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The Plumbers Tax Safe Plan – A new disclosure opportunity for those in the plumbing industry

Posted by: edwinsmith on March 8th, 2011

HM Revenue and Customs (HMRC) have recently announced The Plumbers Tax Safe Plan (PTSP) which is designed for people working within the plumbing industry who have not told HMRC about all their income in the past and who now want to get back on track. It is intended to cover people who work (or worked) in the plumbing, heating or gas installation trades and this includes anyone who installs and repairs pipes and fixtures for water, drainage or gas systems in a building.

HMRC has obtained information from Gas Safe and Corgi registers and compared it to various directories and databases to build up their own database to help it identify people who, it believes, are under-declaring their income.

If you have under-declared your income in the past or have not even registered with HMRC then it is likely that you will not have paid the right amount of tax and it is important that you rectify this now.

If you take advantage of the PTSP you can tell HMRC about any income that you haven't previously told them about and you will pay a lower penalty. Depending upon your circumstances you may also be able to spread your payments if you find that you can't afford to pay what you owe.

To take advantage of the PTSP you must:

  1. Notify HMRC by 31 May 2011 of your intention to take part in the PTSP. This is a simple process and can be done online, by phone or by post. At this stage, HMRC only need to know that you will make a disclosure. If you fail to notify you will not be able to make a disclosure under this PTSP.
  2. Once you have done this you will receive your disclosure reference number and then you must make your disclosure and pay HMRC what you owe by 31 August 2011 or at any time before then.

You can make your disclosure in one of two ways:

  1. online by completing the Plumbers Tax Safe Plan disclosure form
  2. by completing and posting a disclosure form

For more detailed information see the Plumbers Tax Safe Plan Guidance Pack.

These terms will not be available to people who choose not to sign up for PTSP if later HMRC find that they are behind with their tax affairs.

HMRC will look at all disclosures to see whether they think they are complete and accurate. HMRC expect that they will accept most disclosures. If they accept your disclosure, they will send you a letter confirming this. If they cannot accept your disclosure for any reason, they will contact you (or your adviser, if you have one), to let you know.

If you are not a plumber, you may still find that the forms cover everything you need to tell HMRC. If that is the case, you can still use PTSP forms. You should notify and disclose following the instructions in this guidance. Please ensure that you show your correct business or trade on the forms, making clear that you are not a plumber. If you don't provide this information your disclosure could be sent back for completion.

If you are not a plumber, and you do not want to use the PTSP forms, you should send details of your disclosure to the following address:

HMRC
Local Compliance
Parkway House
49 Baddow Road
Chelmsford
Essex
CM2 0XA

Customers who voluntarily come forward and put right their tax position can expect very similar terms to those on offer through PTSP. If you do not come forward and HMRC later find that you owe additional tax, you may face higher penalties or even criminal investigation.

If you believe that you may be affected by this, then it is important that you act now. Please contact us if you need any further information, assistance or advice.

Filed under: HMRC campaigns, Tax

Revised Advisory Fuel Rates – 1 March 2011

Posted by: edwinsmith on February 28th, 2011

H.M. Revenue and Customs (HMRC) have published the latest advisory fuel rates relating to mileage payments for business travel in company cars. These are as follows: 

Engine size Petrol Diesel LPG
1400cc or less 14p 13p 10p
1401cc to 2000cc 16p 13p 12p
Over 2000cc 23p 16p 17p

The new rates will be effective from 1 March 2011, however for the first month employers may continue to use the previously published rates if they choose to.

These rates will be reviewed again shortly and any changes made will be effective from 1 June 2011.  The revised fuel rates will be published on the fuel rates page on the HMRC website when they are released.

Advisory fuel rates can be used to calculate the following:

  • Reimbursement to employees of fuel used for business travel in a company car
  • Repayment by employees of fuel used for personal travel in a company car
  • Allowable input VAT on business mileage claims

A more detailed explanation of the use of these rates is on the HMRC website.

The rates applying for earlier periods are also on the HMRC website.

If you have any questions regarding the use of advisory fuel rates or mileage payments please contact us.

Filed under: PAYE, Tax, VAT

Any ideas for the Budget?

Posted by: edwinsmith on February 25th, 2011

Chancellor George Osborne is calling on the British public for ideas on how to kick-start economic growth with the launch of an online Budget idea portal.

The portal will allow members of the public, interest groups and representative bodies to send their suggestions of what they would like to see in next month's Budget.

The Budget takes place on 23 March.

Filed under: PAYE, Tax, VAT

Changes to tax relief on pension savings from 6 April 2011

Posted by: edwinsmith on February 22nd, 2011

From 6 April 2011 the rules have changed on tax relief on pension savings. The annual allowance, which is the maximum amount of pension saving that benefits from tax relief each year, becomes £50,000 (£40,000 net of basic rate tax). Pension savings in excess of this amount will be subject to a tax charge (the annual allowance charge) which will be collected via self assessment and in effect removes tax relief on this excess.

Even though pension savings may be more than £50,000 for a tax year, the charge may be reduced or not apply at all if your pension savings were less than that for earlier years. You can carry forward unused allowances from the three previous tax years to reduce the amount of tax due for a year. There is a strict order in which you use up your annual allowance. You use the current tax year annual allowance first, then use your unused annual allowance from earlier years, using the earliest tax year first. You must have been a member of a registered pension scheme to have an unused annual allowance to carry forward from an earlier year. If you have been a member of a registered pension scheme but, in one particular year, have not made pension savings for that year then you can carry forward an annual allowance of £50,000 from that year. If however, you have not been saving in a registered pension scheme then you will not have unused annual allowance to carry forward from that year.

Your pension savings in a tax year is the total of the increase in value for each scheme of which you are a member.

For personal pensions, the increase in value is the amount you have contributed in the period, grossed up to cover the basic rate tax added by HM Revenue & Customs (HMRC), for example if you pay £500 a month into a personal pension, this is grossed up to £625 a month and your pension savings for that scheme will be £7,500.

For workplace pension schemes, the value of contributions made by your employer is also included in your pension savings. Where the scheme is a money purchase/defined contribution scheme, the increase in value for the period is the gross amount you have contributed out of your pay together with amounts contributed by your employer. For defined benefits schemes, the amount of your pension savings is the increase in the value of your promised benefits over the pension input period ending in the tax year. The valuation is based on a notional ‘capital ‘ value broadly based on 16 times the amount of annual pension achieved to date and any additional separate lump sum . Your pension scheme administrator will be able to provide you with a pension savings statement if you think your savings will be over the £50,000 allowance.

For further advice, please contact us.

Filed under: Tax

Tax Treatment on Cars in Business

Posted by: edwinsmith on February 17th, 2011

Capital Allowances on Cars Acquired by the Business*

*this includes cars acquired on hire purchase

Capital allowances are available on cars purchased by the business on or after 1 April 2009 for Corporation Tax and on or after 6 April 2009 for Income Tax at the following rates which are dependent on the cars CO2 emissions. 

  • 110g/km or less – 100% first year allowance

 

  • 111g/km – 160 g/km -20% writing down allowance per annum on expenditure incurred which is allocated to the main pool

 

  • 161g/km or more – 10% writing down allowance per annum on expenditure incurred which is allocated to a special rate pool

Where expenditure on a car is allocated to either the main pool or special rate pool (where there is no non-business use of the car), there will be no balancing adjustment when the car is sold, or otherwise disposed of, unless the business is ceasing e.g. any allowances still available after deducting the disposal proceeds will continue to be written down each year at the applicable rate. There will only be a balancing adjustment on the disposal of a car when the car is in a single asset pool.

Cars purchased before 1/6 April 2009 continue to be treated under the old rule for a transitional period of 5 Years. This means that cars costing: 

  • less than £12,000 continue to be handled on the main rate pool (20% capital allowance) regardless of their emission

 

  • £12,000 or more continue to be pooled in a single asset pool with a 20% capital allowance capped at £3,000 per annum.

 

The transitional period will end on the last day of the business first chargeable period to end on or after 31 March 2014 for corporation tax and after 5 April 2014 for income tax.

Car Leasing Disallowance

For contract leased (contract hire) cars there is no restriction on the tax deductibility of the car leasing costs if CO2 emissions are 160g/km or less.

For cars with CO2 emissions over 160g/km there is a flat rate disallowance of 15% of the car leasing costs for tax purposes.

Cars Acquired by Finance Lease

The difference between hire purchase and finance lease is determined by certain tests that include whether the lessee or lessor has control of the risks and rewards of the car, how the payments are structured and by the amount of the lease payments compared to the value of the car.

We can provide advice if you should require any help to determine what type agreement you have.

Finance lease cars are depreciated over the term of the lease. Then the finance lease interest element of the payments and the depreciation are treated as allowable for tax purposes.

Please contact us if you require any assistance.

Filed under: Tax

BillPay Website Address Changes

Posted by: edwinsmith on January 13th, 2011

The web address for paying tax to HMRC over the internet with a debit or credit card has changed from 20 December 2010 to www.santanderbillpayment.co.uk/hmrc.
This applies to the following taxes:

  • self assessment;
  • PAYE/Class 1 National Insurance;
  • VAT;
  • stamp duty land tax;
  • corporation tax; and
  • miscellaneous payments.
Filed under: PAYE, Tax, VAT

Self Employed Class 2 National Insurance Contributions – Changes To Payment Dates

Posted by: edwinsmith on December 21st, 2010

From April 2011 the payment dates for Class 2 NIC will change.

These contributions for the self employed will be paid at the same time as the self assessment tax payments are made, being 31 January and 31 July. Those paying by a monthly Direct Debit can still continue on this basis (see below for transitional changes in first year).

Payments by Direct Debit

Those currently making payments by monthly Direct Debit will have collection delayed to meet the new due dates and to bring the payment dates into line. This will mean the following.

  • for the first year only, monthly Direct Debits will stop for a short period and then start again
  • Class 2 contributions due for April 2011 will be requested from your bank in August 2011
  • payments thereafter will be monthly unless you choose to pay 6 monthly from April 2011 (see below)

A new option to pay by 6 monthly Direct Debit, collected in January and July each year, will be available from April 2011 for those who do not wish to spread their payments

Payments made by internet/telephone banking, CHAPS, Bank Giro, Post Office or post

You will receive just two payment requests from HM Revenue & Customs (HMRC) in the year, in October and April (instead of four bills), showing payments due by 31 January and 31 July respectively. You do not need to wait until the due date to make payment.

HMRC will be issuing detailed information to those affected by the changes via a series of special mail shots in the coming weeks.

Please contact us for further information.

Filed under: Tax

December Online Tax Return Registration

Posted by: edwinsmith on December 17th, 2010

Self Assessment taxpayers are being advised by HMRC to register now to be able to send their 2009/10 tax return online before the 31 January 2011 deadline.

Any outstanding 2009/10 Self Assessment returns must now be completed online as the 31 October paper-filing deadline has passed.

If you’re completing your return online for the first time, you’ll first need to register for online filing. You’ll immediately get a User ID, and an Activation Code will be posted to you. Once you’ve activated your account, you can complete your tax return online.

HMRC are advising that it’s important to register as early as possible as it can take up to seven working days to receive your Activation Code and January is normally very busy.

The alternative is to appoint an accountant to complete your tax return as most will have software that can file tax returns online.

Please contact us for more information.

Filed under: Tax

Tax credit renewal reminders for those that provided estimates

Posted by: edwinsmith on December 8th, 2010

Tax credit claimants who renewed at 31 July 2010 using estimated figures should give HMRC final 2009/10 figures by 31 January 2011.  This particularly applies to the self employed tax credit claimants who may not have known their final 2009/10 profit figure at 31 July 2010.

HMRC is writing to those likely to be affected.

If the final figures are lower than the estimate, claimants are likely to have a tax credit underpayment for 2009/10 and they could be entitled to a higher award in the current year. However, failing to provide the correct details could lead to an overpayment and supplying incorrect information could even lead to a penalty.

 Please contact us if you have any questions.

Filed under: Tax

Revised Advisory Fuel Rates – 1 December 2010

Posted by: edwinsmith on November 30th, 2010

H.M. Revenue and Customs (HMRC) have published the latest advisory fuel rates relating to mileage payments for business travel in company cars. These are as follows: 

Engine size Petrol Diesel LPG
1400cc or less 13p 12p 9p
1401cc to 2000cc 15p 12p 10p
Over 2000cc 21p 15p 15p

The new rates will be effective from 1 December 2010, however for the first month employers may continue to use the previously published rates if they choose to.

These rates will be reviewed again next year and any changes made will be effective from 1 June 2011.  The revised fuel rates will be published on the fuel rates page on the HMRC website when they are released.

Advisory fuel rates can be used to calculate the following:

  • Reimbursement to employees of fuel used for business travel in a company car
  • Repayment by employees of fuel used for personal travel in a company car
  • Allowable input VAT on business mileage claims

A more detailed explanation of the use of these rates is on the HMRC website.

The rates applying for earlier periods are also on the HMRC website.

If you have any questions regarding the use of advisory fuel rates or mileage payments please contact us.

Filed under: PAYE, Tax, VAT
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