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HM Revenue & Customs phishing emails

Posted by: edwinsmith on July 29th, 2011

HM Revenue & Customs (HMRC) is alerting taxpayers to a surge of fake ‘phishing’ emails sent out by fraudsters.

The email informs the recipient they are due a tax rebate, and provides a click-through link to a cloned replica of the HMRC website. The recipient is asked to provide their credit or debit card details. Fraudsters then try to take money from the account using the details provided. Victims risk having their bank accounts emptied and their personal details sold on to other organised criminal gangs.

HMRC have confirmed that currently they will only ever contact customers who are due a tax refund in writing by post. They don’t use telephone calls, emails or external companies in these circumstances. There is more security advice on the HMRC website.

If anyone receives an email claiming to be from HMRC, please send it to phishing@hmrc.gsi.gov.uk before deleting it permanently.

Other advice would be not to click on websites, links contained in suspicious emails or open attachments and follow advice from http://www.getsafeonline.co.uk/.

If you have reason to believe that you have been the victim of an email scam, report the matter to your bank/card issuer as soon as possible. If in doubt please check with HMRC at http://www.hmrc.gov.uk/security/fraud-attempts.htm.

Filed under: Tax

Real Time Information update

Posted by: edwinsmith on July 29th, 2011

HM Revenue & Customs (HMRC) has recently published a new page on their website called ‘Improving the operation of PAYE: Real Time Information (RTI)'. The page provides information on RTI and some FAQs from employers and software developers together with HMRC responses. HMRC will add to these over the coming months.

Also published is a page on technical information for software developers, which may be useful to some employers.

A pilot of the RTI service with volunteer software developers and employers will last for a year, starting in April 2012 to make sure it is thoroughly tested.

Our previous article on Real Time Information provides more detail about the system and the pilot.

HMRC’s plan is to ensure that all employers are using the RTI service by October 2013, with those who are not part of the pilot joining RTI in the period from April 2013 to October 2013.

Filed under: PAYE

HMRC extends ‘tax cheats’ campaign

Posted by: edwinsmith on July 29th, 2011

HMRC have announced a selection of new campaigns designed to target rule breakers and home in on tax evaders.

Over the next year HMRC will use cutting-edge tools such as “web robot” software to search the internet and pinpoint more accurately people who have failed to pay the right tax. The “web robot”, can also be used with the department’s Connect computer system, which collects third party data to uncover hidden relationships and anomalies in order to highlight people who are trading without telling HMRC.

HMRC have announced that they intend to operate a selection of campaigns in 2011/12 targeting the following areas:

  • Those trading over the £73,000 turnover limit without registering for VAT
  • Those who provide private tuition or coaching without declaring the income to HMRC
  • Business trading in E-market places (eBay etc) with out registering as a business with HMRC
  • An extension of the plumbers’ campaign will invite other tradespeople to declare underpaid tax

Previously, HMRC have operated campaigns targeting offshore investments, medical professionals and people working in the plumbing industry and have raised more than £500m from voluntary disclosures and a further £100m from follow-up activities.

Before designing and launching the campaigns, HMRC will seek input from interested parties.

If you think that you have not paid the correct amount of tax or would like advice regarding VAT registration please contact us.

Filed under: Tax, VAT

Payments to Ex Employees

Posted by: edwinsmith on July 13th, 2011

What has changed?

Previously, payments made to an employee who has already received their form P45 should have been made with the basic rate of tax (20%) deducted.

Following a change made by HM Revenue & Customs (HMRC) effective from 6 April 2011 payments made to ex employees should now be made using the D0 tax code on a month 1 basis – which deducts the appropriate rate of tax (20% / 40% / 50%) depending on the amount of the payment.

For national insurance, if the payment is a regular sum such as a final payment of salary, you should calculate the national insurance using the employee’s usual contribution letter and applying the rates and limits for the usual earnings period (e.g. weekly/monthly etc).  If the payment is an irregular sum such as accrued holiday pay or an unexpected/backdated bonus you should calculate the national insurance using the employee’s usual contribution letter and applying the rates and limits for the weekly earnings period in which the payment was made.

The employee should not be issued with another form P45 after this payment has been made.  You should instead provide the employee with documentary confirmation of the payment showing the following details:

  • the date of the payment(s)
  • the gross amount of each payment
  • the amount of PAYE deducted from each payment
  • confirmation that the payment is a post leaving payment.


This can be provided in the form of a letter or a payslip.

The additional payment will need to be reported to HMRC at the end of the payroll year via forms P14 and P35.

The effect of the change:

The change in tax code used to make payments to ex employees effectively means that for any payments over £12,500 the excess will be taxed at 50%, and could lead to overpayments of PAYE for those employees that receive a large payment in the month but did not breach the 50% tax bracket for the overall year.  Any under/overpayments of PAYE will be dealt with at the end of the tax year either via self assessment or by the employee contacting HMRC directly.

To avoid under/overpayments, the employer may wish to consider staggering the payments across more than one month, or ensuring that all payments due to the employee are made before the issue of form P45.

For more advice on this area or to discuss other payroll matters please contact us.

Filed under: PAYE