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HM Revenue & Customs has issued a consultation paper, How to Improve HMRC's Collection of Debt: Coding Out, which proposes to significantly increase the amount of back taxes it can collect from employees' wages through PAYE. PAYE is not an exact science: when it issues a tax code, HMRC tries to deduct the right amount of tax over the year as a whole but for various reasons it will sometimes turn out to have under-deducted tax - for instance a change of jobs, taking on part-time self-employed ... Continue Reading

The National Audit Office report into HM Revenue & Customs 2012-13 Accounts makes for grim reading for HMRC in parts - particularly in relation to the new Real Time Information (RTI) reporting system for PAYE. While most readers will be inured to the fact that the audit has been qualified because of the level of error and fraud ( HMRC and Tax Credits: Public Accounts Committee Criticises HMRC - Again ) the report expresses real concerns over RTI: Certain functions of RTI have not ... Continue Reading

In HMRC Campaign Offers Chance to Settle Old Tax Liabilities, HM Revenue & Customs sought to publicise the latest in a long line of "campaigns" to encourage the recalcitrant taxpayer to bring his or her tax affairs up to date. This is probably the closest so far to a "general amnesty" for taxpayers in that it does not focus on a particular sector, such as plumbers or medics. But note it is available only to people who are already in the Self Assessment Regime but haven't yet filed their returns ... Continue Reading

Income from renting out a property, including sub-letting a room to a lodger, affects your tax position. LITRG have published a guide on what you need to do. Introduction People do not always realise they have to tell HM Revenue & Customs (HMRC) when they start to receive a new source of taxable income, such as rents from letting out a property. The law obliges you to let HMRC know if you have a new liability to tax, at the latest by 5 October after the tax year in which it first arises. Information ... Continue Reading

Taxpayers who have failed to submit tax returns are being offered the chance to come forward and pay up under a new HM Revenue and Customs (HMRC) campaign. Beginning on 9 July, the campaign is aimed at people who have received a Self Assessment tax return or notice to complete a tax return for any year up to 2011-12 but have not taken action. As part of the campaign, HMRC will be writing directly to several thousand people it has identified using intelligence-gathering software, and will ... Continue Reading

There is an exemption for inheritance tax purposes in addition to the £3,000 annual allowance for gifts made out of income on a regular basis. It is important to establish the regularity of the payments in order to qualify for this relief, so if gifts are made in cash then these should be regular in amount and frequency taking one year with another. A better way of establishing regular payments may be to take out an investment policy for someone such as your (adult) child with premiums ... Continue Reading

There is an exemption for inheritance tax purposes in addition to the £3,000 annual allowance for gifts made out of income on a regular basis. It is important to establish the regularity of the payments in order to qualify for this relief, so if gifts are made in cash then these should be regular in amount and frequency taking one year with another. A better way of establishing regular payments may be to take out an investment policy for someone such as your (adult) child with premiums ... Continue Reading

TW Ed ponders some of the implications of HMRC's developing policy for evaluating and dealing with Tax Agents. This week, I have been watching the combined HMRC / CIOT / ATT webinar on the "new" Tax Agent Strategy, hosted by John Whiting. It has been suggested that this project will be “bigger” than Self Assessment. My gut reaction was to disagree – impossible! – but on reflection, it could well be. To be fair to HMRC, Jenny Cowles (Head of Agent Strategy) made ... Continue Reading

Mark McLaughlin CTA (Fellow) ATT TEP outlines the anti-avoidance rules on loans, advances and transfers of value included in Finance Bill 2013. [Note – this article is based on legislation in the Finance Bill 2013, which is subject to amendment.] Introduction The provisions imposing a 25% charge on close companies in respect of loans to participators (CTA 2010 Pt 10 ch 3) is well known to most tax advisers. The charge under CTA 2010 s 455 (commonly referred to as the ‘section ... Continue Reading

Tax credits claimants are being reminded that they have to renew their claims by the 31 July deadline or their payments might stop. Nick Lodge, Director General of Benefits and Credits, said: "We are asking claimants to renew early, to renew accurately and to renew on time. The sooner they renew, the sooner we can check payments are correct, meaning we avoid paying too little, or too much money that they will then have to pay back." Tax credits renewal packs have been sent to about ... Continue Reading