Tax E-News Monthly Update - June 2010
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HMRC TOOLKITS This controversial new material on HMRC’s website aims to highlight what they call common errors which they see on tax returns. They cover several different aspects of the tax system, and are of limited use in many ways as most of the errors they refer to are hardly likely to be made by us on your behalf! Nevertheless we will be using the toolkits as part of our quality control process, and we will also consider mentioning that fact on your tax return whenever we feel that HMRC may otherwise query a particular entry. That should reduce the chances of an HMRC enquiry. The toolkits published cover the following topics, with more planned:
ACTION TO CONSIDER BEFORE THE EMERGENCY BUDGET The next Tax E-News will concentrate on developments from the Budget on 22 June. In the meantime you should consider creating a disposal before then of an asset standing at a gain in case CGT rates are increased in line with the Coalition Government agreement as follows: “We further agree to seek a detailed agreement on taxing non-business capital gains at rates similar or close to those applied to income, with generous exemptions for entrepreneurial business activities”. The same statement was included in the Queen’s Speech on the opening of Parliament, but with the word “closer” replacing “close”. Whether that subtle change has any significance remains to be seen! If you own a chargeable asset which stands at a gain, together we should consider the following - with particular attractions where you planned to sell the asset anyway later this year:
There a number of issues to take into account in making a decision to create a disposal before 22 June:
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ADVISORY FUEL RATES If you have a company car you can receive a tax-free payment from the company to cover fuel you have purchased for business use. The best and simplest option is to receive payment by way of a fixed amount per business mile. This is in accordance with HMRC tables which are reviewed every 6 months. The latest rates applying from 1 June 2010 are as follows, based on petrol at 119.9p per litre:
You can also use these rates for VAT purposes, so that the company can reclaim VAT of 7/47ths of the mileage rate which is VAT inclusive.
TIME TO PAY ARRANGEMENTS (TTP) These can be arranged as the core of HMRC’s Business Payment Support Service which to date has allowed businesses experiencing financial difficulties to spread tax payments in excess of £5 billion. It has been reported that some businesses have been told by HMRC staff that TTP arrangements are not available for PAYE liabilities. HMRC Head Office have made it clear this is not correct, so if you have experienced a problem with HMRC on this issue please tell us so we can put them right.
TAX REVIEW FORM 810 If you are lucky enough not to have to fill in a Self Assessment tax return every year, HMRC may still decide to check your income every so often to make sure you do not pay too much tax or too little tax. The form they use is a review form 810 which they may issue every three years - sometimes, more frequently. It has now become known that for the tax year to 5 April 2010 HMRC have not generated the bulk issue of the form 810, and this may be due to the fact that they report that only about half of the forms issued are actually completed. There is no penalty for not filling in the form itself, but of course if further tax is due there can be interest and penalties charged. On the other hand, many people will lose a tax refund which the completion of form 810 might otherwise generate. If you are not asked to complete a tax return but perhaps you pay tax under PAYE with some taxable benefits; and/or you pay charitable donations; and/or you have other sources of income, ask us to do a review in case the tax you paid at source in the tax year to 5 April 2010 is not the same as the tax actually due. |
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If you have any queries please contact Andy Farren at andy.farren@hboltd.co.uk
