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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MAKING TAX DIGITAL - 17.05.2024

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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MAKING TAX DIGITAL - 01.05.2024

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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MAKING TAX DIGITAL - 05.03.2024

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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INVESTIGATIONS - 03.04.2024

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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