Edwin Smith - Chartered Accountants
  • Home
  • About Edwin Smith
  • Accounting Services
  • Contact Edwin Smith

Old Bank Accounts of HMRC Are Closing

Posted by: edwinsmith on March 30th, 2010

All HM Revenue & Customs (HMRC) bank sort codes and account numbers changed during 2009 as HMRC moved its banking services to Citi and Royal Bank of Scotland Group from the Bank of England.

HMRC temporarily continued to accept payments made using the old Bank of England account details, however this will change during 2010 when the old accounts will be closed. If you’ve not yet set up your payments to go to the new accounts please do so now by reviewing the HMRC payment information.

If you pay by Bank Giro, please make sure you use one of the newly issued payslips including the new NatWest account details. If you only have payslips that contain HMRC's old Bank of England account details please contact the tax office that issued them to you and ask for replacements.

If you are paying HMRC by Direct Debit you don’t need to do anything. Your Direct Debit instruction remains active.

From 2010, if you make a payment using the old bank account numbers it may be returned. This could result in your payment reaching HMRC late, which in turn could lead to your being charged a late payment penalty, interest or surcharges.

Filed under: PAYE, Tax, VAT

End of Year Tax Planning

Posted by: edwinsmith on March 23rd, 2010

INCOME TAX

Whilst personal allowances, the basic rate of 20% and higher rate of 40% are not changing in 2010/11 there are changes for individuals with income over £100,000.  If your income is over £112,950 your personal allowance will be reduced to nil.  If your income is between £100,000 and £112,950 then your personal allowance will be restricted at the rate of £1 for every £2 of income above £100,000.

For individuals with income over £150,000 there is a new additional rate of tax of 50% for income other than dividend income and a new dividend additional rate of 42.5% (as opposed to 32.5%).

Any owner managed company whose shareholders may be facing the 50% rate of tax or a reduction in their personal allowance, may like to consider paying dividends prior to 6 April 2010 to take advantage of the current lower tax rates.  Similarly any business with employees earning similar levels of income may wish to consider bringing forward any bonus payments to the current tax year.

Married couples and civil partners should review their positions as an income balancing exercise may produce tax savings.

Owner managed businesses should consider their cash flow requirements as withdrawing capital and reinvesting it as a loan to give tax relief could be beneficial. Careful structuring is required so please contact us if you wish to discuss this.

CAPITAL GAINS TAX

The annual exempt amount for individuals for the current year is £10,100 and gains above this amount are taxed at 18% in the current year.  Have you used your annual exemption?  The exempt limit and rates for 2010/11 have not yet been set.

INHERITANCE TAX

The Inheritance Tax annual exemption still stands at £3,000 per individual and can be carried forward for one year only. If an individual has not made any gifts since 5 April 2008 then they have an allowance of £6,000 to use before 6 April 2010. For a married couple or civil partners who have made no gifts they have an exempt amount of £12,000 between them.

INDIVIDUAL SAVINGS ACCOUNTS (ISAs)

The amount savers aged 50 or over in the current tax year was increased to £10,200 this year.  Any saver born on or before 5 April 1960 can invest the full £10,200 in a stocks and shares ISA with one provider or up £5,100 can be saved in a cash ISA with one provider with the remainder being saved in  a stocks and shares ISA with either the same or another provider.  For savers who were born after 5 April 1960 the limit is £7,200 in a stocks and shares ISA with up to £3,600 being saved in a cash ISA.

From 6 April 2010 the higher limit of £10,200 applies to all savers with £5,100 maximum into a cash ISA.

Please contact us for your end of tax year planning advice to discuss your individual circumstances.

This blog news page is for general information only and is not intended to be advice to any specific person. You are recommended to seek competent professional advice before taking or refraining from taking any action on the basis of the contents of this web page.

Filed under: Tax

Maximising tax relief on pension contributions – Special Annual Allowance

Posted by: edwinsmith on March 8th, 2010

From 6 April 2011, higher rate tax relief on pension contributions will be restricted. In advance of this the government introduced anti forestalling rules to prevent individuals from making significant contributions now in order to take advantage of the higher rate tax relief prior to this date.

These measures apply to tax payers whose relevant income is in excess of £130,000 in any of the three tax years 2007/2008, 2008/2009 and 2009/2010. 

For these tax payers, higher rate tax relief on pension premiums in the current and following tax year will be limited to the special annual allowance which is set at £20,000 for most tax payers (up to £30,000 for some) unless those contributions were considered to be ‘regular’ contributions in place prior to 22 April 2009.

If your total pension contributions exceed £20,000 (or up to £30,000 if you are eligible for the increased limit), a tax charge will be levied on those contributions which are not classed as regular and will effectively reduce the rate of tax relief given on the excessive pension contributions to the basic rate of tax.

If you do fall within the measures to reduce the tax relief available, are considering increasing your pension contributions in the future, and do not currently utilise the maximum special annual allowance available to you, then you may wish to ensure that you maximise your relief prior to 5 April 2010 by making additional pension contributions up to the special annual allowance.

If your employer makes contributions into your pension, then you should contact us for additional advice.

There are too many rules to consider fully in this article but if you believe that your personal circumstances may fall within the above measures, then please contact us at Edwin Smith as we can assist with applying the rules to your individual circumstances.

Filed under: Tax

The Business Inspector sponsored by HMRC

Posted by: edwinsmith on March 5th, 2010

A new TV series called ‘The Business Inspector’ is sponsored by HM Revenue & Customs (HMRC). The programme will raise awareness among small businesses that they need to keep good records, maintain cashflow and market their business effectively.

The Business Inspector is a four part series that will be broadcast weekly on Five at 8pm from 17 March 2010 and is presented by Hilary Devey, an award winning entrepreneur and multimillionaire.

Hilary Devey visits eight small firms that are struggling to survive or grow and advises them on how to improve their businesses.

HMRC are hoping that the programme will help small businesses realise the benefits of taking better care of their records and paperwork such as improved cashflow.

In addition, HMRC have also launched a new fact sheets series called ‘Tax help’ that provide straightforward advice and information.  The first fact sheet deals with record keeping requirements.

Filed under: Tax

HMRC Phishing emails

Posted by: edwinsmith on March 1st, 2010

Following the deadline for submission of the self assessment tax returns, there is a new wave of HM Revenue & Customs (HMRC) phishing emails circulating.  These emails have the subject of ‘tax refund notification’ and are sent from ‘autorefund@hmrc.gov.uk’.

To the unsuspecting recipient, this email may appear genuine as it contains the HMRC logo and the Business Link and Directgov logos in the footer.  The email contains a link which asks you to click to submit your refund request which will take you to a fake website where you will be asked to complete further personal details which will then be captured and used by the fraudster.

There are plenty of other HMRC phishing emails which have been reported to HMRC and a full list can be viewed by clicking the link provided.  We have reported this current version to HMRC and so the list may be updated shortly.

For the avoidance of doubt, HMRC do not send tax refund notifications by email. If you do receive such an email and are concerned, or if you have already acted on such an email, please contact your normal adviser at Edwin Smith.

Filed under: Tax

Tax Amnesty for Doctors and Dentists

Posted by: edwinsmith on February 4th, 2010

HM Revenue & Customs (HMRC) has launched a Tax Health Plan (THP) to offer medical professionals the opportunity to disclose understated income. Since the initial release of the THP, further guidance has been provided by HMRC to state that dentists as well as GMC members are included within the THP.

Intention to notify must be made by 31 March 2010 and then, once registered, disclosure along with payment of tax, interest and penalties must be made by 30 June 2010.

Accountants are able to notify and disclose on behalf of their clients. To notify you will need your GMC registration number and National Insurance number.

HMRC will not calculate your tax, interest or penalties so you or your accountant will need to calculate this. The penalty, to include with your disclosure, is 10% of the underpaid taxes/duties and Class 4 National Insurance unless the unpaid liability is less than £1,000 where there will be no penalty. Interest will be calculated from the date the tax was due to the date of payment. Details of interest rates can be found on the HMRC website by clicking here.

HMRC has stated that they will “pursue those with undeclared tax liabilities who decide not to make a disclosure. In these cases the penalties could be up to 100% of the tax due and in exceptional circumstances criminal investigation may be considered”.

Click here to find out more information on the HMRC website. Alternatively, please contact us and we can assist you.

Filed under: HMRC campaigns, Tax

New Disclosure Opportunity (NDO) – tell the Revenue now

Posted by: admin on October 27th, 2009

HM Revenue & Customs (HMRC) is using its legal powers to obtain information about holders of offshore accounts from all UK banks and financial institutions.

There is, of course, nothing wrong with holding an offshore account or owning an offshore asset as long as you have paid any tax due on the capital invested and on any interest arising on the account or on any income received relating to the asset.

In 2007 HMRC operated the Offshore Disclosure Facility to give the offshore account holders with five major UK banks the opportunity to put their tax affairs in order. HMRC now want to encourage the customers of other financial institutions with unpaid tax and/or duties connected in any way to offshore accounts or assets to pay what they owe. HMRC are therefore introducing the New Disclosure Opportunity (NDO) to help them get their tax affairs up to date.

This is the final opportunity for customers with offshore accounts or assets. HMRC will not offer preferential terms to offshore account and asset holders in the future.

You must have notified before the 30 November 2009 to be able to go on and disclose.

At the end of the notification period, HMRC will target those with offshore bank accounts and undeclared tax liabilities who have chosen not to come forward to make a disclosure.

Filed under: HMRC campaigns, Tax
« Previous Page