Toni Hunter's SuperBlog » Taxpayers

5 things you may not know about charities: No3

Toni — Tue, 01 Nov 2011 08:45:36 +0000

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.

From 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

The donor completes a Gift Aid declaration (see below) with their name, address and the date.
The charity fills in a claim form and send it to HMRC.
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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Tax Return deadline looming

Toni — Tue, 21 Sep 2010 21:00:35 +0000

How good are your I.T. skills?

If you have not yet completed your Tax Return for the year ended 5 April 2010 they may need to be fairly good as HM Revenue and Customs are encouraging taxpayers to file online. If you continue to use paper Returns, the usual 31 January timeline is substantially reduced to 31 October 2010.

Not filed your Tax Return online before?

If you have not filed Tax Returns online in previous years, you will need to register with HM Revenue and Customs beforehand. As this will take at least a week to process immediate action is required to meet the fast approaching deadline.

You will need to visit the website of HM Revenue and Customs on www.hmrc.gov.uk and select ‘Self assessment’ from ‘Do it online’. This will guide you through the process of creating a user name and password.

You will also need to have some personal details, including your Unique Tax Reference and National Insurance number or Post Code to hand.

Once you have done this you will be sent a personal activation Pin through the post, from the Government Gateway. With this you should be able to complete the registration process and to be able to file the Return online.

Need assistance?

Most people find the filing process relatively straightforward and there is help available on the website itself. There is also an online demonstrator showing how the service works and provides various specific examples. To see this go to www.hmrc.gov.uk/demo

Watch out: Not everyone is able to file online…

It must be pointed out that there are a few people who will not be able to use the online service due to some of the supplementary pages not being available on the internet site and, of course, if you do not have access to the internet you also have the problem of what you should do. The only answer is to contact ourselves as soon as possible and we will do our best to submit your Return in time.

Time

As emphasised above, for everyone who still has a Tax Return outstanding, the problem is time. Can you do everything in time and stay focused on your business?

Why not contact George Hay Chartered Accountants for peace of mind?

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.

Tax Cheats: Named and Shamed

Toni — Thu, 19 Aug 2010 20:41:53 +0000

HMRC now have powers to name and shame individuals and companies who deliberately evade taxes, by publishing their names, address and details of their evasion on the HMRC website.

New Powers

The law that provides HMRC with the power to disclose is included at Section 94 of the Finance Act 2009. This ruling can be used by HMRC for accounting periods starting 1 April 2010, it therefore may take a little time before anything ‘juicy’ is made public.

Deminimus

To be named and shamed the evasion must be deemed to be deliberate and involve tax of £25,000.

Preventing the embarrassment

A full voluntary disclosure of tax wrong doings without undue delay may help avoid the detail being published.

My thoughts

Once again HMRC have been given more opportunity to burden taxpayers with the subjective views of individual inspectors.

deliberate
undue delay and
‘full’ disclosure

are all terms that I consider could be misconstrued or misrepresented and this allows different cases to be dealt with in different ways dependant on the mood, attitude or experience of the inspector.

If you are exposed to this new HMRC power, defending your position by challenging the inspectors opinion of your guilt may well be expensive and stressful.

How do you feel about paying the wrong amount of tax?

Toni — Mon, 10 May 2010 12:45:45 +0000

PAYE notices of coding are notorious for being erroneous, but HMRC have surpassed themselves with this computer generated nightmare that not only leads to extra work and a lot of confusion but may even leave you paying too much tax.

Multiple Notices

In the last few months you may have received several Notices of Coding all showing different codes for the tax year 2010/11. There have been a number of instances where taxpayers have been receiving one tax code one day followed by a different one the next or even more than one code in one day. This has left many people bewildered and uncertain about exactly what tax code will be operated against their income and many of the codes issued are wrong anyway.

New HMRC system

The problems have occurred as a result of HM Revenue & Customs recently introducing a new system for issuing coding notices called the National Insurance and PAYE Service (NPS). The new service has brought to light various discrepancies in their records and so they have been trying to rectify the errors, hence so many codes being issued all at once. They expect to complete their review by mid April 2010 which will hopefully bring an end to all the confusion.

Resolution?

Any problems occurring as a result of an incorrect code will ultimately be resolved at the end of the tax year once a taxpayer submits their 2010/11 Tax Return to HMRC. However if serious problems are not dealt with near the beginning of the tax year it could result in a large underpayment arising for some people which it may not be possible to collect via a later year’s tax code. If you are not required to file a Tax Return, over or underpayments may go undetected for quite some time.

A careful review is necessary

In view of the problems which have occurred it is important that any codes received for 2010/11 are reviewed fully. If you believe that your code is incorrect you should either contact your advisor if you have one or HMRC as soon as possible.

Need help?

As agents we receive a copy of the majority of PAYE Coding Notices issued to our clients and therefore we are able solve many of the matters arising before problems begin to appear. We have discovered various reasons for an incorrect code but the problems particularly appear to have affected those with multiple employments. Close scrutiny of your code is therefore important.

Important deadlines for taxpayers…

Toni — Mon, 14 Sep 2009 21:23:29 +0000

Self-assessment deadlines have changed – don’t be late!

H M Revenue & Customs (HMRC) are working hard to encourage businesses and individual taxpayers to file online to help them become more efficient and effective. As part of this strategy they have changed the deadline if you wish to continue submitting a paper Return.

Generally, if you are sent a notice to complete a Tax Return you must return it completed before the later of 31 October following the end of the tax year and three months following the date of issue of the notice. Failure to do so will result in a £100 penalty regardless of the tax due. This is a significant change, so beware. (£100 per partner if the Return relates to a partnership)

For paper returns submitted by this date, HMRC will:

calculate your tax for you (though you or your accountant can calculate it for yourself if you want)
tell you what to pay by the following 31 January
collect tax through your tax code (if possible) where you owe less than £2,000.

Returns sent via HMRC’s website or an electronic service provided by your accountant may be submitted up to 31 January. There are many advantages of electronic submission which all our clients benefit from, the main ones being:

Tax Returns are processed almost immediately and an acknowledgement of successful submission is provided.
Your liability is calculated automatically and any refund due is issued by the system direct to your bank account. Typically this occurs within 10 working days and saves banking and postage costs/time. Manual processing can take weeks, sometimes months.
PAYE coding notices are updated and re-issued without delay (if appropriate)
The lack of ‘human’ intervention prevents processing errors and re-enforces the process now, check later strategy intended for Self-Assessment

There are a few situations where online tax returns can’t be made. In these cases the submission deadline is 31 January.

Companies House deadlines and penalties have changed too…..

If you operate your business through a Limited Company please be aware that the accounts filing deadline has been reduced by one month for accounting periods beginning on or after 6th April 2008.

A private company now only has 21 months from incorporation or in subsequent years nine months from its’ accounting period end to submit financial statements to Companies House.

From 1st February 2009 the late filing penalties imposed by Companies House have also become a lot more onerous.

If your accounts or Tax Returns are not up to date,

call us for a free no obligation consultation. 01480 426500