Blog

Types of HMRC enquiries

HMRC can enquire into any statutory return (or amendment of that return) or statutory claim to check if the return / claim has been prepared correctly or if further information is required. HMRC’s internal manuals state that there is no statutory definition of an enquiry, so it carries its normal dictionary meaning of `seeking information, asking, questioning’. In practice the nature and extent of enquiries will vary considerably. HMRC has historically referred to ‘full enquiries’ covering a tax return as a whole, and ‘aspect enquiries’...

Read More

Correcting errors in VAT returns

Where an error on a past VAT return is uncovered businesses have a duty to correct the error as soon as possible. As a general rule, any necessary adjustment can be made on a current VAT return. To do this, the errors must be below the reporting threshold. Under the reporting threshold rule, businesses can make an adjustment on their next VAT return if the net value of the errors is £10,000 or less. The threshold is further increased if the net value of errors found on previous returns is between £10,000 and £50,000 but does not exceed 1% of...

Read More

Interest on children’s savings

All children in the UK have their own personal allowance, currently £12,570. There are special rules if a parent gifts significant amounts of money to their children which results in them receiving bank interest of more than £100 (before tax) annually. If this is the case, the parent is liable to pay tax on all the interest if it is above their own Personal Savings Allowance (PSA). These anti-avoidance laws are designed to prevent a child’s personal allowance being used by parents of children aged under 18, with some minimal exceptions. The...

Read More

Non-resident UK property sales

There are specials rules that apply to UK property sales by non-residents. Since 6 April 2020 non-residents have needed to report and pay any non-resident Capital Gains Tax (CGT) due if they have sold or disposed of: residential UK property or land (land for these purposes also includes any buildings on the land); non-residential UK property or land; mixed use UK property or land; or rights to assets that derive at least 75% of their value from UK land (indirect disposals). A CGT charge on the sale of UK residential property by non-UK...

Read More

Self-assessment payments on account

Self-assessment taxpayers are usually required to pay their income tax liabilities in three instalments each year. The first two payments on account are due on 31 January during the tax year and 31 July following the tax year end date. These payments on account are based on 50% each of the previous year’s net income tax liability. In addition, the third (or only) payment of tax will be due on 31 January following the end of the tax year. If you think that your income for the next tax year will be lower than the previous tax year, you can apply...

Read More

Multiple Dwellings Relief for SDLT

It was announced as part of the Spring Budget 2023 that Multiple Dwellings Relief (MDR) was being abolished. This change has now come into effect for transactions which complete, or substantially perform on or after 1 June 2024. The MDR relief applied to property purchasers who bought more than one dwelling where a transaction or a number of linked transactions included freehold or leasehold interests in more than one dwelling. This was a valuable tax relief that could substantially reduce the amount of SDLT due. The government’s view was that...

Read More

New Brooms

As time passes during the present election campaign, its seems more likely that we may have a change of government from the 5 July. Labour have disclosed a number of tax changes they would introduce. To summarise they are: Private school fees will attract VAT at 20% which private schools will no doubt pass on to parents. The Labour Party has also said it will also end business rates relief for private schools. The £1.7bn raised by this move will be used to improve local authority schools. There may be changes to the taxation of Non-Doms to...

Read More

Falling inflation – what does it mean for you?

The following notes are reproduced from a Treasury statement issued 21 May 2024. Lower inflation supports people by maintaining the purchasing power of their money. If prices only rise slowly, people can plan their budgets more effectively - encouraging spending and investment, which fuels the economy. Lower inflation also helps businesses grow by providing a stable, predictable environment for them to operate in - allowing for more job opportunities or the ability to research new products and services. Finally, low inflation enhances the...

Read More

Tax Diary July/August 2024

1 July 2024 - Due date for corporation tax due for the year ended 30 September 2023. 6 July 2024 - Complete and submit forms P11D return of benefits and expenses and P11D(b) return of Class 1A NICs. 19 July 2024 - Pay Class 1A NICs (by the 22 July 2024 if paid electronically). 19 July 2024 - PAYE and NIC deductions due for month ended 5 July 2024. (If you pay your tax electronically the due date is 22 July 2024). 19 July 2024 - Filing deadline for the CIS300 monthly return for the month ended 5 July 2024. 19 July 2024 - CIS tax deducted...

Read More

Filing your tax return early

The 2023-24 tax year ended on 5 April 2024 and the new 2024-25 tax year started on 6 April 2024. Most taxpayers will be happy to leave dealing with their 2023-24 tax returns until later this year or even until January 2025. The 31 January 2025 is not just the final date for submission of the 2023-24 self-assessment tax return but also an important date for payment of tax due. This is the final payment deadline for any remaining tax due for the 2023-24 tax year. In addition, the 31 January 2025 is also the usual payment date for any Capital...

Read More