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Author Archives: DavidSmith

National Minimum Wage Increase

1st October is the date that everything nmw goes up. New rates are £6.50 for employees aged 21 and over, £5.13 for 18-20 year olds, £3.79 for under-18’s and £2.73 for apprentices (under 19 or over 18’s in the first year of apprenticeship).

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New Rules on Pensions Just Get Even Better

Announced yesterday, is the plan to remove the punitive taxation of pension funds passed on in a deceased’s estate. It is never a bad thing to spend all you have before you die, and the 55% tax charge on inherited pensions was an incentive to take it all while you’re alive. Now that this tax […]

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Employer Liable for Wrong Tax Code

If you are an employee, you might think that your tax code is important.  It is not.  It directs how much tax you should pay as you go through the year.  It has no bearing on your final tax bill. If you are an employer, you may think that an employee’s tax code is between […]

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Tribunal Restricts HMRC’s Right of Inspection

Any curb on HMRC powers of inspection has got to be worth a close look. The First Tier Tribunal has just ruled that it is unreasonable for HMRC to ask during a ‘business records check’ what the taxpayer does with her business takings at the end of the working day.  I quote from the transcript: “The […]

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Penalties Are There to be Overturned

I never just accept a penalty. Whenever I come across one, I always consider the merits of appealing. I have to say, the case I am about to introduce is one I would have said would fail. The Tribunal has just reduced to just £400 a penalty of £3,602 for late registration for VAT. Our hero […]

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Beware VAT on Property Sales

If you are in business, you will know that over a three month period, VAT can add up.  Rarely, however, is it a big issue on individual transactions. It will be a big issue when 20% of a very big number is still a big number. Property transactions can be very big numbers. A legal […]

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Don’t Panic! Employ Less Than 50 and You are off the Hook… for Now

HMRC have just announced that they are extending the run-in to rti filing penalties. They are still kicking in from 6th October to employers with 50+ staff, but the smaller of you can now relax until 6th March. Small crumb of comfort if you are small, yourself.  Not a lot of use if you employ 50 […]

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The Taxman Sets Out His Stall on Bank Compensation Payments

HMRC have spoken. They have set out how they expect victims of bank misselling of interest rate hedging products to declare the compensation payments as taxable income. They say that the refund of interest should be credited in the business accounts in the opposite way as to how the original interest costs were debited, and […]

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Your Chance to Have Your Say in the Next Budget

The date has been set for the Chancellor’s autumn statement as Wednesday 3rd December. The date has also been set for the closing deadline for all submissions as to what you’d like to see in that statement.  That date is 17th October. Get writing…  

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HMRC Scare Letters

Someone who works at HMRC (and who programmes the drivel that their computer spews out) has a lot to answer for. They are asking their computer to select people in receipt of child benefit and who have not paid the ‘high income child benefit charge’ (HICBC) despite having income > £50,000.  Those on the list are […]

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Suspend Your Penalties

Not very well publicised is the facility that HMRC have to suspend penalties for careless inaccuracies in returns. There is pleasing logic in this in that HMRC are allowed to let you off if you can get them to agree that you will change your behaviour over the suspension period and that will encourage you […]

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Appeal Your Tax Penalties

Once the dreaded penalty notice lands on your doormat, you’re in trouble. It can be anything.  A lot of penalties are £100.  You can add any number of zeroes onto that.  It is only in VAT that penalties must be proportionate to the offence. You may not want to go to too much trouble if […]

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Avoid Your Tax Penalties

Yesterday was all about understanding your tax penalty regime. Today, I want to encourage tax compliance as a valuable tool of keeping you on the right side of HMRC. Being behind with your tax can cost you your gross payment status for CIS, your chances of securing bank finance, your chances of securing a government […]

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Know Your Tax Penalties

Every taxpayer should look at the taxes they are liable for and research the penalties for late filing and late payment. When you have worked out the scale of the penalties that you might face, you can work out the importance of compliance. Many might be surprised that late payment of corporation tax attracts just […]

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Are You on the List?

Today’s tip is to check the list. The list is the one published by HMRC of ‘deliberate tax defaulters’. I’ve already been on it.  No.  Let me rephrase that.  I’ve already checked it. Happy to say they’ve not got me, yet. Can’t be so sure about you, though. I’d have a look if I were […]

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HMRC Will Sub You Maternity, Paternity and Adoption Pay

Now that you can’t reclaim statutory sick pay, it is warming to remember that not only is statutory maternity, paternity and adoption pay repayable by the government, they will offer funding of your payments to employees if you are unable to reclaim until after the tax year-end.

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Sales Psychology

Some are born to sell, others are born to sit behind a computer and crunch numbers. Whatever your natural gifts, there are still some sales rules that are worth trying to remember. Your prospects need to feel wanted before they can become your customer.  Don’t be afraid of showing people how much you want them to […]

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HMRC One Step Away From Locking Up 2nd Home(abroad)owners?

The Treasury has just released a document for consultation, outlining its intention to legislate to make tax evasion a strict liability criminal offence where it arises from offshore income and gains. Now, I am no lawyer and you will have to read the thing yourselves, but my understanding is that in order to send someone to prison for […]

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Landlords Beware The Taxman Has Eyes Everywhere

HMRC have been firing plenty of warning shots across the bow of landlords who may or may not be choosing to be less than complete in their declaration of rental income. It is now thought that they are using sch 23 FA 2011 to serve information notices on letting agents.  Such a notice obliges the […]

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The Employment Allowance and IR35

If you are unlucky enough to be caught by IR35, you need all the tax breaks you can get. Before you reach the end of the 2014/15 tax year, you need to be aware that the £2,000 employment allowance does not count for the deemed payment. You should, instead, make sure that you actually pay […]

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The SSAS – Best in Show For Wealth Protection

Whenever your thoughts drift towards pensions, if you have a company you should be looking at a small self administered scheme (SSAS). Not only do they offer great flexibility and control, they also cannot be touched by any liquidator of your company or trustee of your bankruptcy. Indeed, this is the only pension that bankruptcy […]

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HMRC Remind Us of the Value of Pension Contributions

Rather than read these posts, you could just follow HMRC’s website. Yesterday, they published an article on what they call ‘adjusted net income’.  This is the measure they use in assessing whether your income trips over one of their tax traps.  The traps they refer to in the article are those above £27k for the […]

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How to Get Rid of the Taxman

I learned something new the other day. I answered the phone to the taxman, and told him I was driving. I was told they are not allowed to talk to us while we’re driving. So, if you ever answer the phone to them and wish you hadn’t, you have a get-out by suggesting that you’re […]

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Computers Aren’t All Bad

HMRC have published a guide to what data needs to be reported under real time information (rti).  I think it qualifies as a comprehensive guide. If you’re thinking ill of your computer, just read that article and imagine where we’d all be without software.  If you think you work only to pay your employees and the taxman, […]

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Taxation Magazine Petition Against HMRC Raiding Your Bank Account

The facility for HMRC to dip into your bank account and take what tax you owe them without you consenting has attracted plenty of publicity. It has now attracted an e-petition. If you feel strongly enough to want to stop it from becoming law, then now is your chance.  Add your name and make a […]

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Feel Free to Blame Your Accountant

It is a well-trodden path to overturning HMRC penalties to point the finger of blame at others in order to satisfy the conditions that give you a ‘reasonable excuse’. It is also with precedent that your pleas of innocence will be looked on more favourably if you took professional advice on the matter.  The fact […]

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Tribunal Rules That If You Are Struggling With Your Tax Return, You Need to Get it in as Best You Can

A recent case before the First Tier Tribunal denied a taxpayer’s appeal against a late filing penalty under self assessment. The taxpayer was claiming that delays on the part of HMRC led to him missing the filing deadline. I extract word for word from the ruling: “We understand that Mr Figg wanted to discuss the […]

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The Adjudicator Speaks

Most of my tips are about tax, and this one is no different.  However, even if you find nothing of interest in what I have to say, I recommend you read the Adjudicator’s Office’s Annual Report 2014.  It is very well-written and a jolly good read. I quote directly: “this year 90% of HMRC customer […]

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Important Lesson to Learn – HMRC Are Evil Bastards

I always knew this to be true, and following ridiculous cases that HMRC take to court reinforces my opinion on a fairly regular basis. They have just won a case at First Tier Tribunal against a taxpayer who missed paying his tax whilst suffering from a terminal brain tumour. Unable to work because of his […]

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Tax Credits Renewal Deadline Extension

If you are panicking about the 31st July deadline for submitting your tax credits renewal, then don’t. HMRC have announced a 7-day extension.  They are usually pretty good at extending deadlines when stuff happens that will affect our ability to get returns in.  This time around, there is a strike going on. Usually, trade unions […]

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Don’t Take a Teenager on Holiday

I am not going to mention names.  I want to protect the innocent. If you have young children, enjoy every holiday you can before hormones hit. I was naïve enough to think we might have nice family holidays until maybe the age of 16.  The cut-off point I now find to be 14. At least […]

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Don’t Go On Holiday

It’s just too much stress trying to get everything done so that you can go away. As a drinker and a wannabe smoker, I am a big advocate of avoiding stress as a key to a longer and healthier life. The amount of stress holidays cause before you go away has to cause more harm than […]

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Early Years Loss Relief

With an ever growing trend to self-employment, there should be plenty use of the capacity to carry back for three years losses incurred in the first four years of business. This is an often overlooked relief which has a significant chance of becoming relevant when many businesses struggle to make profit in their early years.  This […]

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One More Cost That You Really Don’t Need

Anything that drives down the profit of your business but affords no tax relief is at best a sad waste and at worst a pernicious evil. Accounting standards and company law dictate that you must depreciate assets, but don’t tell you at what rate. As depreciation only does harm, make sure that you take steps […]

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Quote From HMRC Annual Report

“HMRC reported compliance yield (the additional revenue it generates through its compliance activities) of £23.9 billion in 2013-14 – its highest yield to date. The Department has improved its measurement of compliance yield since 2010-11. However, in response to the NAO’s review, HMRC found that, when it agreed performance targets with the Treasury for the […]

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Retrospective Claims for Employer NIC’s Holiday

The Tories’ sop to the ‘tax on jobs’ was to exempt new businesses from employers NICs.  The first year’s bill (subject to a maximum of £5,000) on the first 10 employees was not payable. This came in in 2010 and finished on the 5th September 2013. HMRC yesterday published a guide to retrospective claims which gives […]

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Are You On The List?

Today’s tip is to check the list. The list is of ‘deliberate tax defaulters’, and you can find it on HMRC’s website. Always worth checking to see if you’re featured. It’s quite a long list this time, as well. Amongst those on the list this time around is a company engaged in the “supply of […]

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Another Decision on Proportionality of VAT Penalties

This is a tricky one for me. By nature, I like to be able to take a side.  I love sport not for the beauty of the game, but for the partisanship that it allows. In business, I kind of thought that any victory against HMRC was sweet.  They are, after all, robbing bastards of […]

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Go On, Be A Consultant

HMRC have just announced the conclusion of their consultation into allowing certain groups to be exempt from filing online for VAT. This whole issue has had my attention ever since it first emerged as a tax tribunal slapped HMRC down for their insistence that everyone should have to file online.  This was a victory for the […]

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HMRC Promise Better CIS Repayment System

There is little about the Construction Industry Scheme that is well designed.  The repayment facility has been a problem for many years, with companies waiting too long to be given their own money back. Under pressure from stakeholders and politicians, HMRC have said they will do better with company repayments. They say they are going […]

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