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Steve Allen, Director of VAT Solutions (UK) Ltd, looks at some problems and issues caused by security demands, and considers what can be done about them.  IntroductionThe number of security demands being issued by HMRC has risen dramatically in the last 12 months.  In a lot of cases, the demand is issued on a routine basis without any background checks or information being considered.  This article looks at what you should do if you receive a demand, and gives guidance on whether there is a reasonable ... Continue Reading

HMRC have issued a reminder to large employers to prepare for important PAYE changes coming into effect in April 2009.From 6 April 2009, it becomes mandatory for employers with 50 or more employees to send certain in-year PAYE information online to HMRC. The new rules cover the following items:form P45(1) - details of employee leaving;form P45(3) - new employee details;form P46 - employee without a form P45; andsimilar information for people receiving a pension. To file online, employers must first ... Continue Reading

Travellers can now bring back more than double the amount of gifts and souvenirs from outside the EU without paying UK duty.From 1 December 2008, the tax and duty-free allowance rises from £145 to £300, with a further increase to £340 in January 2009 to take account of recent changes in the sterling/euro exchange rate.Following a proposal from the then Chancellor of the Exchequer Gordon Brown to the European Commission in 2004, the Government has announced an increase to the allowance for what ... Continue Reading

HMRC have published revised advisory fuel rates for company car users, which take effect from 1 January 2009. The revised figures give about one month's notice of the changes and apply to all journeys on or after 1 January 2009 until further notice. As was done for the July 2008 changes, HMRC are content for the new rates to be implemented immediately where employers are able and wish to do so.  The new rates are as follows:Engine size Petrol  DieselLPG 1400cc or less 10p 11p 7p1401cc to ... Continue Reading

Regulations reducing the standard rate of VAT to 15 per cent from 1 December 2008 have been published.The Value Added Tax (Change of Rate) Order 2008 (SI 2008/3020) reduces the VAT rate from 17.5 per cent to 15 per cent. The change is to operate from 1 December 2008 to 30 November 2009. Continue Reading

John Andrews of LITRG warns that official statements on childcare vouchers do not necessarily tell the full story in terms of the potential effect on employees in receipt of tax credits.  IntroductionWe return once more to our perennial health warning about tax free childcare vouchers provided by employers. If employees are receiving tax credits of more than £545 a year, they can lose money by accepting these vouchers.We still see far too many incorrect statements on government and other websites; ... Continue Reading

Matthew Hutton MA, CTA (fellow), AIIT, TEP highlights some practical issues relating to the Inheritance Tax spouse exemption in IHTA 1984, s 18.  IntroductionThe £55,000 threshold in IHTA 1984 s 18(2) cannot be recycled.  That is, even if the transferor survives the gift by seven years (so otherwise making a PET exempt), IHTA 1984 s 3A does not help as the gift would not otherwise be ‘a chargeable transfer’ as required by IHTA 1984 s 3A(1A)(b).(Trust Discussion Forum 19.8.08, posting by ... Continue Reading

Taxbriefs points out some potential difficulties for traders arising out of the change in VAT rate announced in Pre-Budget Report 2008. IntroductionThe standard rate of VAT was reduced in the Pre-Budget Report on 24 November 2008, the first cut in standard rate VAT since 1974. The reduction from 17.5% to 15% only applies for the period from 1 December 2008 to 31 December 2009 – it will then revert back to 17.5% on 1 January 2010.The rate change presents a number of challenges to clients – ... Continue Reading

Chancellor Alistair Darling has announced the government's Pre-Budget report for 2008. The report is in effect a mini-Budget designed to help the government's finances cope with impending recession and the effects of international financial crisis. The key features are summarised in the following paragraphs.Income tax rates and allowancesFor 2009/10, the main rates of income tax will be the 20% basic rate and the 40 per cent higher rate.The basic personal allowance for 2008/09 was increased above ... Continue Reading

Robin Williamson outlines the response by LITRG to HMRC's proposed changes to the interest and penalty regimes for the late filng of tax returns and the late payment of tax. Key PointsIn any new regime of interest and penalties, the key principle is that late payment may lead to an interest charge and late filing may result in a penalty, but in general there should be no overlap. That is the main thrust of LITRG’s response to HMRC’s latest proposals for changes to the penalty and interest ... Continue Reading