Treasury, said:

‘Most people play by the rules and pay what they owe, but HMRC is cracking down on those who don’t. Using the £917 million the government has made available to tackle avoidance, evasion and fraud, HMRC is closing in on tax cheats.’

‘It always makes sense to declare all your income and tax dodgers are simply storing up trouble for the future; getting caught means higher fines, and in the most serious cases criminal prosecution. There is an alternative. Simply visit the new website and make a fresh start.’

Internet link: HMRC press release

HMRC announce latest targets

HMRC have launched new taskforces to tackle ‘tax cheats’ in the following sectors:

  • the rag trade (manufacturing, wholesale, retail and textile recycling in the Midlands, North Wales and the North West)
  • the Scottish alcohol industry and
  • the rental property sector in the South East.

David Gauke, the Exchequer Secretary, said:

‘The vast majority of people play by the rules. We will not tolerate tax evasion and will crack down on the minority who choose to break the rules.’

‘It cannot be fair that, while most people are paying the right tax, a tiny minority are not paying what they should.’

‘HMRC is on target to collect more than £50 million as a result of taskforces launched in 2011/12.’

Internet links:

Press release on the rag trade Press release on alcohol industry Press release on rental property

Updated approach to Business Records Checks

HMRC have announced an updated approach to business records checks.

Following a pilot programme of Business Records Checks (BRC), which looked at the records of in excess of three thousand SMEs, HMRC have amended their approach to these checks.

Businesses which HMRC believe are more likely to be at risk of having inadequate records will initially be contacted by letter. HMRC will then phone the business to go through a short questionnaire.

Depending on the outcome of this phone call, HMRC will subsequently confirm to some businesses that no further action is required. Where some issues are identified, businesses will be offered targeted self-help education options.

HMRC have confirmed that where businesses are assessed as being at risk of keeping inadequate records they will be referred for a BRC visit.

Please let us know if HMRC contact you about a BRC.

Internet link: HMRC BRC

VAT registration threshold no longer due to those not established in the UK

A decision in the European Court of Justice has confirmed that only businesses established in a Member State can benefit from its domestic VAT registration threshold.

As a consequence, from 1 December 2012, ‘non-established taxable persons’ (NETPs) will no longer be able to benefit from the UK VAT registration threshold. This means that they will be required to register for UK VAT when they make their first supply of goods or services in the UK regardless of the value.

NETPs already making supplies here will be required to register for UK VAT with effect from 1 December 2012.

As detailed in the HMRC guidance:

‘From 1 December 2012, any non-established business which makes or intends to make taxable supplies in the next 30 days has 30 days from the date it formed that intention to notify HM Revenue & Customs (HMRC) that it is required to register for VAT. Businesses which become required to register in the UK on 1 December 2012 will have to notify HMRC of that fact by 30 December 2012.’

Please contact us if you have any concerns in this area.

Internet link: VAT Brief

Parties for employees

With the season for office parties fast approaching we thought it would be a good idea to remind you of the tax implications. The good news is that, unlike entertaining customers, the costs of entertaining employees are generally allowable against the profits of the business.

But what about the tax consequences for the employees themselves? Is it a perk of their jobs and will they have to pay tax on a benefit?

Generally, as long as the total costs of all employee annual functions in a tax year are less than £150 per attendee (VAT inclusive) there will be no tax implications for the employees themselves. In considering this limit make sure you have included all the costs, which may include not only the meal itself but also any drinks, entertainment, transport and accommodation that you provide.

If the costs are above the £150 limit then the full cost will be taxable on the employee. In that case do get in touch so we can advise you how best to deal with them.

Internet link: HMRC guidance

Simpler health and safety guidance

The Health and Safety Executive (HSE) has launched an online ‘Health and Safety Toolbox’ aimed at smaller, low-risk businesses. It is hoped that the Toolbox, which can be accessed from the right hand side of the HSE’s home page, will make it quicker and easier for small businesses to find the information that applies to their industry. This should enable them to manage health and safety issues themselves, without the need to use health and safety consultants.

Employment Minister Mark Hoban said:

‘Small and low risk businesses should be focusing their time on growing and becoming a success not having to waste precious time and money on unnecessary bureaucracy. This Toolbox will make it quick and simple for businesses to discover everything they need to know about health and safety.’

Internet links: Press release HSE website

More flexibility in the leave available to parents

Deputy Prime Minister Nick Clegg has announced that parents will be able to share up to 12 months leave after the birth of a child from 2015.

The plans will allow working parents to take up to 52 weeks off in total either together or in separate blocks and will be more flexible than the current system.

Nick Clegg said:

‘Reform is long overdue and the changes we are making will shatter the perception that women have to be the primary care-givers.’

‘In the future, both mothers and fathers will be able to take control of how they balance those precious first months with their child and their careers.’

Internet link: BIS top stories

Payroll RTI system ‘unrealistic’

The Institute of Chartered Accountants in England and Wales (ICAEW) has warned that the RTI reporting system will be ‘at best unrealistic and at worst impossible’ for small employers. This is despite HMRC publishing proposals explaining when employers will be allowed up to an extra seven days to send some information to HMRC.

Frank Haskew, head of ICAEW Tax Faculty, said:

‘We are particularly concerned about the impact this will have on smaller businesses, which are the lifeblood of the UK economy and essential if the UK is to continue to grow.’

Under the RTI, employers will have to submit payroll information to HMRC electronically on or before every payday, with potential penalties applying to employers submitting returns late.

The ICAEW suggestion is that HMRC move the RTI return date to the 19th of the month following the tax month of payment, which is the same as the current PAYE due date, being familiar to employers.

RTI is compulsory for most employers from April 2013.

We will keep you informed of developments.

Internet link: ICAEW press release

Improving gender diversity in boardrooms

The CBI commented on proposals from the European Commission, aimed at achieving a better gender balance in the boardrooms of some European companies. The proposals apply to companies listed on stock exchanges in EU’s Member States.

Katja Hall, CBI Chief Policy Director, said:

‘Businesses will be relieved that the Commission has listened to their concerns. These new proposals rightly focus on the need to improve boardroom diversity, while allowing firms to recruit the best candidates from the widest possible talent pool. MEPs should get behind this approach.’

‘Increasing the number of women in boardrooms is important for businesses, who know that gender diversity brings greater creativity, higher performance and better customer insight. That is why firms are already taking action to increase the flow of women to the top, such as targeting mentoring schemes at women and offering flexible working.’

Internet links: CBI press release Europa press release

Proposal to remove red tape on building extensions

The government has announced proposals to make it quicker and cheaper to make improvements to homes and business premises.

The proposals would mean that, for a limited period, much of the red tape required to complete a planning application for a small-scale, single-story extension would be removed. It has been confirmed that the current safeguards that ensure neighbours and communities are not adversely affected will remain in force. The proposals will also not apply to protected areas or listed buildings.

Internet link: News

Don’t let this happen to you!

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I was recently visited by a potential client, who had enquired about the possibility of using our services.  We had the usual discussion about the type of business, what was needed and the current situation.

The first alarm bell rang when they told me that they had been disengaged by their previous advisor, due to non payment of fees, but then things got a whole lot worse!

There were issues with VAT registration, PAYE registration, P11D issues, current accounts being overdue by nearly six months, previous accounts submitted late and outstanding tax returns, amongst many other things.  The potential for penalties and interest were becoming very large at this stage.

This got me thinking, how on earth does one get into this mess?  I might argue that a previous accountant might shoulder part of the blame, for not picking up the lack of VAT registration, due to the amount of turnover, but I only had the potential clients word for that!  And, why did he leave it so long to try to get it sorted?

So – how can you avoid this happening to you?

  • Engage an accountant that has been recommended to you BEFORE you start out in business.
  • Discuss with the accountant ALL of the relevant facts relating to your business and your personal tax affairs – make sure they have ALL of the information they require.
  • Make sure you are clear from the outset as to what is required from you and what the accountant will be doing – this is usually done in the form of an engagement letter, if not, make sure you clarify.
  • Make sure you are clear about your VAT, PAYE, corporation tax and personal tax requirements.
  • Make sure you keep accurate and up to date records, from day one.
  • Make sure you keep your accountant notified of ANY correspondence from HMRC, Companies House and any other Government bodies – do this on the same day that you receive it – IGNORE NOTHING!
  • Keep in regular touch with your accountant, if you’re thinking of doing anything with the business, ask your accountant first, just to make sure it won’t affect anything that you are unaware of.
  • Make sure you are aware or made aware of ALL of the deadlines that are applicable to your business (there will be many!), if in doubt either ask for a list or ask your accountant to remind you – BEWARE, there are more and more penalties now for late or incorrect submissions and there will soon be more scope when PAYE Real Time Information and Pensions Auto-Enrolment kicks in!
  • Make sure your accountant is aware if you need something urgently for any reason, so that they can factor this into their workload.  Above all – PLEASE DON’T LEAVE ANYTHING UNTIL THE LAST MINUTE

Don’t forget there is also lots of FREE advice on the web, such as DirectGov, HMRC, Companies House, BIS and many more.  These can’t and shouldn’t  replace the accountants advice, but can help for further understanding or maybe even give you more questions to ask your accountant!

Once you have done all of the above for a while, it will become second nature – you will have a much less cluttered mind, fewer worries and will be able to concentrate on what you do best – running your business, let your advisors do the rest.  And finally don’t forget to consider what other advisors you might need – Legal, HR etc.

You know where we are when you need us!

 

 

Newsletter – October 2011

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In this month’s enews we report on HMRC’s latest disclosure opportunity. Please contact us if you would like any further details on any of the issues covered.

 

eNEWS quicklinks
HMRC launch the Tax Catch Up Plan Plan to boost the economy
HMRC extend Business Records Checks Make sure your employee information is correct
National Insurance Numbers – by letter HMRC issue updated guidance for employees on childcare
Importing and Exporting Guide

 

HMRC launch the Tax Catch Up Plan

HMRC have launched a campaign to target private tutors and coaches who have undeclared tax liabilities.

The Tax Catch Up Plan (TCUP) is aimed at individuals who provide private lessons, or who profit from tuition and coaching, as a main or secondary income where the correct tax has not been paid. The types of tuition, instruction or coaching covered by the TCUP include tuition of traditional academic subjects, fitness and dance instruction, musical instrument tuition, art, services provided by life coaches and others.

Under the TCUP, tutors and coaches have until 31 March 2012 to advise HMRC about their outstanding tax for the years up to 5 April 2010, and pay what they owe. HMRC have confirmed that those who come forward by the deadline are likely to receive the best possible terms for paying the tax owed. If they have to pay a penalty, it is unlikely to be more than 20%.

Those who wait for HMRC to come to them will find that they have to pay much higher penalties (as much as 100% and may even face criminal prosecution). After 31 March 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:

‘Our campaigns are designed to ensure tax is paid so that the money is available to spend on public services used by everyone. We are making it as easy as possible for people offering tuition and coaching to use this unique opportunity to put their tax affairs in order by making a full disclosure, and benefit from the best possible terms.

We are using various intelligence sources to identify and then target those who do not take advantage of this opportunity to declare their full income. The message is clear: contact us before we contact you.’

The Tax Catch Up Plan has two stages:

  • From 10 October 2011 to 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 which can be accessed using the link below or by calling HMRC on 0845 601 8817.

Please do get in touch if you have any concerns in this area.

Internet links: Press release TCUP guidance

Plan to boost the economy

The Institute of Directors (IoD) has proposed a new economic growth plan which aims to improve business investment and development. ‘The Route Back to Growth’ contains several recommendations including:

1. Monetary policy – Quantitative easing; launch QE2 in October with an initial £50 billion
2. Fiscal rules – A new 35% of GDP public spending target by 2020
3. Taxation – Remove the 50% top rate of income tax
4. Taxation – Extended corporation tax cuts to 15% by 2020
5. EU policy – Use future Treaty and/or budget negotiations to repatriate key employment powers
6. Infrastructure – Ring-fence transport, energy and ITC infrastructure spending
7. Energy policy – Do no harm – don’t sacrifice UK competitiveness for green credentials
8. Education – Further expand free school provision with profit incentives
9. Taxation – End the £100,000 personal allowance anomaly
10. Competition policy – Intensify competition policy both domestically and within the EU
11. Regulation policy – Radical civil service reforms to promote de-regulation
12. Employment Law – Nine major changes to free up the labour market
13. Planning – Incremental ‘Green Belt’ and developer rights to propose, and reduce political influence over infrastructure planning
14. Public sector performances – Greater decentralisation of public sector pay
15. Public sector performances – No watering down of reforms to unfunded public sector pensions

The IoD claims that if its suggestions are adopted by the government, it could make the UK one of the most advanced economies in the world.

Internet link: IoD plan

HMRC extend Business Records Checks

HMRC have announced that they are extending their Business Records Checks programme.

These checks were piloted earlier this year and involved checks on the adequacy of Small and Medium Sized Entities’ business records. The pilots apparently found that around 44% of businesses visited had issues with their record-keeping, while around 12% of those visited had seriously inadequate records.

HMRC are now extending this activity from mid-September to cover a number of key areas across the UK. As part of this, the number of full-time staff employed on the programme will rise from 30 to 120.

HMRC are planning to complete up to 12,000 checks by the end of the current financial year, with 20,000 provisionally planned for 2012/13. HMRC are increasing the number of visits so it can refine the process, before final decisions on a national roll-out are taken in the New Year. If you have any concerns in this area please contact us.

Internet link: Press release

Make sure your employee information is correct

HMRC are reminding employers of the importance of correct employee information and have updated the questions on the introduction of Real Time Information (RTI). They have issued a number of questions and answers stressing the importance of correct details in the run up to the introduction of RTI in 2012/13.

According to the advice which has been issued:

‘It has always been important to make sure the information that you send HMRC about your employees is accurate to help ensure that your employees pay the correct Income Tax and NICs. Improving the accuracy of the information you hold and send to HMRC will help match the information to the correct HMRC record. This could save you money by helping to reduce the number of employee enquiries you receive.

This is not just important for tax and NICs. From October 2013, RTI will support Universal Credit by providing the Department for Work and Pensions with up to date information about claimants’ employment income. Ensuring your employee information is correct will help to ensure they receive the right amount of Credit.

As part of the process for an employer joining RTI, HMRC will align the records of employees held on the NPS system and the records held by employers. HMRC will publish more information about the ’employer alignment’ process soon.

In the meantime HMRC recommends that you start to prepare for RTI by checking the information you hold.’

Over 80% of matching problems experienced by HMRC are caused by incorrect information about an individual’s name, date of birth or National Insurance number.

Please use the following link to read the guidance on the correct format for information.

Internet link: HMRC RTI FAQs

National Insurance Numbers – by letter

HMRC have for many years notified individuals of their National Insurance number (NI No) for the first time by sending them a plastic NI No card.

Last year, as part of the Government’s Spending Challenge, it was announced that HMRC would stop issuing NI No cards and send letters instead. The government estimate this will save approximately £1 million per annum.

Late last year HMRC introduced a system of notification by letter for those requesting a reminder of their NI No, and in July this year adults requesting a number for the first time will be issued with one by letter by Jobcentre Plus.

HMRC have confirmed that they will stop sending NI No cards altogether. Anyone needing a number (adults and juveniles approaching age 16) will now receive their NI No on a notification letter.

HMRC are advising employers that new employees may now have a letter or a card with their NI No information and that either is acceptable.

Internet link: HMRC NI news

HMRC issue updated guidance for employees on childcare

HMRC have updated their guidance on employers helping with childcare costs.

Leaflet IR155 which sets out the circumstances and the amounts of tax and National Insurance (NI) free childcare costs that an employer may provide has been updated.

The update reflects the change to the rules which mean that where a new claimant enters into a scheme from 6 April 2011 the amount of exempt childcare is restricted

  • for higher rate taxpayers to £28 a week, and
  • for additional rate taxpayers to £22 a week.

The amount available to basic rate tax payers and those in relevant schemes prior to 6 April 2011 remains at £55 a week.

If you would like any further information on tax and NI efficient childcare please do get in touch.

Internet link: IR155 leaflet

Importing and Exporting Guide

HMRC have issued a ‘Guide to Importing & Exporting – Breaking down the Barriers’. According to the introduction to the lengthy document:

‘This information pack is for anybody, whether already in business or not, who wishes to bring goods into the United Kingdom (UK) from outside the European Union (EU), or intends to send goods from the UK out of the EU.

The pack has been designed to help you get started on importing and / or exporting, and to help you better understand the procedures involved in these activities.’

If you have any queries or would like advice in this area please do get in touch.

Internet link: HMRC guidance

Newsletter – March 2011

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In this month’s enews we report on several employment related issues. Please browse through the articles and get in touch if you have any further queries or would like more information.

 

eNEWS quicklinks
Budget Statement Enterprise Investment Scheme (EIS) and Venture Capital Trusts (VCTs)
Corporation tax rates Approved mileage allowance payments (AMAP)
Entrepreneurs’ Relief (ER) Research and Development (R&D) Tax Credits
Enterprise Zones £1.3 million tax credits identity thief jailed
HMRC launch business records tools Plumbers Tax Safe Plan
Fuel Prices Help for small businesses
HMRC online services unavailable Standard rate of VAT- updated guidance
Retirement and the removal of the Default Retirement Age

 

Budget Statement

George Osborne presented his second Budget on Wednesday 23 March 2011.

In his statement he said that the ‘Budget is about reforming the nation’s economy, so that we have enduring growth and jobs in the future’.

The Main Budget proposals

The government had previously announced changes which apply from April 2011. However the Statement also included several new announcements, some of the more significant of which are set out below:

An additional 1% cut in the main rate of corporation tax to 26% from April 2011.

  • Enhanced tax incentives for investment in higher risk companies and for SMEs investing in research and development.
  • Reintroduction of Enterprise Zones.
  • Entrepreneurs’ Relief limit doubled to £10 million.
  • An increase in the mileage rate payable to own car drivers.
  • Consultation on integrating income tax and national insurance contributions.
  • Reduced inheritance tax rates for those giving one tenth of their estate to charity.

Some of these items are covered in more detail in the following articles. To access the full Budget information visit the Treasury website using the link below.

Internet link: Treasury Website Budget

Enterprise Investment Scheme (EIS) and Venture Capital Trusts (VCTs)

EIS and VCTs are designed to encourage private individuals to invest in smaller unquoted trading companies which may be perceived as higher risk. While the EIS requires an investment to be made directly into the shares of the company, VCTs operate by indirect investment through a mediated fund.

Currently EIS investors may be given income tax relief at 20% on their investments of up to £500,000 a year. Legislation will be introduced to increase the rate of tax relief to 30% for shares issued on or after 6 April 2011, subject to State aid approval.

Future changes

Subject to State aid approval, legislation will be introduced to make the following changes to the EIS and for shares issued on or after 6 April 2012.

The thresholds for the size of the company which may benefit from both types of investment will be increased to fewer than 250 employees and £15 million gross assets before the investment.

The annual amount which can be invested in an individual company is to rise to £10 million.

The annual amount that an individual can invest through EIS is to increase to £1 million.

Internet link: Budget TIIN

Corporation tax rates

Legislation will be introduced in Finance Bill 2011 to reduce the main rate of corporation tax from 28% to 26% for the Financial Year commencing 1 April 2011 and then to 25% for the Financial Year commencing 1 April 2012. The main rate of corporation tax generally applies to companies with profits of more than £1.5 million. It had previously been announced that the main rate would reduce from 28% to 27% followed by further 1% graduated reductions until it reached 24% by 1 April 2014. Instead the main rate is set to reduce to 23% by 1 April 2014.

The small profits rate of corporation tax, which generally applies to companies with up to £300,000 of profits, is to reduce from 21% to 20% also with effect from 1 April 2011. This had already been announced.

The effective marginal corporation tax rate for profits between £300,000 and £1.5 million will be 27.5% from 1 April 2011.

Internet link: Budget TIIN

Approved mileage allowance payments (AMAP)

The AMAP rates can be used to claim the cost of business mileage in an employee’s own vehicle. The rates cover cars, vans, motorcycles and bicycles. Where an employer pays less than the published rates, employees can make a claim for tax relief for the shortfall.

With effect from 6 April 2011 the rate of the AMAP for cars and vans will be increased from 40p per mile to 45p per mile for the first 10,000 miles of business travel in the tax year. The rate for mileage above 10,000 miles will remain at 25p per mile.

This may mean that drivers receiving mileage allowances in excess of the AMAP will see a reduction in their tax and NICs liability. For those drivers who receive less than the AMAP their claim for tax relief on the shortfall will be increased.

An allowance for passenger payments currently in place for employees at 5p per passenger per mile will be extended to volunteers who carry passengers as part of their volunteering duties. This extension will apply with effect from 6 April 2011.

Internet link: Budget TIIN

Entrepreneurs’ Relief (ER)

ER was introduced in April 2008. Subject to satisfying certain conditions, including the current lifetime limit of £5 million, capital gains on qualifying business disposals by individuals and certain trustees are eligible for ER. Qualifying gains are liable to CGT at 10%.

The lifetime limit is applied to the aggregate of gains that benefit from ER, whatever the year in which the disposal took place. Any gains in excess of the lifetime limit are liable to CGT at the same rates as other chargeable gains.

The lifetime limit will increase to £10 million with effect for qualifying business disposals on or after 6 April 2011.

Where individuals or trustees make qualifying gains above the £5m limit before 6 April 2011, no additional relief will be allowed for the excess.

Internet link: Budget TIIN

Research and Development (R&D) Tax Credits

Subject to State aid approval, legislation will be introduced in Finance Bill 2011 to increase the rate of the additional deduction for expenditure on R&D for companies that are small or medium-sized enterprises (SMEs) from 75% to 100% for expenditure incurred on or after 1 April 2011, giving a total deduction of 200%. The rate of Vaccine Research Relief for SMEs will be reduced to 20% from the same date.

The government also plans to introduce further changes subject to consultation and State aid approval in Finance Bill 2012 in respect of expenditure incurred on or after 1 April 2012 as follows:

  • to abolish the rule limiting a company’s payable R&D tax credit to the amount of PAYE and NICs it pays
  • to abolish the £10,000 minimum expenditure condition
  • to change the rules governing the provision of relief for work done by subcontractors under the large company scheme
  • to increase the rate of the additional deduction for expenditure on R&D for SMEs by a further 25% to give a total deduction of 225%
  • Vaccine Research Relief will not be available for SMEs.

Internet link: Budget TIIN

Enterprise Zones

The government announced the location of ten new urban Enterprise Zones within the following Local Enterprise Partnership areas: Birmingham and Solihull; Leeds City Region; Sheffield City Region; Liverpool City Region; Greater Manchester; West of England; Tees Valley; North Eastern; the Black Country; and Derby, Derbyshire, Nottingham and Nottinghamshire. In addition, London will have an Enterprise Zone and be able to choose its site.

The government will make a range of policy tools available to all zones including:

  • a 100% business rate discount worth up to £275,000 over a five year period for businesses that move into an Enterprise Zone during the course of this Parliament
  • government and local authority help to develop radically simplified planning approaches in the zone.

It will consider, in a limited number of cases, the scope for introducing enhanced capital allowances.

Internet link: Treasury Budget document

£1.3 million tax credits identity thief jailed

Olaide (John) Taiwo, aged 35, has been jailed for his part in stealing the identities of at least 350 people and using the identities to submit over 300 fraudulent tax credit claims.

A woman who also took part in the fraud was also convicted. She will be sentenced in April.

Richard Young, Senior Investigating Officer for HMRC said:

‘This pair blatantly hijacked the identities of over 350 innocent people and stole from British taxpayers by submitting over 300 fraudulent tax credit claims between June 2004 and July 2008. They deliberately attacked and abused a system designed to provide financial help to the most vulnerable people in our society. The sentences given will be a warning to anyone considering committing this type of fraud – it will not be tolerated. HMRC will pursue, prosecute and reclaim the financial gain from those found to commit these types of crime. I urge anyone who has information about Tax Credits fraud, to call the National Benefit Fraud Hotline on 0800 854 440 and help us stamp this fraudulent activity out.’

Upon sentencing Taiwo, His Honour Judge Simon Davis said:

‘This is a fraud on a substantial scale. You lied and sought to manipulate with ease and confidence and with an arrogance that was astonishing. You were intimately connected with every aspect of the fraud, stealing real details of real people to commit identity fraud on the large scale.’

As part of the investigation, a search of his home uncovered evidence of the fraud taking place, including details of numerous bank accounts held in the defendants’ names and aliases, plus documentation which held hundreds of innocent people’s identities. HMRC investigators also seized £70,000, which is believed to be proceeds of the crime.

Internet link: Press release

HMRC launch business records tools

HMRC are making available on their website checklists and toolkits which they believe are suitable for the self employed, sole traders and small businesses. The tools have been released in advance of the launch of HMRC’s programme of Business Record Checks scheduled for later this year, which will impose penalties for significant record keeping failures.

Brian Redford, HMRC’s Acting Director, Business Customer Unit, said:

‘In these tough times, keeping good records makes sound business sense.’

‘It may seem like a challenge, particularly when you’re starting out, but keeping good records will bring real advantages to your business. Get a proper system in place and you’ll not only be confident that you are paying the right tax, but you’ll keep up-to-date with how much you owe suppliers and how much you are owed.’

‘Later this year, HMRC will start a programme of Business Records Checks that will look at the adequacy and accuracy of business records in SMEs to bring about a major improvement in the standard of record-keeping. Now is the time to invest a bit of effort to make sure your business records are perfect.’

The toolkits and checklists can be found on the Business Link website. However if you are unsure what records you should be keeping or would like a reminder please do get in touch.

Internet link: Press release

Plumbers Tax Safe Plan

HMRC have introduced the Plumbers Tax Safe Plan. This is the latest of HMRC’s disclosure opportunities and follows on from the doctors and dentists disclosure facility.

According to the HMRC website:

‘The Plumbers Tax Safe Plan (PTSP) is designed for people working within the plumbing industry who have not told HM Revenue & Customs (HMRC) about all their income in the past and who now want to get back on track. It is intended to cover people who work (or worked) in the plumbing, heating or gas installation trades and this includes anyone who installs and repairs pipes and fixtures for water, drainage or gas systems in a building.’

If you would like any more information on the PTSP please do get in touch.

Internet links: HMRC disclosures Guidance Pack

Fuel Prices

George Osborne presented his second Budget Statement and said:

‘Today’s Budget is about reforming the nation’s economy, so that we have enduring growth and jobs in the future.

And it’s about doing what we can to help families with the cost of living and the high oil price.

We understand how difficult it is for so many people across our country right now.

That we are able now to set off on the route from rescue to reform, and reform to recovery, is because of difficult decisions we’ve already taken.’

One of the measures announced was a cut in fuel duty by 1 pence per litre together with scrapping the escalator for the rest of this Parliament. Duty on fuel was due to rise by inflation plus 1 pence from 1 April 2011, which would have added around 5 pence in cost to each litre of fuel.

Internet link: BBC news

Help for small businesses

Another Budget announcement was that as part of a raft of measures to help small businesses the current business rates holiday will be extended until October 2012.

During his statement George Osborne said:

‘The last government planned that the current rate relief holiday for small businesses should end in October this year. I don’t think that would be right. So I can announce that, at a cost to the Exchequer of £370 million, I will extend the rate holiday for small businesses for another year – to October 2012.’

David Gauke, Exchequer Secretary to the Treasury, has also issued a letter to small businesses setting out the measures designed to support for enterprise and small business. To read more about the measures visit the link below.

Internet link: Business link letter

HMRC online services unavailable

HMRC are advising taxpayers that unfortunately their online services will be unavailable from Saturday 2 April until 06.00 Wednesday 6 April 2011. This is to allow for IT upgrades. All services will be affected including Corporation Tax, Self Assessment, PAYE and VAT.

Internet link: HRMC services unavailable

Standard rate of VAT- updated guidance

HMRC have updated their guidance on how to deal with the change in the standard rate of VAT which happened on 4 January 2011. The guidance covers such issues as deposits, credit notes and services which span the change in rate. If you would like any further information please get in touch.

Internet link: HMRC VAT guidance

Retirement and the removal of the Default Retirement Age

Acas have updated their guidance on the transitional arrangements which are in place to abolish the default retirement age (DRA).

According to the Acas website:

‘The new regulations now make it clear that the transitional arrangements apply to anyone who is 65 or over by 30 September 2011 regardless of when they reached the age of 65.

The new regulations also provide for the notice of retirement to be extended up to a maximum of 6 months if the employee requests this before 5 January 2012 and the retirement takes place on or before 5 October 2012’.

To read the updated employer guidance and the article visit the links below.

Internet links: Acas article Acas guidance