Tax - Returns, forms & HMRC admin

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TAX CASES - 21.05.2024

Was incarceration reasonable excuse?

Herrmann v HMRC. Mr Herrmann (H) failed to disclose property income to HMRC. After an enquiry, assessments and penalties were raised for 14 tax years. H appealed, in particular raising an objection to a period of time covered when he was in prison, as he was prohibited from running a business. ...
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SELF-ASSESSMENT - 17.05.2024

HMRC excuses taxpayers from self-assessment

Letter from the Taxman. If your total employment and pension income is between £100,000 and £150,000, you have probably received a letter from HMRC telling you about its new rules regarding whether you need to submit a self-assessment tax return. No self-assessment needed. The letter says that you might not need to complete a tax return for 2023/24 if your last return showed that your only income was taxed through PAYE and was no more than £150,000. The previous threshold was £100,000. This exception doesn’t apply if there’s another reason which HMRC identifies as requiring self-assessment . HMRC has an online tool for checking this but in our view it’s flawed. You might owe tax or be due a refund, which if you followed HMRC’s advice could result in penalties or missing out on a refund. ...
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MTD for Income Tax Self-Assessment - what’s the latest?

In February 2024 important amendments to the Making Tax Digital for Income Tax Self-Assessment (MTD ITSA) rules became law. How will the changes affect your business when MTD ITSA becomes mandatory?
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ENQUIRIES - 17.05.2024

When is HMRC out of time to start a tax enquiry?

HMRC adopts a “process now, check later” system for self-assessment tax returns. That means it usually processes tax returns assuming they are correct but reserves the right to make enquiries. But how long does it have to do this?
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New guidance on penalties for volunteers

Making Tax Digital for Income Tax Self Assessment is still two years away, but some of your clients may have signed up early on a voluntary basis. HMRC has now published guidance regarding how these testers will be subject to penalties. What are the key points?
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PENALTIES - 30.04.2024

MTD ITSA - new penalty system can apply early

Points system. A new points-based system of financial penalties for late tax returns for all the main taxes was announced several years ago but so far it only applies to VAT returns. A positive aspect of the new system is that it allows anyone required to submit a tax return extra leeway before a penalty applies. The bad news is that the starting penalty amount is twice the current level, i.e. £200 instead of £100 (see The next step ). ...
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Tax - Returns, forms & HMRC admin

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New MTD trial launches soon

HMRC’s Making Tax Digital for Income Tax Self-Assessment (MTD ITSA) pilot has been a disaster. Despite this, it’s pushing businesses and accountants to use it from April 2024. Should you consider signing up?
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Penalties for not reporting a tax liability

The First-tier Tribunal (FTT) recently had to decide if HMRC was right to issue tax assessments and penalties because a taxpayer had provided inadequate information about her income. What practical advice can be learned from the FTT’s ruling?
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PAYROLL - 17.04.2024

PAYE procedures relaxed for salary advances

Simplification. Following a short consultation HMRC has gone ahead with simplification of PAYE procedures where an employer makes an advance of salary to an employee or director. New regulations became effective from 6 April 2024. Pay now, report later. Until the new regulations became law employers were required to treat a pay advance as a normal salary payment, which in turn meant reporting it to HMRC on a full payment submission (FPS). It’s now possible for employers to make a salary advance without submitting an FPS as long as the advance is not a regular arrangement, it reduces the next normal salary payment only and doesn’t exceed the value of salary accrued by the employee at the time of the advance. ...
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