Archives for February 2012

For VAT Return periods starting on or after 1 April 2012 all VAT registered individuals and organisations will have to submit their VAT Returns online and pay any VAT due electronically. 

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During the last three months HMRC has helped to close down 185 websites that are purporting to hand out tax refunds to taxpayers.

Individuals receive an email and are requested to part with personal details of their bank or credit card accounts to facilitate the supposed tax refund.

HMRC will only ever contact you about these matters by post. Currently they do not use telephone calls, emails or external companies.

You can check the advice published at www.hmrc.gov.uk/security/index.htm to see if the email you have received is listed. If you do receive a suspicious email:

1. Forward email to HMRC at [email protected] and then delete it from your hard drive.
2. Do not click on any website addresses, attachments or other links in the email.
3. Follow advice from www.getsafeonline.co.uk.
4. If you have inadvertently provided details of your bank or credit card accounts call your bank or card provider immediately.

Late filing:

Many individuals who are late in filing their 2011 self-assessment return may not realise that they will suffer late filing penalties even if they owe no tax for 2010-11.

And the days of a single £100 fine are long gone. The new fines are:

• One day late an initial penalty of £100
• Three months late a daily penalty of £10 per day up to a maximum of £900
• Six months late an additional £300 or 5% of any tax outstanding, whichever is the higher amount
• One year late a further £300 or 5% of any tax outstanding, whichever is the higher amount

As you can see the minimum penalty for filing 6 months late is £1,300 even if all your tax due is paid on time or you are due a tax repayment.

Late payment:

If you are late in settling your self-assessment liabilities a penalty calculated as 5% of tax unpaid at 30 days, 6 months and 12 months will be added to your debt. Additionally interest will be due until the debt is cleared.

Do the following criteria apply to you? If so you might like to read this article…

• Do you make payments into your own or your employer’s pension scheme?
• Do you pay higher rate tax, 40% or 50%?
• Have you omitted to claim higher rate tax relief on the contributions you have made?

If your answer to these questions is Yes, or Yes and No, then you may be one of the estimated 425,000 UK tax payers that are failing to claim higher rate relief on workplace pension contributions.

You may for instance assume that your payroll department are dealing with this for you. Or, that the Government automatically channels any refunds due into your pension pot. This is often not so.

If you pay ‘net’ contributions the tax office will top-up your fund for the standard rate tax paid of 20%. The remaining 20% tax relief, (if you pay tax at 40%) or 30%, (if you pay tax at 50%) has to be claimed from HMRC direct.

Which pension schemes are affected?

Most money purchase pension arrangements are affected, including:

• Personal pension plans (including Self Invested Personal Pensions – SIPPS)
• Workplace ‘contract based schemes’ including group personal pensions, group stakeholder schemes and group SIPPS.

The following schemes are not affected:

• All final salary schemes.
• Money purchase schemes that operate through a salary sacrifice arrangement in which case pension contributions are made before tax is deducted.
• Schemes where contributions are deducted from taxable pay.

If you are not sure what sort of pension you have check with your pension provider or employer.

How do I make a claim?

You need to make a claim in writing to HMRC as soon as possible. Claims can be backdated for up to four years. We would, of course, be delighted to do this for you. You will need to provide details of the gross and net contributions you have made in the period of your claim