- PARENTS WITH HIGHER INCOMES MUST REGISTER FOR SELF ASSESSMENT
- PAYE RTI AND ANNUAL SCHEMES
- PENSION ‘LIBERATION’
- CONSULTATION ON TAX-FREE CHILDCARE FOR WORKING FAMILIES
- HMRC’S MOST WANTED TAX FUGITIVES
- A MILLION ZERO HOUR CONTRACTS
- HMRC INTRODUCE NEW SAFEGUARDS FOR DEBT COLLECTION VISITS
- WHAT HAPPENS WHEN MY COMPANY REACHES THE END OF ITS USEFUL LIFE?
HMRC are reminding parents with higher incomes who continued to receive Child Benefit after January 2013 that they must register for Self Assessment by 5 October 2013 to avoid any penalties in relation to the High Income Child Benefit Charge.
HMRC have announced that they will be writing to approximately 2 million higher rate taxpayers over the next few weeks, including those affected by recent changes to Child Benefit. The letter reminds them that if their income is over £50,000 and they or their partner received Child Benefit in 2012/13, they will need to complete a Self Assessment tax return for the 2012/13 tax year. They must register with HMRC for Self Assessment if they have not already done so.
According to HMRC, over 390,000 people with higher incomes have already opted out of receiving Child Benefit.
HMRC’s Chief Executive, Lin Homer, said:
‘HMRC is committed to helping people pay the right amount of tax. If you have had certain changes to your income in the last year, including those affected by the changes to Child Benefit, you have until 5 October to register for Self Assessment.’
If the charge does apply, then the taxpayer must register for Self Assessment for the 2012/13 tax year by 5 October 2013, so that they can declare the Child Benefit received, and pay the tax charge on time and avoid any penalties.
If you would like any help or advice on whether or not you need to register, or whether you should opt to stop receiving Child Benefit, please do get in touch.
Internet link: Press release
HMRC are advising that they have now fixed the issue with Annual PAYE schemes.
HMRC received a number of requests since April from employers, asking that the status of their PAYE scheme be changed to annual. Due to technical issues they were unable to process the requests at the time. HMRC have now resolved the issue and have accepted all the requests that have been made and changed those schemes to annual. They will not however, be notifying employers that the change has been made.
If you are interested in changing your scheme to annual please do get in touch. However please be aware that under an annual scheme the payroll must meet all of the following requirements:
• all the employees are paid annually (generally only applicable to directors only PAYE schemes)
• everyone is paid within the same, single tax month and
• the employer is only required to pay HMRC annually.
Internet link: HMRC news
The ICAEW have issued a warning that individuals are being approached by firms offering to help them ‘unlock’ their pensions or access them early. Some unscrupulous firms are using misleading information and in some cases offering personal loans or cash incentives to entice savers to cash in their pensions early. This is known as pension ‘liberation’. For further information use the link to the Pensions Regulator website below.
The ICAEW are warning that those taxpayers who decide to take the initiative themselves and access their pensions early will find that some or all of their hard earned pension savings may be at stake. This is because the normal rule is that you cannot generally access pension savings before you reach the age of 55 at the earliest.
Those opting for pension ‘liberation’ will generally be liable to pay a tax bill of more than half of their pension savings and may have to pay further tax penalties as well. Additionally, the provider usually imposes significant charges, sometimes up to 20%. The ICAEW website provides details of the potential tax liabilities and charges and also a link to report firms promoting pension ‘liberation’.
Please do get in touch if you would like further guidance in this area.
Earlier this year the government announced that it plans to introduce a new childcare scheme for working families. The proposal is that Tax-Free Childcare will provide 20% of working families’ childcare costs, up to £1,200 for each child. The scheme is expected to be introduced from 2015.
The consultation invites interested parties to comment on the detailed design and operation of Tax-Free Childcare.
Internet link: Consultation
HMRC has published an updated list of their most wanted ‘tax fugitives’ and announced that a ‘fraudster’ has been apprehended at Heathrow Airport whilst travelling on a false passport, following almost ten years on the run.
HMRC have published a gallery of its 2013 most wanted and announced the capture of one of the most wanted tax criminal fugitives. To view the gallery see the link to the flickr page below.
The 2013 list includes updated information on the original 20 together with the addition of 10 more tax fugitives. These fugitives are being pursued for a range of crimes including VAT fraud, tax evasion and money laundering. According to HMRC their crimes have cost the taxpayer between £100,000 and £10 million.
Anthony Judge, who was wanted for his role in over £350,000 of tax fraud, was stopped at Heathrow Airport last month as he attempted to enter the UK on a forged passport.
Chancellor of the Exchequer George Osborne said:
‘Our message is clear; tax fraud and evasion is illegal and will not be tolerated. Millions of hard-working people pay their taxes and it is they who are being defrauded. The government has stepped up HMRC’s enforcement activities to enable them to pursue tax cheats relentlessly around the world.’
New research suggests that the number of workers on zero hour contracts, with no guarantee of hours or pay, are becoming more widespread.
Research by the Chartered Institute of Personnel and Development (CIPD) shows that there are up to a million workers on zero hour contracts. The survey also showed that only 14% of workers on these contracts were let down by their employers by them failing to provide sufficient hours each week.
However figures from the Office for National Statistics (ONS) show that only 250,000 people on zero hour contracts.
Zero hour contracts have become more widespread over recent years, particularly in the hospitality and retail sectors, where businesses view them as a cost effective way of satisfying short term staffing needs by using ‘on call’ staff.
Peter Cheese the CIPD’s CEO said:
‘Zero hours contracts, used appropriately, can provide flexibility for employers and employees and can play a positive role in creating more flexible working opportunities. This can for example allow parents of young children, carers, students and others to fit work around their home lives.’
‘However, for some this may be a significant disadvantage where they need more certainty in their working hours and earnings, and we need to ensure that proper support for employees and their rights are not being compromised through such arrangements. Zero hours contracts cannot be used simply to avoid an employer’s responsibilities to its employees.’
Internet link: Press release
HMRC have introduced a Field Force Verification Helpline, so that taxpayers can easily check whether or not a caller on their doorstep claiming to be from HMRC is genuine.
Every year, HMRC visit a small number of taxpayers who have not paid their tax or arranged to repay overpayments of tax credits, in order to collect the debt. The Debt Management and Banking’s Field Force Collectors may visit a taxpayer’s home or business premises. HMRC always give advance warning that a visit may take place if a debt is not paid.
‘To provide a safeguard against bogus callers in these situations, HMRC has introduced a new Field Force Verification Helpline
To access the helpline, customers should follow these simple steps:
• Ask to see the Collector’s photo ID
• Make a note of the ID number on the photo ID
• Call 0300 200 3862
• Provide HMRC with the ID number you’ve noted
Our operators will then be able to confirm to you whether or not your caller is genuinely an HMRC Collector.
To help to explain the purpose of the visit and the rights and responsibilities of customers, we have also produced a new leaflet. Every customer visited, from 13 August onwards, will be given a copy of this by the Collector on arrival at the customer’s premises. This also includes the Field Force Verification Helpline number.’
If you have any concerns about paying your liabilities please do get in touch.
Internet link: HMRC news
We asked John Rimmer at BRI Business Recovery & Insolvency, who are regulated to deal with that area of business closures, for his thoughts.
A company can reach the end of its useful life, for many reasons
• retirement without means of succession, or
• the company has achieved its purpose or
• you are now doing different things and going back into employment
One of the key issues remains “how do I close the company and how can I get the most money back in a tax efficient manner?”
Hopefully the first call would be to Walker Thompson for advice
You should select, whilst the choice remains in your hands, the most appropriate exit route for your company whereby you maximise possible returns to shareholders. We are here to guide you through this process to help avoid the wrong choice and to minimise any tax liability.
If your company has, or is due to cease trading, then we must consider the most tax efficient route for this. Put simply :-
1. If reserves are greater than £25,000, you might minimise your tax bill by way of a return to shareholders using a capital distribution (thereby
avoiding income tax) and sometimes qualifying for entrepreneur’s relief paying CGT at only 10%. This route involves a solvent liquidation.
2. If reserves are below £25,000 you might distribute these, with H M Revenue & Customs’ consent, and have the company dissolved. This
avoids the need for a formal wind-up.
3. If the company has no funds remaining, you can apply to have the company struck off the register and dissolved.
There is a good deal of common sense in having a trusted partner in place who can essentially hand hold Directors & Shareholders through a closure process
For further information in relation to this article please contact us where we would be happy to explain the above processes further. Otherwise
John Rimmer at BRI Business Recovery and Insolvency can be contacted at (firstname.lastname@example.org or 02476 226839)