On Saturday the BBC announced..
People who have filed late tax returns have been let off paying a £100 fine for missing the deadline, HM Revenue and Customs has confirmed.
steve@bicknells.net
Steve J Bicknell Tel 01202 025252
Helpful Comments on Tax and Finance – Bicknell Business Advisers Limited www.bicknells.net
On Saturday the BBC announced..
People who have filed late tax returns have been let off paying a £100 fine for missing the deadline, HM Revenue and Customs has confirmed.
steve@bicknells.net
On 2nd February 2015 HMRC launched HMRC Penalties: a Discussion Document
Closing date 11th May 2015.
HMRC state…
We don’t use penalties as a way of raising revenue, or to offset our running costs. In essence, we want compliance, not penalties.
Do you think HMRC penalties are fair? do they work? how could the system work better?
Why not use the discussion document to help HMRC to change the system and improve the way penalties are applied.
steve@bicknells.net
Since 2010 there have been 42 changes to tax law to close loop holes and deter tax avoidance.
Key changes were Accelerated Payments and High Risk Promoter Rules.
There is new consultation document out now ‘Strengthening sanctions for tax avoidance’ which runs till 12th March 2015.
A serial avoider may:
The new sanctions are expected to include:
Will this end the use of tax avoidance schemes?
steve@bicknells.net
THE TAX YIELD derived from HM Revenue & Customs investigations into the affairs of small- and medium-sized companies rose by 31% over the last 12 months, according to UHY Hacker Young.
Compliance investigations into SMEs generated £565m for HMRC in 2012/13, up from £434m in 2011/12, with the year ending March 31. Accountancy Age
Some investigations are random and some as a result of HMRC task forces, but many are triggered by risk profiling.
What can you do to reduce your chances of being selected:
1. File your tax returns on time and pay what you owe – If you file late or at the last minute HMRC will think you are disorganised and as such there are more likely to be errors in the return
2. Declare all your income – HMRC get details of bank interest and other sources of income, sometimes they test them and match them to returns
3. Use an accountant – Unrepresented taxpayers are more likely to be looked at, mainly because many of them don’t know what they are doing
4. Trends – if your business doesn’t match the profile of similar business in the same sector or your results suddenly fluctuate it could raise concerns at HMRC, for example, if you suddenly request a VAT refund
5. Tax Avoidance Schemes – if you are using a tax avoidance scheme I am sure HMRC will be looking closely, if they can find a way to challenge the scheme then at some point they will
steve@bicknells.net
If you don’t file your tax returns HMRC will assess the amount of tax due but it will probably not be the correct amount. So what can you do to correct the tax payable?
A person can claim overpayment relief to recover overpaid income tax, CGT, Class 4 NIC or corporation tax or to reduce an excessive assessment. A person can claim overpayment relief to recover overpaid bank payroll tax or to reduce an excessive assessment.
This includes amounts paid under a contract settlement.
This is an important ‘relief of last resort’ for taxpayers who have missed all other deadlines and face a tax bill from HMRC, where there is no statutory right to amend the actual legal liability because the relevant time limits have passed.
Special relief is intended as a final and exceptional remedy where it would be unconscionable for HMRC to pursue tax that is legally due. HMRC has a duty to both Parliament and taxpayers generally to collect the tax due under relevant tax law and to ensure the tax system is operated fairly. This means that HMRC cannot simply disregard the time limits for making a self-assessment if it appears that a determination might be excessive. There must be further circumstances which make it unconscionable to recover the full amount due under the determination or not to repay an amount already paid.
Such circumstances might be where a person
For a claim to special relief to be successful, it must, among other things, explain why the person considers that it would be unconscionable for HMRC to recover the full amount charged by a determination. Unconscionable means “completely unreasonable” or “unreasonably excessive”. SACM12240
HMRC may in their discretion mitigate any penalty, or stay or compound any proceedings for recovery thereof, and may also, after judgment, further mitigate or entirely remit the penalty. TMA70/S102.
Mitigation will be considered in three circumstances.
There is no appeal against HMRC’s decision on S102 mitigation and a taxpayer wishing to litigate would need to seek Judicial Review.
steve@bicknells.net