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HMRC have commenced issuing penalty notices where their records show that employers have not yet sent their 2006-07 employer’s annual return (P14s and P35) and, where due, a 2006-07 contractor’s annual return (CIS36).This next round of penalties is a follow up to the penalties issued in September 2007 and January 2008. The returns for which the penalties are now being issued, were due by 19 May 2007. The penalty will be £100 per 50 employees and/or ... Continue Reading

A new study by accountants and business advisers BDO Stoy Hayward LLP has revealed that the individual taxpayer has borne the brunt of the Government’s tax policies since they came to power in 1997.The study follows the announcement by the Adam Smith Institute that Tax Freedom Day in 2008 falls on Monday 2nd June, seven days later than when the current Government came to power in 1997. Tax Freedom Day calculates the date on which the average UK taxpayer would stop working to pay their share ... Continue Reading

The Liberal Democrats have tabled an amendment to the Finance Bill for a comprehensive statutory tax residence test.The Chartered Institute of Taxation (CIOT) has been calling for a comprehensive statutory residence test for some time as a way of bringing certainty into the current residence situation, particularly in the light of recent cases. The CIOT intends to discuss this issue with other relevant professional bodies in order to develop a consensual view on the appropriate test to ... Continue Reading

John Andrews of the Low Incomes Tax Reform Group ( http://www.litrg.org.uk )highlights a topical tax issue in view of legislation affecting non-UK domiciled indivudals published in Finance Bill 2008.IntroductionIt is important for everyone in the UK to know whether one is domiciled in one of the countries of the UK for tax purposes.If you are not UK domiciled there are advantages, although planned changes in the law effective from 6 April 2008 are trying to remove some of those, particularly ... Continue Reading

Mark McLaughlin CTA (Fellow) ATT TEP considers a recent Inheritance Tax case on the ownership period test for Business Property Relief for shares in respect of rights issues.Mark McLaughlinThe Ownership testA potential problem with Business Property Relief (BPR) for Inheritance Tax (IHT) purposes is the general rule that no BPR is due unless the relevant business property has been owned by the transferor for a minimum period of two years (IHTA 1984, s 106). However, there are certain exceptions to ... Continue Reading

HMRC have published statistics for 2006-07 tax credits, which show that overpayments have fallen by £700 million since 2005-06, and are now at less than half the level they were in 2003-04.The reduction is the result of measures introduced from 2006, including reducing the period in which people have to renew claims, increasing the number of changes in circumstances reported to HMRC, and allowing an increase in income of up to £25,000 before there is a change to families' entitlement. ... Continue Reading

There are several changes to the P46 process and reporting requirements for employers that came into effect from April 2008.From April 2008, HMRC have agreed a relaxation in the P46 process. When a completed P45(Part 3) is not provided, an employee will not necessarily have to complete form P46. Employers may ask them to provide this information on business stationery or in an e-mail, for example. It will be up to the employer to decide how they get the P46 information and whether they need a signature ... Continue Reading

During the last few weeks there has been speculation about whether more multinationals based in the UK would move their headquarters to another country.The Chartered Institute of Taxation (CIOT) believes that the main factor that has prompted this is the climate of uncertainty caused by inadequate pre-consultation on changes that have been made in successive Budgets and Pre-Budget Reports (PBRs).  This has meant that international business structures have to be regularly rearranged to deal with ... Continue Reading

Anyone who has seen details of the new penalty regime will appreciate that cases like this are more likely to become a permanent fixture in the future.  This is because HMRC is seeking to make the new regime ‘behaviour driven’ and not simply tax geared.Taxpayers will be penalised on the basis of the nature of the error, the behaviour that led to the error and how the matter was subsequently dealt with by the taxpayer, i.e. there is plenty of scope for subjectivity and taxpayers may ... Continue Reading

John Andrews of the Low Incomes Tax Reform Group ( http://www.litrg.org.uk )explains that the Chancellor's proposed increase in personal allowances will not compensate every taxpayer affected by the abolition of the 10% income tax rate. The 10% FuroreNot everyone wins overall in the 10% furore, even after the £2.7 billion “compensation” package announced by the Chancellor.One particular group, those between 60 and 64, are still likely to lose either because their income ... Continue Reading