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Monday 6th August 2018

Summer 2018 Newsletter

Making Tax Digital is on the horizon and this edition gives an overview of the changes.

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Tuesday 6th March 2018

Spring 2018 Newsletter

This edition includes articles on paying dividends, the new Scottish income tax bands and inheritance tax.

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Wednesday 30th August 2017

Autumn 2017 Newsletter

In this edition there are articles on the delayed Making Tax Digital plans and the new data protection rules.

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Wednesday 14th June 2017

Summer 2017 Newsletter

The Summer edition of the newsletter highlights the changes to the dividend allowance and the current position with Making Tax Digital

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Thursday 16th March 2017

Spring 2017 Newsletter

The Spring edition of the newsletter leads on changes to the VAT flat rate scheme

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Wednesday 6th February 2019

HMRC has extended its Making Tax Digital for VAT pilot scheme to all eligible businesses.

HMRC has extended its Making Tax Digital for VAT (MTDfV) pilot scheme to all eligible businesses.

For most businesses, compliance with the regulations is mandated for VAT return periods beginning on or after 1 April 2019. However, MTDfV for some 'more complex' businesses has been deferred until 1 October 2019. This deferral applies to: trusts; not for profit organisations not set up as companies; VAT divisions; VAT groups; public sector entities such as government departments and NHS Trusts, which have to provide additional information on their VAT return; local authorities; public corporations; traders based overseas; those required to make payments on account; annual accounting scheme users.

Commenting on the pilot scheme, Clare Sheehan, Deputy Director for MTD for Business, said:

'The MTD pilot is now available to all businesses who will need to use the service from April. This marks a significant milestone towards our delivery of a modern tax administration.'

'We encourage all eligible businesses to join and try out the service before they are mandated to use it.'

HMRC has also confirmed that Brexit will not affect the introduction of MTDfV. In a recent letter, Jim Harra, Deputy Chief Executive of HMRC, wrote:

'Our system is already live and by the end of February we'll have written to every affected business, encouraging them to join the thousands of others who have registered.'

Please contact us for help with MTDfV.

Internet link: GOV.UK publications

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Wednesday 6th February 2019

Since 2017, HMRC has captured millions of callers' voice data on its Voice ID system.

Since 2017, HMRC has captured millions of callers' voice data on its Voice ID system by encouraging the caller to say a key phrase instead of the conventional password to gain access to their accounts.

However, non-profit organisation Big Brother Watch warns that people have been 'railroaded into a mass ID scheme by the back door' and has reported HMRC to the Information Commissioner's Office (ICO) on the grounds that it has 'broken data protection laws'.

A Freedom of Information request revealed almost seven million taxpayers are enrolled in HMRC's Voice ID database of which 162,185 individuals have opted out and had their biometric data deleted by HMRC.

A spokesperson for HMRC said:

'Our Voice ID system is very popular with millions of customers as it gives a quick route to access accounts by phone.

All our data is stored securely, and customers can opt out of Voice ID or delete their records any time they want.'

Internet links: Big Brother Watch HMRC FOI Response

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Wednesday 6th February 2019

The Chancellor of the Exchequer, Philip Hammond, has announced that the government will respond to the forecast from the Office for Budget Responsibility in the Spring Statement on Wednesday 13 March 2019.

The Chancellor of the Exchequer, Philip Hammond, has announced that the government will respond to the forecast from the Office for Budget Responsibility (OBR) in the Spring Statement on Wednesday 13 March 2019.

The Chancellor may take the opportunity to announce tax changes and consultations.

We will update you on pertinent announcements.

Internet link: GOV.UK news

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Wednesday 6th February 2019

HMRC has revealed some of the most 'bizarre excuses' taxpayers have given for failing to file their self assessment tax return on time.

HMRC has revealed some of the most 'bizarre excuses' taxpayers have given for failing to file their self assessment tax return on time.

Excuses included 'I'm too short to reach the post box', and 'my boiler had broken and my fingers were too cold to type'. One taxpayer claimed that a junior member of staff 'forgot to wear their glasses', and accidentally registered a client for self assessment. Another told HMRC that their mother-in-law was a witch, and that she had put a curse on the taxpayer, which prevented them from filing their tax return on time.

In addition to these excuses, HMRC also stated that, every year, they receive some unconvincing expenses claims.

One individual attempted to claim £40 for 'extra woolly underwear', whilst another taxpayer tried to claim £756 for pet insurance. Meanwhile, a carpenter attempted to claim £900 for a 55-inch TV and sound bar, which he claimed would 'help him price his jobs'.

HMRC Director General of Customer Services, Angela MacDonald, said:

'Help will always be provided for those who have a genuine excuse for not submitting their return on time, but it's unfair to the majority of honest taxpayers when others make bogus claims.'

HMRC stated all these excuses and claims were unsuccessful.

The deadline for sending 2017/18 Self Assessment tax returns to HMRC, and paying any outstanding liabilities, was 31 January 2019. If you have not yet filed your return please contact us for assistance.

Internet link: GOV.UK news

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Wednesday 6th February 2019

The Insolvency Service has urged individuals saving for retirement to protect their pension pots from criminals and 'negligent trustees'.

The Insolvency Service has urged individuals saving for retirement to protect their pension pots from criminals and 'negligent trustees'.

Research carried out by the Service found that criminals use a range of tactics to convince savers to part with their funds, including persuading individuals to access their pension and invest in unregulated schemes.

Pension scam victims lost an average of £91,000 to criminals in 2018, according to Financial Conduct Authority (FCA) research. Criminals often use cold-calls and offers of free pension reviews to convince their victims to comply.

The Insolvency Service has urged savers to be wary of calls that come out of the blue; seek financial advice before altering their pension arrangements or making investments; and not be pressured into making decisions about their pension.

Consumer Minister Kelly Tolhurst said:

'If you are approached to make an investment from your pension, always do your homework and seek independent advice, if necessary, to help you make an informed decision.

'The government continues to work closely with the Insolvency Service who are working to clamp down on rogue companies targeting vulnerable people.'

Internet link: GOV.UK news

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Monday 7th January 2019

Finance Secretary Derek Mackay delivered the 2019/20 Scottish Draft Budget on Wednesday 12 December 2018 setting out the Scottish government's financial and tax plans.

Finance Secretary Derek Mackay delivered the 2019/20 Scottish Draft Budget on Wednesday 12 December 2018 setting out the Scottish government's financial and tax plans. The announcement had been timed to take place after Chancellor of the Exchequer Philip Hammond delivered the UK Budget on 29 October 2018. The Finance Secretary announced changes to Scottish income tax. Contact us for advice on how the Scottish Budget impacts you.

Scottish Income tax

The government has devolved powers to set the rates and bands of income tax (other than those for savings and dividend income) which apply to Scottish resident taxpayers. The Scottish Budget announced the following income tax rates and bands for 2019/20. These will be considered by the Scottish Parliament, and an agreed Scottish Rate Resolution will set the final Scottish Income tax rates and bands for 2019/20.

The current rates and bands for 2018/19 and the proposed rates and bands for 2019/20 on non-savings and non-dividend income are as follows:

2018/19 2019/20 Band Name Rate
Over £11,850* - £13,850 Over £12,500* - £14,549 Starter 19%
Over £13,850 - £24,000 Over £14,549 - £24,944 Scottish Basic 20%
Over £24,000 - £43,430 Over £24,944 - £43,430 Intermediate 21%
Over £43,430 - £150,000** Over £43,430 - £150,000** Higher 41%

Over £150,000**

Over £150,000** Top 46%

* assuming the individual is entitled to a full UK personal allowance

** the personal allowance will be reduced if an individual's adjusted net income is above £100,000. The allowance is reduced by £1 for every £2 of income over £100,000.

The personal allowance is currently £11,850 for 2018/19. The personal allowance for 2019/20 will be £12,500.

The UK higher rate tax point for 2019/20 is set at £50,000 (for those entitled to the full UK personal allowance) and the tax rates for non-savings and non-dividend income have been maintained at 20%, 40% and 45% respectively. The additional rate of 45% is payable on income over £150,000.

For 2019/20 Scottish taxpayers with employment income of approximately £27,000 will pay the same amount of income tax as those with similar income in the rest of the UK. For higher earners, with pay of £150,000, a Scottish taxpayer will pay approximately an extra £2,670 of income tax than those on similar income in the rest of the UK.

Internet link: GOV.SCOT budget

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Monday 7th January 2019

In the 2019/20 Scottish Draft Budget, Derek Mackay announced changes to Scottish Land and Buildings Transaction Tax.

In the 2019/20 Scottish Draft Budget, Derek Mackay announced changes to Scottish Land and Buildings Transaction Tax (LBTT) which are considered below.

The government's stated policy priority for residential Land and Buildings Transaction Tax (LBTT) remains to help first-time buyers and to assist people as they progress through the property market. Since its introduction, this policy has ensured that over 80% of taxpayers benefit from LBTT by paying either no tax or less tax than in England. The current rates and bands are as follows:

Residential property Rate
0 - £145,000 0%
£145,001 - £250,000 2%
£250,001 - £325,000 5%
£325,001 - £750,000 10%
£750,001 and over 12%

The rates apply to the portion of the total value which falls within each band.

First-time buyer relief

A relief applies for first-time buyers of properties up to £175,000. The relief raises the zero tax threshold for first-time buyers from £145,000 to £175,000. First-time buyers purchasing a property above £175,000 also benefit from the relief on the portion of the price below the threshold.

Higher rates for additional residential properties

Higher rates of LBTT are charged on purchases of certain residential properties, such as buy to let properties and second homes. Although these are the main targets of the higher rates, some other purchasers may have to pay the higher rates.

The Additional Dwelling Supplement (ADS) potentially applies if, at the end of the day of the purchase transaction, the individual owns two or more residential properties and is not replacing their main residence. Care is needed if an individual already owns, or partly owns, a property and transacts to purchase another property without having disposed of the first property. An 18 month rule helps to remove some transactions from the additional rates (or allows a refund).

The Government announced an increase in the ADS from 3% to 4% from 25 January 2019, but this increase will not apply if the contract for a transaction was entered into prior to 12 December 2018. Existing arrangements allowing for the supplement to be reclaimed will continue.

Changes for non-residential rates and bands

The Government will reduce the lower rate of non-residential LBTT from 3% to 1%, increase the upper rate from 4.5% to 5% and reduce the starting threshold of the upper rate from £350,000 to £250,000. These changes come into force from 25 January 2019, but will not apply if the contract for a transaction was entered into prior to 12 December 2018.

The revised rates and band for non-residential LBTT transactions are as follows:

Non-residential transactions

Purchase price Rate
Up to £150,000 0%
£150,001 - £250,000 1%
Over £250,000 5%

Non-residential leases

Net present value of rent payable Rate
Up to £150,000 0%
Over £150,000 1%

Contact us for advice on how the Scottish Budget impacts you.

Internet link: GOV.SCOT budget

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Monday 7th January 2019

HMRC is reminding employees that they may be able to claim a tax rebate on their work related expenses.

HMRC is reminding employees that they may be able to claim a tax rebate on their work related expenses. HMRC estimate that millions of employees, particularly those working in the service industry, could be entitled to a tax refund. Workers, including nurses, hairdressers, construction workers and those working in retail and food sectors, may be able to claim tax rebates.

Individuals in these types of roles sometimes have to pay for work-related expenses including car mileage, replacing or repairing small tools, or maintaining branded uniforms.

Where these types of expenses are incurred, employees may be entitled to claim a tax refund. HMRC is advising individuals to go directly to GOV.UK to check if they can claim extra cash back. HMRC advise taxpayers to log in to their Personal Tax Account to claim their tax relief online and that approved claims should be refunded within three weeks.

Financial Secretary to the Treasury, Mel Stride MP, said:

'We know what a difference tax relief can make to hard-working customers, especially at this time of year. HMRC is keen to make sure customers get all the relief they're entitled to, by using the online service.

Tax relief isn't available for all employment expenses, so the online Check If You Can Claim tool is very helpful – then if your claim is approved, your full tax relief will be paid directly into your bank account.

The majority of claims are for repairing or replacing tools and branded uniforms, professional subscriptions and mileage. Healthcare workers, people working in food and retail, and those in the construction industry are among the top professions to claim from HMRC.

HMRC is advising that taxpayers may be able to claim tax relief on the cost of:

  • repairing or replacing small tools needed to do their job (for example, scissors or an electric drill)
  • cleaning, repairing or replacing specialist clothing (for example, a branded uniform or safety boots)
  • business mileage (not commuting)
  • travel and overnight expenses
  • professional fees and subscriptions.

Contact us if you would like help claiming tax relief on your expenses.

Internet link: GOV.UK news

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Monday 7th January 2019

The Pensions Regulator is reminding employers about the workplace pension contribution increases from 6 April 2019.

The Pensions Regulator (TPR) is reminding employers that from 6 April 2019, the amount that will need to be paid into a workplace pension will increase to an overall minimum of 8%, with employers contributing at least 3% of this total amount.

TPR is now starting to write to all employers to remind them of their duties. TRP website provides further information on the increases and a link to a letter template advising employees of the increase.

TPR is advising employers that they should also check with their payroll software provider and pension provider to ensure plans are in place ahead of 6 April 2019.

Please contact us if you would like help with your payroll or pensions auto enrolment compliance.

Internet link: TPR increase

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Monday 7th January 2019

HMRC have updated the list of deliberate tax defaulters.

HMRC have updated the list of deliberate tax defaulters. The list contains details of taxpayers who have received penalties either for:

  • deliberate errors in their tax returns
  • deliberately failing to comply with their tax obligations

HMRC may publish information about a deliberate tax defaulter where an investigation has been carried out and the taxpayer has been charged one or more penalties for deliberate defaults and the penalties involve tax of more than £25,000. Details are only published once the penalties are final.

Internet link: GOV.UK publications

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