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Read This if You Have Missed the Tax Credits Renewal Deadline Print E-mail
Personal Taxes
Written by Lee Sharpe   
Wednesday, 20 August 2014 00:00

The Tax Credits 31 July is an important deadline, partly because it renews the claim for the current year, partly because it also confirms the claim for the previous year and partly because, if you miss the deadline, usually the payments will stop and HMRC will write to you to ask for its money back from the beginning of the tax year.

We think HMRC ‘done good’ this year by extending the filing deadline by a few days because of the industrial action around 31 July.

HMRC has advised us that:

“This year has seen a record lowest number of outstanding renewals. 455,000 failed to renew this year, down from 650,000 in 2013. Not everyone will renew their tax credits as those whose circumstances have changed may no longer be eligible but since tax credits will stop if they are not renewed, we’re urging people to ring us on 0345 300 3900.”

Since HMRC ‘done good’, we shall overlook that HMRC should be asking everyone to go through the renewals process if only to validate the previous year’s claim.

It is important to note that all is not lost if you have missed the deadline: there is a procedure for getting the current year claim back on track, without necessarily losing any payments. HMRC will soon be issuing statements to claimants, warning that payments have been suspended. Provided claimants contact HMRC to renew within 60 days of the date of the statement, the claim will be re-instated in full.

In line with HMRC’s recommendation that people take action now, there is no need to wait for the statement to arrive before contacting HMRC but the statement does ‘start the clock’ for the 60-day limit. Our esteemed colleagues at the Low Incomes Tax Reform Group have helpfully put together some detailed guidance on what to do if you have missed the deadline  and we are, as ever, delighted that they can assist.

HMRC to Close EBT Settlement Opportunity March 2015 Print E-mail
Written by HM Revenue & Customs   
Thursday, 14 August 2014 00:00

HMRC warns deadline date for EBT Settlement Opportunity; joint announcement with Liechtenstein.

A settlement opportunity for employers who have used Employee Benefit Trusts (EBT) to avoid tax will close in March 2015, HM Revenue and Customs (HMRC) announced today.                        

The initiative, which launched in April 2011 following the introduction of the new Disguised Remuneration rules in Finance Act 2011, has raised £800 million in tax and National Insurance Contributions from around 700 employers who previously used the trusts as tax avoidance vehicles.

Users who wish to settle will need to have notified HMRC of their intention by 31 March 2015 and have entered the agreement and paid all amounts due by 31 July 2015. More information on the EBT settlement opportunity is available on HMRC’s website at Employee Benefit Trusts, Settlement Opportunity

HMRC expects others to settle in the near future and will pursue those who don’t do so through the courts as it does not believe that schemes using EBTs to avoid paying Income Tax and National Insurance work.

Some individuals seeking to use EBTs to avoid tax have tried to use the Liechtenstein Disclosure Facility (LDF) – under which individuals with undeclared offshore assets can regularise their tax affairs – to find another route to pay less tax. HMRC and the Liechtenstein government have today announced changes to the LDF which, among other things, mean that users of EBTs that are caught by the Disclosure of Tax Avoidance Scheme (DOTAS) rules cannot take advantage of the full terms of the facility. HMRC’s joint declaration with the Liechtenstein government today means that the full favourable terms of the Liechtenstein Disclosure Facility (LDF) will no longer be available to users of EBT and other avoidance arrangements disclosed under the Disclosure of Tax Avoidance Schemes (DOTAS).

These users are still able to access the limited terms (immunity from prosecution and a bespoke service with a single point of HMRC contact) but will gain no financial advantage from settling under the LDF. Those EBTs wishing to settle will now need to consider which relevant settlement opportunity will suit their needs, but have a limited time to take advantage of the EBT Settlement Opportunity and should act now. More information on the LDF is available here Liechtenstein Disclosure Facility

Jennie Granger, HMRC’s Director General of Enforcement and Compliance, said:

“Time is running out for anyone who used an EBT to avoid paying tax and still hasn’t settled with HMRC through the settlement opportunity.

EBTs are avoidance vehicles and we will continue to pursue those who do not pay up. I would encourage all employers who have used these schemes to take this opportunity to settle under these clear terms. They can hold out and litigate, but they may well end up paying more tax, as well as big legal fees. They are also up against HMRC’s strong litigation record – we win around 80% of avoidance cases heard in the courts.

This settlement opportunity is just one of a host of ways HMRC is tackling avoidance, not least Accelerated Payments which mean that many people who have avoided tax will now have to pay up quicker than ever before. This puts them on a level pegging with the vast majority of people who have nothing to do with tax avoidance and pay their tax up front.”

HMRC Clocks Up Another Tribunal Win Print E-mail
Personal Taxes
Written by HM Revenue & Customs   
Thursday, 31 July 2014 00:00

HM Revenue and Customs (HMRC) has secured its eighth tribunal win in a row against tax avoidance schemes run by NT Advisors.

Between them, HMRC’s court successes against NT Advisors have now protected over £750 million in tax, defeating five of the promoter’s schemes. Among them is the Working Wheels scheme, where participants claimed to be second-hand car dealers.

In this latest case, the Upper Tribunal dismissed NT Advisors’ latest appeal that a scheme which used complex financial arrangements involving alleged overseas securities worked. The ruling upholds an earlier First-tier Tribunal judgment in HMRC’s favour.

In total there were 305 users of the scheme and this ruling alone is expected to protect £156 million in tax that would otherwise have been lost. HMRC will now pursue the other users of the scheme to make sure all the taxes that are due are paid.

The Financial Secretary to the Treasury, David Gauke, said:

“While the vast majority of people pay the taxes they owe, this victory shows HMRC’s determination and effectiveness in clamping down on those who seek to avoid their responsibilities.

Users of NT Advisors schemes, or those considering using their schemes, should know by now that HMRC is very successful at defeating them, and give serious thought to ending their involvement.”

HMRC has a dedicated helpline – 03000 530435 – for those who have engaged in tax avoidance schemes but now want to settle their affairs. Further information can also be found at Tempted by Tax Avoidance?

HMRC is writing to users of many of NT Advisors’ schemes to make sure they know how successful the department is at beating their schemes in court. In the last two months the department has written to more than 1,000 users, and users of the Bluebox scheme will be contacted shortly.

Further Information

  1. The Upper Tribunal ruling in Andrew Chappell versus The Commissioners for HM Revenue and Customs can be found at Andrew Chappell v HMRC [2014] 
  2. This complex scheme devised by NT Advisors used a series of circular and self-cancelling transactions involving alleged overseas securities. These purported to create substantial tax losses where, in reality, no economic loss had been suffered.
  3. HMRC will be writing soon to investors in the scheme this decision applies to so they know what action will be taken and what this means for them. HMRC wants to make it easy for those users to settle and will take strong decisive action for those who do not.
  4. Details of HMRC’s three most recent tribunal wins over NT Advisors’ schemes:

Bluebox (May 2014) – protected £21 million in tax 

Working Wheels (February 2014) – protected £290 million

Barnes - Court of Appeal (January 2014) – protected £100 million 

One Week to Go: Renew Tax Credits Before 31 July Print E-mail
Written by Lee Sharpe   
Thursday, 24 July 2014 00:00

HMRC has today announced that up to a million claimants have yet to renew their Tax Credits claims, with a week to go before the normal deadline. Tax Credits claimants should generally renew their claim by 31 July in order to preserve their entitlement.

Remember that the renewals process also finalises 2013/14, as well as validating the current year claim - failure to renew will result in HMRC asking for all tax credits paid since April 2014 to be repaid.

Some claimants will have received renewal forms pre-populated with information about earnings from employment, based on employers' submissions under the new RTI regime. Claimants should check that the information is compete and correct, bearing in mind that this is still quite a new procedure.

This year, there is the option to renew online - see

Renew Your Tax Credits Online

and so far, over 200,000 people have used the service - not everyone can use the online facility, although most can.

It is also possible to renew by telephone -

0345 300 3900

HMRC says that more than 650,000 people failed to renew by 31 July, last year. While it may be possible to maintain a claim it is strongly recommended that the deadline be observed.

Nearly 1 Million Tax Credits Claimants May Lose Benefit if They Don’t Renew in Time Print E-mail
Written by HM Revenue & Customs   
Thursday, 24 July 2014 00:00

With the tax credits renewal deadline just one week away, HM Revenue and Customs (HMRC) is reminding claimants to renew or face losing their payments.

More than 865,000 claimants have still not yet renewed their tax credits. They have until 31 July to do so, or their payments might end. Last year more than 650,000 people failed to renew on time.

This year, for the first time, claimants can renew online at Renew Your Tax Credits Online, as well as being able to renew by post and phone. ( 0345 300 3900 )

HMRC recently published a list of reasons given for missing the deadline, including “I didn’t need the money because I’d met a rich bloke, but he dumped me”, “my dog ate the form” and “the form was locked in the boot of my car, and then my car caught fire”.

Nick Lodge, Director, General of Benefits and Credits, HMRC, said

“Time is running out for people to renew their tax credits, or they risk losing their money.

The majority of people can renew online this year, which is quick, easy and can be done at a time of day to suit them.

However they choose to renew, the most important thing is to do it before 31 July.”

HMRC asks all claimants to check the accuracy of the information in their renewals pack, and to tell the department about any changes to their circumstances that they haven’t already reported, such as to working hours, childcare costs or pay.

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