Posts tagged ‘Taxation’

HM Revenue and Customs (HMRC) has always taken a dim view of the late filing of self-assessment tax returns, but it has now introduced significant new penalties for those who fail to meet the deadlines.

The deadline

If you are registered for self-assessment and have not already filed your paper return then you will need to do so online by 31 January 2012. This may still seem a long way off, but it makes sense to start preparing now rather than leaving your return until the last minute, when it will be more difficult to deal with any issues which may arise.

The penalty

Back of the net!Under HMRC’s new regime, late returns will incur an initial fixed penalty of £100.

This will apply even if there is no tax to pay or any tax due for the year has already been paid on time.

If your tax return has still not been filed after three months, then HMRC will impose additional daily penalties of £10, up to a maximum of £900.

After six months, the penalty increases to either £300 or five per cent of the tax, depending on which is greater.  The penalty could increase to 100 per cent of the tax due if returns have still not been filed after 12 months.

Late tax

Any overdue tax must also be paid by 31 January.  If this deadline is missed then HMRC will impose a penalty of five per cent of the amount due after 30 days, six months and 12 months respectively. It is also worth noting that HMRC will charge interest on top of these penalties.

The Art of ProcrastinatingStop procrastinating

As with any tax matter, it is always better to act sooner rather than later.

The longer you leave it, the bigger the penalty will be.

 

 

At George Hay, we can assist with a wide range of tax matters, including ensuring your self-assessment tax return is filed on time.

Friendly, approachable, reliable professionals

Disclaimer: This article is for general guidance only. All taxation planning should only be undertaken after appropriate professional advice. George Hay Chartered Accountants are registered to carry on audit work and regulated for a range of investment business activities by the Institute of Chartered Accountants in England and Wales.

Gift Aid

If you are a UK taxpayer and you make a donation to a registered charity, gift aid can be claimed by the charity.  Effectively, the Government give the basic rate tax that the donor has paid on the amount they have pledged, to the charity.

Even a smile is an act of charityFrom the year 2000 onwards there is no minimum or maximum donation value for applying gift aid.

The amount of gift aid pledged by taxpayers and not claimed by charities runs in to several million pounds.

If the donor is a 40% taxpayer, the charity will receive the basic rate tax, currently 20% and the donor can claim the remaining 20% via their Self-Assessment Tax Return.  They can therefore afford to donate more!

How

  1. The donor completes a Gift Aid declaration (see below) with their name, address and the date.
  2. The charity fills in a claim form and send it to HMRC.
  3. HMRC makes a payment direct to the charity for the amount of basic rate tax claimed.

Example Declaration

“I wish the enclosed donation for £xx and any future donations I make to this charity to be treated as a Gift Aid donation.  I am a UK taxpayer”

 

The information provided in this blog illustrates my opinions and experiences, it does not constitute advice and I do not accept responsibility for any actions taken or refrained from as a result of reading this post.

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George Hay Chartered Accountants continues to expand its team with the addition of a new senior tax manager.

Heather Irvine will work at all three offices supporting our Tax Partner, Barry Jefferd.

Heather gained her Association of Taxation Technicians (ATT) and Chartered Tax Adviser (CTA) qualifications in 2000. Prior to that, she spent 10 years working for the Inland Revenue.  She joins the firm from Edwards and Keeping, in Dorchester, Dorset, where she was a tax manager.

Commenting on her new role, Heather said: “I’m looking forward to the diversity of clients and opportunities that working at George Hay will bring.”

Tax Partner Barry Jefferd said: “Following the increase in the amount of tax work we now carry out, we have been looking to strengthen our team and Heather brings with her a wealth of experience that will be of great benefit to our clients. We are delighted to have her on board as a valuable addition.”

In the past few days, with the complete mayhem caused by HMRC’s PAYE coding fiasco , clients of ours have received some very strange calls apparently from HMRC asking for payroll references and other data that we know they already have on their records, so please be wary of all unsolicited emails and phonecalls purporting to be from the Tax Office.

Too good to be true

Of course, no one wants to pay more tax than they should, so being told you are due a refund will come as good news.

In some cases, it may seem too good to be true – and that’s because it is.

If you receive a telephone call or an email from someone at HM Revenue & Customs  (HMRC) informing you of a tax refund then the person on the other end of the line is not the taxman but a criminal “phishing” for your bank account details.

HMRC has reported an alarming increase in the number of people being targeted in this way, with a record 83,000 phishing attempts reported in one month alone.

Written Correspondence

In some cases, letters are sent out purporting to be from external companies acting on behalf of HMRC and beginning with a sentence such as “we have reviewed your tax return and our calculations of your last year’s accounts show a tax refund of XXXX is due”. The letter will give a specific figure which the victim is supposedly due.

Phishing  and identity fraud

The thieves ask for bank details in order to pay in the non-existent refund. However, they then use this information to try to take money from the victim’s account.

Victims not only risk having their accounts emptied, but their details could also be sold on to other criminal gangs who may target them further.

Tax office communication policy

HMRC does not contact customers who are due a tax refund by telephone or email. It always writes to them directly, without using any external companies.

Advice

Anyone who receives a telephone call from someone offering them a tax refund should not give out any information to the caller but report it to the police immediately. Likewise, they should not reply to emails but forward them on to HMRC at phishing@hmrc.gsi.gov.uk.

If you have already responded to a telephone call, email or letter and think you may have been the victim of a scam then you should contact your bank or card issuer as soon as possible.

HMRC Update – September 2010

An email from “HMRC Online Services – test@test.com’ is being issued, stating the recipient has one new alert message and should log in to their Online Account to read it.  The link in the email directs you to a fraudulent website where personal data is requested.  If you receive this notification, please forward it to phishing@hmrc.gsi.gov.uk.

Friendly, approachable, reliable professionals

At George Hay, we are experienced in all areas of taxation and can advise you on whether a genuine tax refund is due. If you are in any doubt about any communications you have received regarding a refund, please speak to us.

Disclaimer: This article is for general guidance only.  All taxation planning should only be undertaken after appropriate professional advice.  George Hay Chartered Accountants are registered to carry on audit work and regulated for a range of investment business activities by the Institute of Chartered Accountants in England and Wales.


The information provided in this blog illustrates my opinions and experiences, it does not constitute advice and I do not accept responsibility for any actions taken or refrained from as a result of reading this post.