Tax
NICs and income tax consultation begins
HM Revenue & Customs has launched a consultation on the proposed integration of income tax and National Insurance Contributions (NICs).: The department aims to gather opinions from interested parties through the summer, which will inform its proposals for reform in autumn 2011.
Mon, 1 Aug 2011 • Read more
Revenue collection unit to pursue late payment
Anyone making late payments to HM Revenue & Customs will be pursued until the Revenue receives its share, the head of debt management and enforcement for HMRC has warned.: Speaking at the Institute of Chartered Accountants in England and Wales’ conference last month, Dr Mark Abani, who personally signs off all Time to Pay requests above £1m for HMRC, said: ‘If you do not play the game we will relentlessly pursue you until we get our share.’
Fri, 1 Jul 2011 • Read more
New ‘tax agent’ rules cause concern
An HM Revenue & Customs consultation has caused concern among payroll professionals over whether they will be unable to act as ‘tax agents’ in the future.: The document, ‘Establishing the future relationship between the tax agent community and HMRC’, seeks opinions on how best to formalise ‘tax agents’ interacting with HMRC and suggests all ‘paid agents’ should enrol with the department.
Fri, 1 Jul 2011 • Read more
Government commits to review IR35
The Government has confirmed its commitment to reviewing the way in which IR35 is administered by HM Revenue & Customs.: IR35 legislation is designed to eliminate the avoidance of tax and National Insurance Contributions through the use of intermediaries, but it has caused tax uncertainties for the self-employed.
Wed, 1 Jun 2011 • Read more
Osborne accused of ‘stealth’ tax
George Osborne is liable to accusations of a ‘stealth’ tax rise in changing the inflation measure to be used for future upratings of National Insurance contributions (NICs) thresholds. In last month’s Budget, the chancellor announced that from 2012 the Consumer Prices Index (CPI) will be used to uprate the point at which NICs become payable, rather than the Retail Prices Index (RPI). In recent years CPI has been lower than the RPI, which includes housing costs.
Fri, 1 Apr 2011 • Read more
Warning over NI and tax merger
The Government risks alienating the public with its proposed merger of National Insurance (NI) and Income Tax, a senior member of HMRC has warned.: Speaking at the Payroll World Spring Update conference the day after the 2011 Budget was announced, Phil Nilson, employer strategy manager for HMRC’s business customer unit’s employer team, said public perception of how NI operates would present a barrier to any system changes.
Fri, 1 Apr 2011 • Read more
Fears over new tax rules
Specialist tax advisers have warned of complexity and ambiguity over the Government’s plans to clamp down on ‘disguised remuneration’ schemes that attract lower rates of income tax and National Insurance Contributions. Vehicles such as Family Benefit Trusts (FBTs) and Employer-Funded Retirement Benefit Schemes (EFRBS) may be categorised as ‘disguised renumeration’ under the proposals.: Matthew Brown, technical officer for employment taxes at the Chartered Institute for Taxation, said the rules could mean that deferred remuneration, for example in the banks, could attract a tax charge at the point of transfer to a trust, even though they may be subject to forfeiture and never actually be paid to the employee.
Fri, 1 Apr 2011 • Read more
Lack of tax experts at HMRC, industry figures claim
HM Revenue & Customs is suffering from a lack of tax experts at its senior level, according to comments made at the launch of the All Party Parliamentary Group on Taxation’s report: ‘PAYE Review and Recommendations’ last month.: During the meeting at the Houses of Parliament, one attendee claimed that currently only three members of the board of HMRC were trained tax inspectors. ‘The three of them are facing retirement,’ he said. ‘Who will succeed them?’
Fri, 1 Apr 2011 • Read more
Exchequer Secretary pledges simpler taxes
The Government has reiterated its promise to simplify the tax system and end the ‘constant tinkering’ that it said it had endured under the previous Labour administration.: Speaking to the Financial Executive Network Group in London at the end of January, David Gauke, Exchequer Secretary to the Treasury, promised ‘a simpler, more stable tax system… with fewer exemptions and fewer reliefs’. Decrying the increasing complexity of the tax system under the previous Government, Gauke remarked: ‘It got to the stage where Tolley’s began using a smaller font in a fraught bid to keep down the number of pages [in its tax guides].’
Tue, 1 Mar 2011 • Read more
HMRC gets tough
HMRC is inviting consultation on tougher compliance for PAYE operation. ‘This consultation looks at how a requirement for security can ensure that those employers who are determined rulebreakers do not gain a competitive advantage over those who pay on time,’ HMRC said. It added that it is ‘committed to helping those who need time to pay.’: Consultation ends on 9 February. Comments on the draft regulations will be welcomed until 9 March.
Fri, 24 Dec 2010 • Read more
Concern raised on tax avoidance clampdown
Concern has arisen that legitimate reward schemes could fall foul of new measures to clamp down on tax avoidance in employee remuneration.: The Government last month confirmed it will introduce legislation to tackle arrangements that involve trusts or other vehicles used to reward employees in ‘disguised remuneration,’ where it results in avoidance or deferment of income tax or National Insurance Contributions (NICs).
Fri, 24 Dec 2010 • Read more
HMRC debts ‘escalate’ as regional offices close
Employers may increasingly find debt collectors knocking on their doors as a result of HM Revenue & Customs’ (HMRC) decision to close 130 regional tax offices, a leading payroll services director has warned.: Helen Harvey of Enable Ltd has reported cases in which underpayment notices were handled inefficiently by centralised HMRC offices, which could have been solved quickly with intervention from a local tax inspector. She has also criticised HMRC call centres for making mistakes.
Fri, 24 Dec 2010 • Read more
Tax & benefit systems at risk of cyber attack
Online tax and benefits systems could be the target for hostile cyber attacks, Iain Lobban, the chief of the Government’s secret surveillance centre GCHQ, said in a speech last month.: The head of the normally secretive agency gave an unprecedented public warning on the vulnerability of UK citizens as well as businesses, that could increase in scale as more payments are moved online.
Thu, 4 Nov 2010 • Read more
Tax shortfall set to reach £42bn
The tax gap – the difference between revenues collected and the theoretical liability – is around £42bn, of which £14.5bn comes from income tax, National Insurance and Capital Gains Tax, HM Revenue and Customs has reported.: The second year of estimating the tax gap, which HMRC reports is more thorough and detailed than last year’s, covers the tax year 2008/09.
Thu, 7 Oct 2010 • Read more
Belated 'sorry' as HMRC mistakes hit 10 million
Dave Hartnett, HMRC permanent secretary, responded to the news that 10 million people have paid incorrect levels of tax by initially refusing to apologise for the errors. Speaking to Radio 4, he said: ‘I’m not sure I see a need to apologise. I’ve read the papers, listened to the media and heard stories of HMRC blunders and IT failure – none are true.’: Later the following week, on giving evidence to the Treasury Select Committee, Hartnett said he regretted his ‘insensitivity’ in not recognising immediately that people affected deserved an apology. ‘I know how to apologise. I’ve had to do it before,’ he said. ‘I did not do it then, and I’m sorry for that.’
Thu, 7 Oct 2010 • Read more
Banker bonus tax collects £2.5bn more than expected
An estimated £3bn is expected to be received from the tax of banker’s bonuses – over £2bn more than forecasts from last year’s pre-Budget Report initially suggested.: Initial forecasts indicated the one-off bonus tax would raise £550m when introduced by the previous Labour Government.
Thu, 2 Sep 2010 • Read more
Planned reform of PAYE ‘will not save money’
The Government’s planned overhaul of the PAYE system ‘will not save money’, the institute of Payroll Professionals (IPP) has warned as it gathers feedback from members.: Head of policy Karen Thomson welcomed the planned switch to real-time information, shared between employers and HM Revenue & Customs.
Thu, 2 Sep 2010 • Read more
Illegal dividends and loans unexpectedly rise
An increase in the number of directors awarding themselves illegal dividend payments or loans from their company has risen ‘at an alarming rate’, according to a leading accountancy firm.: HMRC is so concerned at the number of company directors awarding themselves illegal dividends that they are asking insolvency practitioners to look into this. Keith Stevens partner of the accountancy firm Wilkins Kennedy and a licensed insolvency practitioner told Payroll World: ‘The Revenue is never slow in looking at ways it can recover tax.
Thu, 2 Sep 2010 • Read more
IT contractor wins IR35 tribunal appeal in 'borderline' case
An IT contractor has won an appeal against HMRC Commissioners on the interpretation of the controversial IR35 law governing employment status of individuals claiming self-employed status.: A tribunal decision last month ruled on the Novasoft case brought by Novak Brajkovic against HMRC. Between August 1998 and December 2002, Mr Brajkovic worked as a self-employed computer analyst/programmer with Avecia, under the name Novasoft, in a deal arranged through the agency Lorien.
Thu, 3 Jun 2010 • Read more
Increase to personal allowance next year
The Liberal Democrats and Conservatives plan to take significant numbers of taxpayers out of income tax from next year, but are constrained by the deficit from achieving a starting threshold of £10,000, as promised in the Liberal Democrat manifesto.: The parties, in their coalition agreement, stated: ‘We agree to announce in the first Budget a substantial increase in the personal allowance from April 2011, with the benefits focused on those with lower and middle incomes. We also agree to a longer term policy objective of further increasing the personal allowance to £10,000.’
Thu, 3 Jun 2010 • Read more
