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Personal Taxes
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Written by Sarah Laing
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Thursday, 02 July 2009 17:33 |
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Families and individuals currently receiving tax credits are being reminded that they need to renew their claims by 31 July – otherwise their payments could stop. Renewing is simple – claimants need to check the information in the renewals pack they’ve been sent, and let HM Revenue & Customs (HMRC) know if their circumstances have changed, such as working hours, child care costs or pay. They must also provide details of their previous year’s income, so HMRC can check they are receiving all the tax credits they’re entitled to. To complete the forms, claimants will need relevant information to hand, such as childcare details and, if they’re employed, payslips and their end-of-year P60 form. And after renewing, claimants should make sure they let HMRC know about any subsequent changes in their circumstances, as soon as they happen. HMRC’s Director of Benefits and Credits, Richard Summersgill, said:
“It’s important that anyone currently claiming tax credits renews their claim by 31 July, or their money could stop. Don’t leave it to the last minute – renew now and avoid a last-minute rush.” Claimants on “nil awards”, and those receiving only the full family element of Child Tax Credit, will just receive the statement of their 2008/09 award. If these details are correct, no further action is needed, and their claims are automatically renewed. However, if the details on the award statement are wrong, they must tell HMRC. For further information on tax credits, see the HMRC website at www.hmrc.gov.uk/taxcredits, or call the tax credits helpline on 0845 300 3900, which is available from 8.00am to 8.00pm, seven days a week.
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Capital Taxes
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Written by Sarah Laing
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Monday, 29 June 2009 19:44 |
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HMRC Trusts department has advised that the letters formerly issued to acknowledge that a return has been processed without needing to repair or amend it, have been withdrawn. HMRC Trusts have until now sent an acknowledgement letter to agents following the processing of a paper return where the taxpayer has self-calculated their liability and they had no reason at that stage to revise the calculation. The wording on the acknowledgement letter read, 'Your client’s trust tax return for the year 2007-2008 has been processed without any revision'. In future, HMRC Trusts will no longer issue a letter following the processing of a return where they had no reason to revise the calculation. This will bring HMRC Trusts into line with the rest of HMRC processing.
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VAT
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Written by Sarah Laing
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Friday, 26 June 2009 09:50 |
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HMRC have issued Brief 33/09, in which they aim to clarify their policy following the House of Lords judgment in The Principal and Fellows of Newnham College in the University of Cambridge [2008] UKHL 23. The case before the House of Lords concerned whether Newnham was 'in occupation' of the college library. If they were, their option to tax the library would be disapplied and their occupation would be for the purpose of making supplies of exempt education. Consequently, the VAT incurred on the rebuilding and refurbishment of the library would be irrecoverable. The House of Lords upheld the judgment of the Court of Appeal and found in Newnham's favour. They concluded that Newnham was not in occupation and, as a result, that their option to tax was not disapplied. HMRC now accept that physical presence alone is not the correct test of occupation for the purposes of what is now VATA 1994 Schedule 10 Paragraphs 12 to 17 (the 'anti-avoidance test'). Following the House of Lords judgment, a person is considered to be 'in occupation' if, in addition to physical presence which occupation normally entails, they have the right to occupy the property as if they are the owner and to exclude others from enjoyment of such a right. This means a person must have actual possession of the land along with a degree of permanence and control. Such a right will normally result from the grant of a legal interest or licence to occupy. Occupation could also, however, be by agreement or de facto and it is therefore necessary to take account of the day to day arrangements, particularly where these differ from the contractual terms. An exclusive right of occupation is not a requirement; an agreement might, for example, allow for joint occupation. Equally, it is not necessary for a person to be utilising all of the land for all of the time for them to be considered as occupying it. A person whose interest in land is subject to an inferior interest, such as to prevent him from having rights of occupation for the time being, is not 'in occupation' for the purposes of the anti-avoidance test until the inferior interest expires. It should be noted, however, that an important feature of the test is that it is forward looking and takes account of the intended or expected occupation of the building at any time during the Capital Goods Scheme (CGS) adjustment period. As a result, a person who has granted an inferior interest but intends during that adjustment period to occupy the land himself would intend to be 'in occupation' for the purposes of the anti-avoidance test and so must consider whether his intended occupation was for eligible purposes. However, a person can ignore the following types of occupation for the purposes of the test: - occupation which is purely for the purpose of making his rental supplies under the grant, since those are the very supplies whose liability he is trying to determine by applying the test. For example:
- occupation by the grantor between the date of the grant and the start of occupation by the tenant which is for the purpose of undertaking refurbishment or repairs,
- occupation by maintenance, security or reception staff (or similar), unless it is for the purpose of providing ongoing services separate from the letting itself. - occupation at a future date, but within the CGS adjustment period, which is solely for the purpose of re-letting the property or making a fresh grant.
Businesses that were wrongly denied input tax recovery may submit claims to their local Business Advice Centre. These will be subject to a three-year limitation period (four years from 1 April 2009, subject to a transitional period). All such adjustments or claims must take account of any underdeclared output tax as a result of incorrectly treating the option to tax as disapplied. Further information about claims can be found in HMRC Notice 700/45: How to correct VAT errors or make adjustments or claims.
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Business Tax
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Written by Sarah Laing
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Tuesday, 23 June 2009 19:29 |
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The latest edition of HMRC Agent Update – the electronic update for tax agents - is now available. Madeline McGrillen, Head of Tax Agent Communications, said: “Agent Update is a bi-monthly publication that rounds up all our latest tax information services and consultations and directs agents to further information online. We did some research earlier in the year which showed that nearly 90% of agents who read the Update found its section on tax issues useful - it’s a great way to stay in touch with what is going on. “Agents can now sign up to receive automatic reminders when Agent Update is published by registering online at www.businesslink.gov.uk/taxagents/register” The Update provides tailored information specifically for agents, which is designed to keep them informed across a wide range of taxes and services. The latest edition of Agent Update, which looks at how agents can file self assessment returns online for earlier tax years and the new PAYE upgrade, can be found online at http://www.hmrc.gov.uk/agents/update12/index.htm.
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