Posts tagged ‘Taxman’

If you are a tutor, a fitness instructor or make your money by selling through the internet, then the taxman may soon be taking a particular interest in your financial affairs.

More targeted investigations

HM Revenue and Customs (HMRC) is stepping up its tax investigations of specific sectors where it believes tax is being underpaid.

A date for the investigations to launch has yet to be announced and there have been no guarantees of an amnarrow found the targetesty for those who forward to get their affairs in order wish to confess, although those who settle up any unpaid tax early are far more likely to get much better terms than those who are caught out.

Among those targeted will be private tutors and coaches who earn main or secondary income from private lessons, whether they are qualified or not, and ranging from national curriculum tutors to fitness or lifestyle coaches.

HMRC is also interested in individuals who use online marketplaces such as eBay to buy and sell goods as a trader or business without paying the resulting tax. This will, of course, not affect those who buy or sell in low volumes on eBay, such as private individuals selling unwanted items. HMRC is only interested in those who consistently use the online marketplace to make a profit.

Non-VAT registered businesses

Other traders who will come under the spotlight will be those whose turnover exceeds the £73,000 threshold but who have not registered for VAT. Don’t forget that now that the Inland Revenue and Customs and Excise work together as HM Revenue & Customs, they share your business data.

Act early to mitigate penalties

As with any tax matter, it is always better to act now than to wait for the taxman to come calling.

If you fall under any of these sectors then George Hay can help you register with HMRC and get your affairs in order.

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.

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New businesses excluded from a Government scheme to encourage more start-ups should still ensure they plan ahead to minimise their tax liabilities.

The National Insurance Contributions (NIC) holiday scheme

The scheme was launched on September 6th 2010 and means employers do not have to pay the first £5,000 in NICs for each of the first 10 workers during the first 52 weeks of their employment, provided that year falls within the three-year period up to September 5th 2013.

However, while new firms across the UK are set to benefit from potential tax savings of up to £50,000, those in the East, South East and London regions are being excluded from the scheme.

Another postcode lottery?

Barry Jefferd, Tax Partner at George Hay, said: “This is incredibly unfair on new businesses in the region who will be at a disadvantage compared to their counterparts in other areas.

“However, employers should still give serious thought to tax planning in order to minimise their liabilities and take advantage of any opportunities that might not be available at a later stage.

“While businesses in the East may not be able to enjoy the same tax breaks as others around the country, we can still help them make valuable tax savings, ensuring more of their hard-earned money goes back into those companies rather than the taxman’s pocket.

“Equally, if any new businesses in the area are unsure of their NIC obligations, then we can advise them accordingly.”

 

Further reading: NI holiday scheme slammed by Labour, Accountancy Age 04.01.12 – Administration costs more than savings.

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.

 

 For more business news updates like this, please subscribe to my monthly business support newsletters using the “join my lists”  widget in the top right of your screen.  Thank you.

If you found this post interesting/useful please share it with your social network and/or bookmark it.  Also, your comments are always valued and will help me to write new posts that are relevant to readers of this blog.

If you are a plumber or heating engineer and have undeclared earnings then now is the time to tell the taxman.

 

New amnesty launched 

Plumber James #2HM Revenue and Customs (HMRC) has launched a ‘tax amnesty’ known as the Plumbers Tax Safe Plan (PTSP).

 

The PTSP is the fifth tax amnesty to be offered to UK residents. Those targeted in previous schemes have included doctors, dentists and offshore account holders.

  

The amnesty provides an opportunity for plumbers who have not yet done so to make a full disclosure about their income without receiving excessive penalties and is only open until May 31st. Those who register with the scheme before this date will then have until August 31st to pay any back taxes as well as interest and penalties.

 

Potential Penalties

 

The Look of (Un)certainty...In most cases, HMRC will impose a penalty of 10%, although this could vary between zero and 20%, depending on your individual circumstances.

 

Those with undeclared earnings who fail to take advantage of this opportunity will face a crackdown by HMRC, which will be using information from the CORGI and Gas Safe registers to identify individuals it wants to question.

 

You can be sure that the penalties will be a lot higher if the taxman catches you out – and he is unlikely to be too sympathetic if you did not use the disclosure opportunity available.

  

While there are still costs involved, including the reduced penalty, the bill for making a full disclosure will still be a great deal cheaper than it would be when the taxman comes knocking.

 

Barry Jefferd, Tax Partner at George Hay, can advise on a wide range of taxation matters, including making a disclosure to HMRC. This opportunity is unlikely to be repeated, making it all the more important to act sooner rather than later.

 

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.

 

 For more business news updates like this, please subscribe to my monthly business support newsletters using the “join my lists”  widget in the top right of your screen.  Thank you.

If you found this post interesting/useful please share it with your social network and/or bookmark it.  Also, your comments are always valued and will help me to write new posts that are relevant to readers of this blog.

If you are planning to treat your employees to a festive event, take care not to create a taxable benefit, that would certainly make your event expensive for both your business and your staff – Bahh Humbug!

The rules clearly state that employers can spend up to £150 a head annually on staff events, not a penny more. If the total cost of the event (including travel, accommodation etc) divided by the number who attended equates to £150.01 the whole amount is taxable.

The £150 is inclusive of VAT and can be spent on one or more events in the tax year.  The type of event you chose is not an issue, but all employees must be invited and it must be considered an annual event.  So a one-off party to celebrate a retirement for example does not qualify.

Unfortunately, you need to plan and budget carefully.  Its a delicate balance between being a generous, hospitable boss and playing Scrooge.

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.

If you were among those hit by the new 50p top tax rate back in April, then you could now be more likely to receive a rather unwelcome knock on the door from the taxman.

Proposal

Under plans unveiled by the Liberal Democrats at their recent conference in Liverpool, half of the UK’s 300,000 higher earners affected by the top tax rate face having their tax affairs checked over by HM Revenue and Customs (HMRC).

This means that the number of tax investigations will rise from the current figure of 5,000 to 150,000 a year – an increase of 3,000%.

Why?

The £900 million drive is designed to crack down on tax avoidance, the legal practice of using existing provisions within the current tax regime to minimise your tax liabilities. This should not be confused with tax evasion, where tax liabilities are avoided by illegal means, amounting to tax fraud.

Those who ‘hide’ money in offshore accounts will also come under scrutiny as part of the increased investigations.

As a result of the scheme, the number of criminal prosecutions relating to tax matters is expected to increase five-fold, while the Treasury has announced that it expects the initiative to bring in £7 billion a year by 2015.

While tax avoidance is certainly not illegal, the announcement highlights the importance of seeking professional advice on all tax matters to ensure you do not fall foul of any investigation.

Impact on small business

Even if you have nothing to hide, tax investigations can be both costly and time-consuming, particularly for smaller businesses which have neither the time nor the money to spare.

Need support?

Friendly, approachable, reliable professionals

At George Hay, we can advise clients on all aspects of taxation and can help you ensure that all your tax affairs are in order. We can help you ensure you do not pay too much or too little tax and, should you find yourself the subject of an investigation, can offer as much assistance as you need.

We are also able to offer tax investigation protection. As with any insurance, everyone hopes they will never need to use it, but taking out cover now could save you thousands of pounds in investigation fees should the taxman come calling – money that could be put to better use in your business.

For more information on any area of taxation, including tax investigations, or to find out more about tax investigation protection, please contact us.

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.

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.