HM Revenue & Customs has announced that it will increase the tax-free amount that employers can pay to its employees for working from home - for "reimbursing sundry household expenses" from £3 per week to £4 per week from 6 April 2012.
Whilst higher amounts can be paid, this is the level which HMRC categorically states can be paid without any Income Tax or NIC cost, or any evidence/records required of the additional cost incurred by the employee.
From 6th April 2012 HMRC can collect unpaid self-assessment bills, personal PAYE underpayments and Tax Credit overpayments by taking it out of your salary. HMRC are allowed to do this where a tax bill is fully or partly unpaid and the amount owing is less than £3,000. This will be achieved by amending your PAYE code number for a complete tax year and so in effect will spread the payment of the bill over twelve months. But where the bill is in dispute, you can insist that the adjustment is removed.
Any interest on the unpaid amounts can’t be collected through your PAYE code. Instead HMRC will demand a direct payment.
The new collection method shouldn't be confused with the long-standing arrangement which allows you to spread a PAYE or self-assessment tax liability by adjusting your code. The new rule which comes into force in April only applies where a tax bill has become overdue.
The 31 October deadline for paper returns is only days away, HMRC is urging individuals and businesses to get their paper tax returns in on time, or face a penalty. New penalty regime was introduced this year and paper tax returns submitted on or after 1 November will now incur a £100 penalty – even if there is no tax to pay or the tax due are paid on time. The longer the delay, the more there will be to pay, as there are further late-filing penalties after three, six and twelve months as follows:
• an initial £100 fixed penalty, which will now apply even if there is no tax to pay, or if the tax due is paid on time;
• after three months, additional daily penalties of £10 per day, up to a maximum of £900;
• after six months, a further penalty of 5% of the tax due or £300, whichever is greater; and
• after 12 months, another 5% or £300 charge, whichever is greater. In serious cases, the penalty after 12 months can be up to 100% of the tax due.
So act now or... consider filing your return online. Filing Online has a number of advantages, such as later deadline – 31st January; you will get an immediate online acknowledgement and your return is processed faster, so any money owed to you is repaid more quickly.
HM Revenue & Customs launched its "Mortgage Verification Scheme" on 1 September.
HMRC hasn't publicised the launch of the Scheme through the normal channels there haven't been any Press Releases issued, or any announcements on its website. In fact the only useful reference to the "Income Verification Scheme" that could be found was one paragraph under their 2010 Budget Announcement Tax Gap, Evasion and Fraud.
“Colin Barclay, Assistant Director, HMRC Risk and Intelligence Service, said "HMRC are determined to tackle fraud wherever we can. The Mortgage Verification Scheme is an unprecedented opportunity for HMRC and lenders to work together to combat fraud in the mortgage industry."'
The Risk and Intelligence Service is the department that launched the Plumbers' Tax Safe Plan and the current VAT Campaign, and will be starting the campaigns for those who provide private tuition and coaching, and next year e-commerce trading.
HMRC has confirmed that mortgage lenders will be providing that department with the income details included in mortgage applications, and that "this information will naturally feed in to" their risk assessment processes.
Whilst mortgage lenders will understandably be concerned to ensure that lending is based on accurate income details, HMRC will of course be keen to investigate any apparent discrepancies between stated income levels for mortgage applications and those reported for tax purposes.
The Association of Residential Letting Agents (ARLA) has reported that three-quarters of agencies had more prospective tenants on their books than properties to let. Just two years ago only one in ten of agents had a surplus register of tenants. One reason for the surge in demand for rental properties is the difficulty that many people are experiencing in finding properties to buy.
Ian Potter of ARLA said: "Faced with this, many people are turning to rental homes as a more flexible option than buying.
"Yet our research highlights that the dearth of properties is just as real in the private rented sector and is showing no signs of improvement."
Government figures appear to substantiate the findings of the latest ARLA survey. According to data published by the Department of Communities and Local Government, over the past five years rental occupancies have climbed by 40 per cent, from 2.4 million in 2005 to 3.4 million in 2010
Last Updated on Friday, 15 July 2011 08:24
According to the new fiscal sustainability report from the Office for Budget Responsibility (OBR), the greater numbers of higher earners there are in the UK the better it is for the public purse.
Since the UK operates a progressive tax regime - the richer pay more than the poorer - the OBR said that every one per cent increase in the overall share of wages which goes to the top 5 per cent of earners means that the state benefits to the tune of £2.4 billion.
From 2000 to 2008, that top 5 per cent of earners saw their take of the wages available in the UK climb from 23.3 per cent to 26.4 per cent of the total. This produced an additional £7.2 billion in tax revenues.
The OBR report stated: "If the recent trend of increasing income inequality were to continue it would potentially drive an increase in personal tax receipts. Conversely, a reversal of income inequality would lead to a fall in revenues
Last Updated on Friday, 15 July 2011 08:25
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