Newsletter – February 2014

In this month’s enews we advise on several issues relevant to employers. We also report on the help available for those affected by floods.

Please contact us if you would like any further information.

 

 

Employment Allowance

The Government has announced further details of the Employment Allowance which is available from 6 April 2014. Eligible employers can reduce their employer Class 1 NICs by up to £2,000 each tax year.

The Employment Allowance can be claimed by a business or charity (including Community Amateur Sports Clubs) that pays employer Class 1 NICs on their employees’ or directors’ earnings.

However there are some circumstances which may limit the availability of the allowance:

  • if a company belongs to a group of companies or a charity is part of a charities structure, only one company or charity can claim the allowance
  • the £2,000 Employment Allowance can only be claimed against one PAYE scheme, even if the business has more than one PAYE scheme.

Not all businesses can claim the Employment Allowance and the government guidance gives the following details of excluded employers.

You cannot claim the Employment Allowance, for example if you:

  • employ someone for personal, household or domestic work, such as a nanny, au pair, chauffeur, gardener or care support worker
  • already claim the allowance through a connected company or charity
  • are a public authority, this includes; local, district, town and parish councils
  • carry out functions either wholly or mainly of a public nature (unless you have charitable status), for example:
    • NHS services
    • General Practitioner services
    • the managing of housing stock owned by or for a local council
    • providing a meals on wheels service for a local council
    • refuse collection for a local council
    • prison services
    • collecting debt for a government department

If you would like any guidance on claiming the allowance please do get in touch. If we deal with your payroll we will ensure this matter is dealt with on your behalf.

Internet link: Gov.uk

Increases to NMW penalties and latest targets

The Government has announced that rogue employers who do not pay their workers the National Minimum Wage (NMW) will face an increased penalty of up to £20,000 as part of a Government crackdown.

Currently employers that break NMW law must pay the unpaid wages plus a financial penalty calculated as 50% of the total underpayment for all workers found to be underpaid. The maximum penalty an employer can face is £5,000.

The Government plans to increase the financial penalty percentage from 50% to 100% of the unpaid wages owed to workers. The maximum penalty will increase from £5,000 to £20,000. Regulations introducing these new limits are subject to Parliamentary approval and are expected to be enacted this month.

Latest target

Major record labels involved in this year’s Brit Awards are among the latest targets of HMRC’s continued crackdown on unpaid internships.

HMRC have written to record labels and event companies warning them about the consequences for non-payment of the NMW for any unpaid interns they take on. HMRC intend to follow up these letters with compliance visits later in the year to ensure the rules are being followed.

Michelle Wyer, HMRC’s Assistant Director NMW, said:

‘Non-payment of the National Minimum Wage is not an option, it’s the law, and we’re letting the music industry know that we’ve got them in our sights. If they are not playing by the rules, now is the time to put things in order.

Last year we fined over around 800 employers, so our message is clear: if you are not paying your interns, but should be, come forward now and put things right to avoid a penalty.’

Internet link: Press release

Help for those affected by floods

The Prime Minister has announced a package of measures to help flood affected businesses get back on their feet. The package of measures includes:

  • A Government Business Support Helpline providing comprehensive advice and support to businesses affected by floods. The helpline number is 0300 456 3565.
  • A new Business Support Scheme to provide hardship funding for SME businesses in areas affected by the floods. Both businesses that have been flooded, and businesses that are in affected areas and have suffered significant loss of trade, will be able to apply for support. Eligible businesses will be able to claim for funding for things like immediate clean-up costs, materials, and exceptional costs to help them continue trading.
  • Extra time for businesses to file accounts without any penalties.
  • All affected businesses will be able to apply to their local authority to get business rate relief for 3 months.
  • HMRC will also set up a new hotline for those who have been affected by flooding and may have difficulties in meeting their tax liabilities. HMRC will look to offer up to 3 months additional time to pay. This will cover all taxes owed to HMRC, including VAT, PAYE and corporation tax. The helpline number is 0800 904 79000800 904 7900.

Help is also available for communities affected. To read more about the help on offer visit the links below.

Internet links: HMRC website  News Communities  News business support

No penalties for some late Self Assessment returns

HMRC have announced that more than 10 million tax returns were filed on time meeting the 31 January deadline.

Approximately 8.5 million returns were filed online with the rest being paper filed. Perhaps not surprisingly the busiest day for tax return submission was 31 January when HMRC received over half a million returns.

For those failing to meet the deadline there is an automatic £100 late filing penalty regardless of whether the tax has been paid on time or indeed there is a refund due. Further penalties may also be imposed for continued failure to submit the return.

It has been widely reported that HMRC would not be charging penalties where returns were submitted before midnight on 15 February 2014. However this ‘reprieve’ only applies in limited circumstances as set out in the following HMRC statement:

‘We haven’t extended the Self Assessment deadline. Tax returns and any tax due must be received by HMRC by midnight tonight 31 January.

If someone has registered for our Online Service or existing customers have lost their User ID or password and realise they have left it too late we will allow a bit of extra time for this information to be received. This only applies to taxpayers who did the following between midnight on 21 January and midnight on 31 January 2014:

  • enrolled for the Self Assessment online service, or
  • requested a replacement user ID or password’

If you are one of the half a million people who have not yet submitted your self assessment return and you would like some help please do get in touch.

Internet links: Gov news  SA leniency

HMRC warning about phishing scams

HMRC are warning taxpayers to be wary of the latest in a long line of email phishing scams that claim to offer tax rebates in return for bank account details.

HMRC have received over 23,000 reports of phishing scam emails in the three months to the 31 January 2014 self assessment deadline which is a 47% increase on the same period in 2013.

HMRC have confirmed that it never contacts taxpayers via e-mail regarding a refund and advised anyone who receives an email claiming to be from HMRC:

HMRC have published advice and examples of typical fake emails at www.hmrc.gov.uk/security/index.htm.

Internet link: News

PAYE end of year approaching

HMRC are reminding employers that with the end of the 2013/14 tax year approaching they will soon need to make their final 2013/14 PAYE (RTI) submission.

For most employers, the final submission will be their final Full Payment Submission (FPS) which advises HMRC about the very last employee payments for 2013/14 and this needs to be made on or before 5 April 2014. Details of how to make the final submission can be found on the HMRC website using the link below.

If we deal with the payroll on your behalf we will ensure this matter is dealt with on a timely basis.

Internet link: HMRC news

Electronic messages to employers

HMRC have issued an electronic warning message to employers who have not submitted their Full Payment Submission (FPS) return(s) during the January tax month. The message is intended to be a reminder to employers and is not a penalty notice.

HMRC are advising employers who receive this message that they should check that they have sent all the submissions that are due for their PAYE scheme.

If employers have notified HMRC recently that their business has ceased, then they can ignore the electronic message and do not need to contact HMRC.

HMRC started issuing these messages in December 2013 and this following link sets out instances where an employer may receive a non-filing message, although they have filed on time and where not action is required.

Internet links: HMRC news

Employee travel disruption

From time to time and particularly with the current weather conditions, travel disruption can affect an employee’s ability to get to work on time, or in some cases at all. For situations ranging from public transport cancellations to severe weather, employers and employees should consider how this could impact on the workforce.

Acas provide some useful guidance on these issues.

Internet link: Acas

You’ll need Skype CreditFree via Skype

Newsletter – September 2013

In this month’s enews we report on a variety of issues including an update for employers on payroll and NMW increases. We also report on the implementation of Universal Credit and the latest crackdown by HMRC utilising card payment transactions.

Please do get in touch if you would like more detail on any of the articles.

Advisory fuel rates for company cars

New company car advisory fuel rates have been published which took effect from 1 September 2013. HMRC’s website states:

‘These rates apply to all journeys on or after 1 September 2013 until further notice. For one month from the date of change, employers may use either the previous or new current rates, as they choose. Employers may therefore make or require supplementary payments if they so wish, but are under no obligation to do either.’

The advisory fuel rates for journeys undertaken on or after 1 September 2013 are:

Engine size Petrol LPG
1400cc or less 15p 10p
1401cc – 2000cc 18p (17p) 11p (12p)
Over 2000cc 26p (25p) 16p (18p)

 

Engine size Diesel
1600cc or less 12p
1601cc – 2000cc 15p (14p)
Over 2000cc 18p

Please note that not all of the rates have been amended, so care must be taken to apply the correct rate. The amounts for the previous quarter are shown in brackets where the rate has been amended.

Other points to be aware of about the advisory fuel rates:

  • Employers do not need a dispensation to use these rates.
  • Employees driving employer provided cars are not entitled to use these rates to claim tax relief if employers reimburse them at lower rates. Such claims should be based on the actual costs incurred.
  • The advisory rates are not binding where an employer can demonstrate that the cost of business travel in employer provided cars is higher than the guideline mileage rates. The higher cost would need to be agreed with HMRC under a dispensation.

If you would like to discuss your car policy, please contact us.

Internet link: HMRC advisory fuel rates

Data payment crackdown

HMRC have announced that for the first time they now have access to information on all credit and debit card payments to UK businesses. HMRC intend to use this information to aid them in a new crackdown on tax evasion.

Under new powers introduced from 1 September, HMRC can now access information from ‘merchant acquirers’ which are the companies that process card payment transactions. HMRC will use the information to determine the amount and value of transactions completed by a specific trader.

HMRC do not have access to personal data identifying the card owners or card numbers but this data will be used to ensure that traders have correctly accounted for all taxes due.

HMRC estimate that this information could reduce fraud by over £50 million a year.

Exchequer Secretary to the Treasury David Gauke said:

‘Tax evasion and the hidden economy cost the taxpayer £9 billion a year. While the majority of traders are honest, they may find themselves undercut by the minority who seek to lower prices by cheating the tax system.’

‘The Government has given HMRC nearly £1 billion to tackle fraud and evasion, and these new powers give HMRC an extra tool to ensure a level playing field between businesses, and also reducing opportunities for those who try and cheat the system.’

Internet link: News

HMRC chase those who have missed RTI deadlines

HMRC are writing to the 167,000 employers who have missed one or more of the deadlines for reporting their PAYE information in real time.

The majority of employers should have started to report their PAYE information under RTI from the first payday on or after 6 April 2013. According to HMRC more than 1.6 million employer PAYE schemes, covering over 40 million individual records, are already reporting under RTI.

If you receive a letter and would like help with your payroll procedures, or do not believe you need to report any payments, please do get in touch.

Internet link: Press release

Universal Credit criticised by NAO

The implementation of the Government’s welfare reform programme, Universal Credit, has been criticised in a report by the National Audit Office (NAO).

Universal Credit will merge a number of existing benefits into a single payment in order to reduce the costs and fraud associated with the current multi-benefit system.

Amyas Morse, head of the National Audit Office said

‘The Department’s plans for Universal Credit were driven by an ambitious timescale, and this led to the adoption of a systems development approach new to the Department. The relatively high risk trajectory was not, however, matched by an appropriate management approach. Instead, the programme suffered from weak management, ineffective control and poor governance. Universal Credit could well go on to achieve considerable benefits if the Department learns from these early setbacks and puts realistic plans and strong discipline in place for its future roll-out.’

The DWP will now extend pilot schemes to six more areas of the UK, with these sites taking on simple welfare claims.

Internet links: Response NAO report

HSE guidance on new first aid training rules

The Health and Safety Executive has issued guidance to help employers assess their first aid training needs and comply with amendments to the Health and Safety (First Aid) Regulations.

Under the amended regulations the requirement for workplace first aid training providers to be approved by the HSE is removed from 1 October 2013.The amendments cover carrying out a first aid needs assessment and selecting a first aid training provider.

Internet link: HSE press release

RTI issue affecting student loan borrowers

HMRC would like employers to be aware that they have identified an issue with some employees who have student loans.

A few of the employees in this situation have had their employment status incorrectly ‘ceased’ on HMRC’s PAYE systems and this incorrect information has been passed to the Student Loans Company (SLC).

The SLC have written to these borrowers, querying their employment status. Employees affected by this issue are being asked to reply to the SLC saying they have not ceased or changed employer.

HMRC are hoping to correct their systems in the next few weeks. They have identified that there is an issue getting this corrected information on to the student loans system and are taking steps to resolve this issue.

Internet link: HMRC website

HMRC issue guidance on the Statutory Residence Test

HMRC have issued some updated guidance on the Statutory Residence Test which took effect from 6 April 2013.

Residence is a complex issue, if you would like any advice in this area please do get in touch.

Internet link: SRT guidance

National Minimum Wage

National Minimum Wage rates increases come into effect on 1 October 2013:

  • the adult rate will increase by 12p to £6.31 an hour
  • the rate for 18-20 year olds will increase by 5p to £5.03 an hour
  • the rate for 16-17 year olds will increase by 4p to £3.72 an hour
  • the apprentice rate will increase by 3p to £2.68 an hour and
  • the accommodation offset increases from the current £4.82 to £4.91 a day.

The accommodation offset rate is used where the employer provides you with accommodation, some of the value of which can count towards NMW pay.

It is important to note that these rates, which are in force from 1 October 2013, apply to pay reference periods beginning on or after that date.

Most workers in the UK over school leaving age are entitled to be paid at least the National Minimum Wage (NMW) for details of exceptions see the Acas website.

Internet links: Gov.uk ACAS

Deadline for ‘paper’ self assessment tax returns

For those individuals who have previously submitted ‘paper’ self assessment tax returns the deadline for the 2012/13 return is 31 October 2013. Returns submitted after that date must be submitted electronically or they will incur a minimum penalty of £100. The penalty applies even when there is no tax to pay or the tax is paid on time.

If you would like any help with the completion of your return please do get in touch.

Internet link: HRMC deadlines

Latest Job figures

According to the latest information published by the ONS, employment rose by 80,000 and unemployment fell by 24,000 in the three months to July.

The employment rate for those aged from 16 to 64 (for May to July 2013) was 71.6%, an increase of 0.2%. There were 29.84 million people in employment aged 16 and over.

The unemployment rate for May to July 2013 was 7.7% of the economically active population a reduction in 0.1%. There were 2.49 million unemployed people.

Between May to July 2012 and May to July 2013 total pay rose by 1.1% and regular pay rose by 1.0%.

Stephen Gifford, CBI Director of Economics, said:

‘These figures show the upturn in economic data we’ve seen through the spring and summer is starting to show up in job creation. Encouragingly, jobs growth in the private sector was more than three times greater than losses in the public sector.’

‘Despite better news on the direction of travel, youth unemployment is persistently high and growth alone will not address this problem.’

‘We’ve called on the Government to reduce employers’ National Insurance to help tackle this, and the launch of the Million Jobs campaign further emphasises the need for action to help young people enter a tough jobs market.’

Internet links: ONS report Press release

Newsletter – April 2013

In this month’s enews we report on changes to the tax rules for loans to participators and other issues pertinent to employers with many deadlines approaching.

Please contact us if you would like any further information.

Loans from a company to shareholders

Draft legislation has been published which confirms an announcement made in Budget 2013 and which has effect from 20 March 2013.

A close company (which generally includes an owner managed company) may be charged to tax in certain circumstances where it has made a loan or advance to individuals who have an interest or shares in the company (known as participators). Loans and advances are also caught where they are made to an associate of the individual such as a family member.

The corporation tax charge is 25% where the loan is outstanding nine months after the end of the accounting period.

The new law will prevent the practise of avoiding the payment of the tax charge by repaying the loan before the tax is due (nine months after the end of the accounting period) and then effectively withdrawing the same money shortly after. This change may also prevent refunds of the 25% tax already paid where loans are redrawn shortly after.

This change may affect a number of owner managed companies and we will be happy to discuss this with you.

Internet links: Press release HMRC TIIN

Increase in NMW rates

The Government has announced increases in the NMW rates which will come into effect on 1 October 2013:

  • the adult rate will increase by 12p to £6.31 an hour
  • the rate for 18-20 year olds will increase by 5p to £5.03 an hour
  • the rate for 16-17 year olds will increase by 4p to £3.72 an hour
  • the apprentice rate will increase by 3p to £2.68 an hour and
  • the accommodation offset increases from the current £4.82 to £4.91.

Katja Hall, CBI Chief Policy Director, said:

‘Pay restraint has been crucial in creating jobs in this tough economic climate.’

‘The LPC has struck a careful balance in setting the rates given sluggish growth, particularly in recommending a cautious approach to youth pay.’

‘The LPC will need to monitor the impact of raising the adult rate very carefully. Given average earnings this year are already lower than expected, we must make sure the minimum wage doesn’t limit jobs in key sectors, by outstripping pay across the rest of the workforce.’

‘The law is clear that employers must pay apprentices the legal minimum wage. It is right that ministers tighten up compliance and enforcement.’

Internet links: Press release CBI press release

HMRC launch Managing Serious Defaulters (MSD)

Following on from Managing Deliberate Defaulters (MDD) programme, under MSD HMRC will closely monitor the tax affairs of more individuals and businesses who have deliberately evaded tax for up to five years.

From 1 April 2013, HMRC is also extending the close monitoring of the tax affairs of those who deliberately choose not to pay what they owe. MSD replaces and expands the MDD scheme.

David Gauke, Exchequer Secretary to the Treasury, said:

‘Increasingly, evaders are using contrived insolvency to evade tax, either through liquidation of a business or bankruptcy of an individual. It is only fair that someone who has deliberately tried to evade tax should face extra scrutiny from HMRC.’

‘This measure, along with those announced in the Budget, demonstrates that we will crack down on people who don’t pay what they owe.’

Internet link: Government news

Employer end of year forms

HMRC are reminding employers that in order to avoid penalties they must file the Employer Annual Return (P35 and P14s) online and on time. The vast majority of employers must file electronically and the deadline for submission of the forms is 19 May 2013, which this year falls on a Sunday.

Where employers do not file their annual return by 19 May they incur a penalty of £100 per 50 (or fewer) employees for every month (or part month) that their return is late.

With the introduction of RTI for the majority of employers from 6 April 2013 this will be the final P35 submission for many.

If you are unsure whether you need to complete a return this year please do get in touch.

Internet links: HMRC end of year guidance Employer Bulletin

Employment Particulars

The government has updated the template of written employment particulars.

The template is an example of a written statement of employment particulars which meets the requirements of employment law.

Where an employee is employed for more than a month the employer must give them a written statement of employment particulars.

Internet link: Government Publications

P11d deadline approaching

The forms P11D, and where appropriate P9D, which report employees and directors benefits and expenses for the year ended 5 April 2013, are due for submission to HMRC by 6 July 2013. The process of gathering the necessary information can take some time, so it is important that this process is not left to the last minute.

Employees pay tax on benefits provided as shown on the P11D, either via a PAYE coding notice adjustment or through the self assessment system. In addition, the employer has to pay Class 1A National Insurance Contributions at 13.8% on the provision of most benefits. The calculation of this liability is detailed on the P11D(b) form.

HMRC have issued some guidance as to common errors on the forms in the latest Employer Bulletin. These include the following which can delay processing and cause problems with employees’ tax codes:

  • Not ticking the ‘director’ box if the employee is a director.
  • Not including a description or abbreviation, where amounts are included in sections A, B, L, M or N of the form.
  • Leaving the ‘cash equivalent’ box empty where you’ve entered a figure in the corresponding ‘cost to you’ box of a section.
  • Not correctly completing the box in Part 5 of form P35 (Employers Annual Return) or the declaration on the final FPS/EPS submission (for those employers operating PAYE in ‘real time’) to indicate whether or not P11Ds are due.
  • Where a benefit has been provided for mixed business and private use, entering only the value of the private-use portion – you must report the full gross value of the benefit.
  • Not completing the fuel benefit box/field where this applies. This means an amended P11D has to be sent in.
  • Incorrectly completing the ‘from’ and ‘to’ dates in the ‘Dates car was available’ boxes. For example entering 06/04/2012 to 05/04/2013 to indicate the car was available throughout that year. If the car was available in the previous tax year, the ‘from’ box should not be completed and if the car is to be available in the next tax year, the ‘to’ box should not be completed.

Correct P11D completion is complex. If you would like any help with the forms P11D or the calculation of the associated Class 1A National Insurance liability please get in touch.

Internet links: http://www.hmrc.gov.uk/paye/exb/index.htm Employer Bulletin

Scottish rate of income tax

On 14 February 2013 Scottish and UK ministers agreed the final text of the Memorandum of Understanding between HMRC and the Scottish Government covering the Scottish rate of income tax.

The Scottish rate will commence from a date to be set by the UK Government, expected to be April 2016.

Internet links: HMRC What’s New FAQs

Newsletter – September 2011

In this month’s enews we report on increases to the NMW rates. Please contact us if you would like any further details on any of the issues covered.

 

 

National Minimum Wage rates

The adult rate of the National Minimum Wage (NMW) increases to £6.08 (£5.93) an hour from 1 October 2011. This is payable to those age 21 and over.

The rate for those aged 18 to 20 increases to £4.98 (£4.92) and for 16 and 17 year olds to £3.68 (£3.64) an hour.

The apprentice rate, for apprentices under 19 or 19 or over and in the first year of their apprenticeship, increases to £2.60 (£2.50) and hour.

Updated guidance available on the Business Link website includes specific situations such as those engaged on work experience or internships and their entitlement to the NMW. The guidance also includes a new worker checklist for employers and case study examples.

The press release confirms:

‘Entitlement to the NMW does not depend on a job title but on whether the arrangement they have with an organisation makes them a worker for NMW purposes. Where an individual is a worker – and no exemption applies – then they must be paid at least the NMW.’

Employment Relations Minister Edward Davey said:

‘Internships and work experience of all forms offer an excellent opportunity in helping to bridge the gap between education and the workplace. And for businesses it allows them access to a wide talent pool of some of our best and brightest who didn’t take the traditional route into a job.

Fairness though is absolutely paramount with all placements. When a worker is entitled to the minimum wage, they should be paid it and we will continue to enforce the law. Today’s publication will help clarify this for employers and will also make sure that all interns and those on work experience placements have a better understanding of their entitlement to the minimum wage.’

HMRC are able to charge penalties to those employers found to be in breach of the NMW rules.

If you have any queries on the NMW please do get in touch.

Internet links: NMW rates Business link guidance Press release NMW Penalties

Advisory fuel rates for company cars

New company car advisory fuel rates have been published to take effect from 1 September 2011. HMRC’s website states:

‘These rates apply to all journeys on or after 1 September 2011 until further notice. For one month from the date of change, employers may use either the previous or new current rates, as they choose. Employers may therefore make or require supplementary payments if they so wish, but are under no obligation to do either.’

The advisory fuel rates for journeys undertaken on or after 1 September 2011 are:

Engine size Petrol LPG
1400cc or less 15p (15p) 11p (11p)
1401cc – 2000cc 18p (18p) 12p (13p)
Over 2000cc 26p (26p) 18p (18p)
Engine size Diesel
1600 cc or less 12p (12p)
1601cc – 2000cc 15p (15p)
Over 2000cc 18p (18p)

Please note that only one rate has changed and that has been reduced and care must be taken to apply the correct rate after the one month period of grace.

Other points to be aware of about the advisory fuel rates:

  • Employers do not need a dispensation to use these rates.
  • Employees driving employer provided cars are not entitled to use these rates to claim tax relief if employers reimburse them at lower rates. Such claims should be based on the actual costs incurred.
  • The advisory rates are not binding where an employer can demonstrate that the cost of business travel in employer provided cars is higher than the guideline mileage rates. The higher cost would need to be agreed with HMRC under a dispensation.

If you would like to discuss your car policy, please contact us.

Internet link: HMRC advisory fuel rates

Agreement with Switzerland to secure billions in unpaid tax

The government has agreed measures with Switzerland to tackle offshore tax evasion. Under the terms of an agreement, existing funds held by UK taxpayers in Switzerland will be subject to a significant one-off deduction of between 19% and 34% to settle past tax liabilities.

From 2013, a new withholding tax of 48% on investment income and 27% on gains will ensure the effective future taxation of UK residents with funds in Swiss bank accounts. This will be accompanied by new information-sharing rules which will make it easier for HMRC to find out about Swiss accounts held by UK taxpayers. The new charges will not apply if the taxpayer authorises a full disclosure of their affairs to HMRC.

Internet link: Press release

Unemployment figures

The latest unemployment figures show the number of people out of work rose by 80,000 to 2.51 million in the three months to July 2011.

Neil Carberry, CBI Director for Employment Policy, said:

‘This rise in unemployment is troubling, particularly the growing number of young people out of work.

With one in five 16-24 year olds currently unemployed, tackling youth unemployment must be a priority. Businesses are eager to play their part through apprenticeships, training and work placements, but now the government must do all it can to create the right conditions for the private sector to create much-needed jobs.’

Internet link: Press release

HMRC reminder on new tax return penalties

HMRC are reminding individuals and businesses about new Self Assessment penalties for late returns and late payments, which come into effect this autumn.

The changes will apply to Self Assessment returns for 2010/11 which must be submitted by 31 January 2012. As stated on the HMRC website:

‘The new penalties for late Self Assessment returns are:

  • an initial £100 fixed penalty, which will now apply even if there is no tax to pay, or if the tax due is paid on time
  • after 3 months, additional daily penalties of £10 per day, up to a maximum of £900
  • after 6 months, a further penalty of 5% of the tax due or £300, whichever is greater; and
  • after 12 months, another 5% or £300 charge, whichever is greater. In serious cases, the penalty after 12 months can be up to 100% of the tax due.’

If you would like help or advice on your Self Assessment return please do contact us.

Internet links: Press release HMRC deadlines and penalties

School Charities – Gift Aid and Payroll Giving guide

HMRC have published a Gift Aid and Payroll Giving guide for School Charities.

The guide contains information and simple examples specifically related to funds received by school charities to help make the most of these donations and identify what qualifies for Gift Aid. The guidance covers the following scenarios:

‘Appeals to fund extra lessons

Non-uniform days

School fees

Appeals towards school running costs

Appeals to fund scholarships

Appeals to a general reserve fund

Educational school trips

Appeals to buy a minibus or other equipment

Sponsored events

Payments to e-Learning Foundations

Building appeals

Other fundraising events’

Internet links: HMRC website Guidance

Revised construction industry penalties

From October 2011 the late submission Construction Industry Scheme monthly returns will result in revised penalties. The penalties are as follows:

  • a basic penalty of £100 for failure to meet due date of the 19th of the month
  • where the failure continues after two months after the due date, a further penalty of £200 will be charged
  • after six months an additional penalty will be due, rising to the greater of 5% of the tax or £300
  • after 12 months a further penalty will again be due being the greater of £300 or 5% of the tax but, where the withholding of information is deliberate and concealed, it will be 100% of the tax (or £3,000 if greater) and where information is withheld deliberately 70% of the tax (or £1,500 if greater).

Please get in touch if you would like help or advice on the Construction Industry Scheme.

Internet link: HMRC guidance on CIS penalties

HMRC report increase in phishing scams

HMRC have confirmed that reports of fraudulent ‘phishing’ emails have risen by 300% over the past year. The figure for August 2011 was 24,000. HMRC are currently helping to shut down around 100 scam websites a month.

They are stressing that if anyone receives an email claiming to be from HMRC advising that they are due a tax repayment that they do not follow the email’s instructions.

The emails provide a ‘click-through link’ to a cloned replica of the HMRC website, where the recipient is asked to provide their credit or debit card details. HMRC advise that victims risk not only having their bank accounts emptied but also their personal details being sold on to other organised criminal gangs.

Joan Wood, Director of HMRC Online and Digital, said:

‘We only ever contact customers who are due a tax refund in writing by post. We currently don’t use telephone calls, emails or external companies in these circumstances. If anyone receives an email claiming to be from HMRC, please send it to phishing@hmrc.gsi.gov.uk before deleting it permanently.

The increase in reports is partly due to improved awareness of this scam. However, I have no doubt that more of these “phishing” emails are in general circulation than ever before.

HMRC will do everything possible to ensure those receiving this email know what steps to take to protect their information, and we are working closely with other law enforcement agencies to target the criminals behind this serious crime and see them brought to justice.’

Internet link: