Archive for Accountancy blog

Tax penalties of £1,200 sent out by HMRC

About 500,000 people are being sent notices of penalties of at least £1,200 for failing to submit their self-assessment tax returns. The HM Revenue and Customs (HMRC) penalty is made up of £900 in daily fines alongside a late-filing penalty of £300 or 5% of the tax due.

Some penalties might be waived on proof of a reasonable excuse, such as a family illness, but anyone receiving a penalty needs to communicate with HMRC regarding the problems they are facing and make arrangements to complete their tax return.

 

The deadline for online returns this year was 2 February, while paper returns would need to have been submitted by the end of the previous October. “We want the returns, not the penalties, this year half a million more people have filed their return – which means we are issuing 44% fewer penalties,” HMRC said. “But despite several reminders, nearly 6% of people have not sent their 2010/11 tax returns to us and they will be getting a penalty. We recognise that there will be some people within this group who do not need to be in self-assessment, and we will be happy to remove them from the system and cancel their penalty.”

 

The penalties being issued over the next few weeks are in addition to £100 late-filing penalties for missing the deadline, which was sent out in late February and early March.

 

If you do not have a reasonable excuse, these fines are non-refundable even where there is no tax to pay. It’s now very expensive to be late with filing your tax return.

 

 

 

Usain Bolt and UK tax

Usain Bolt fans will not see the Olympic champion in action again in the UK unless the tax laws are changed, the sprinter has warned. Bolt has said he will not compete in this country because he objects to a law that sees him taxed on global sponsorship and endorsement earnings as well as paying the 50% higher earning rate on any winnings and appearance fees.

The Jamaican runner had not raced in the UK for three years prior to this year’s Olympics, when he won gold medals in the 100m, 200m and 4x100m relay. He only agreed to run in London after HMRC announced a tax amnesty for competitors. Bolt said: ‘As soon as the law changes I’ll be here all the time. I love being here, I have so many Jamaican fans here and it’s wonderful.’

 

In 2010 Bolt pulled out of the Aviva London Grand Prix because of his views on the UK tax regime. He chose to compete in Paris instead, for which he was paid $250,000 (£167,000) for his appearance. His agent Ricky Simms said if the fee had been earned in London, Bolt would also have been liable for taxation on worldwide sponsorship earnings accrued during his time in the UK. While he would have only been in Britain for a matter of days, Bolt’s contract with Puma alone is estimated to be worth £12.5m, which means his final tax bill combined with travel costs could have added up to more than his fee. Simms said that British tax law ‘has kept a lot of the big stars in other sports away from Britain’.

 

An HMRC spokesperson said: ‘The government put in place a tax exemption so that non-resident Olympic and Paralympic athletes would not pay UK tax on their income from Olympic and Paralympic appearances. Any tax on other UK income such athletes receive can in most cases be off-set against tax paid in their home country.’

 

Deadline Extended

Good news for late filers as it was announced today that the Self-Assessment filing deadline has been extended to the 2nd February 2012. This was due to planned strike action by some HM Revenue & Customs (HMRC) staff on 31 January 2012.

HMRC Invitation

HMRC have announced that from 31 January 2012, they would be sending letters to taxpayers who are suspected of fraud and inviting them to make a full disclosure. They will give them the opportunity to take advantage of the Civil Investigation of Fraud procedures by entering into a contract with HMRC to disclose the fraud within 60 days. In return for full disclosure, HMRC will not undertake a criminal investigation with a view to prosecution.

HMRC do not send emails!

The taxman has warned people to watch out for ‘e’ conmen posing as Revenue officials, emails are being sent to people from the fake address, HMRC@hmrc.online.uk, and marked ‘Copyright 2011, HM Revenue Customs UK.’

Recipients are told a tax refund is waiting for them and are instructed to visit what appears to be an official website. Anyone who does risks revealing data and losing their money to criminals.

An HMRC spokesman said “People should not check it out – they should just delete the email as soon as they see it.”

Have you filed your return?

More than a 1,000 taxpayers submitted their self-assessment returns on Christmas Day, HM Revenue & Customs figures have revealed.

The figures also show that 102 people saw in the new year at their computer completing their tax returns. In total, 11,648 filed on New Year’s Eve, while 8,935 people submitted on New Year’s Day.

Just a reminder to all those who have not yet filed their tax returns the deadline is the 31st January 2012 so just 26 days to go!

Fines and penalties

FINES, PENALTIES AND EVEN MORE FINES AND PENALTIES

In the past as long as you paid your tax liabilities on time and cleared any self-assessment tax due by 31 January, no late filing penalties were due. Even if you failed to pay your tax on time, late filing penalties were capped at £100 or nil if you were due a tax refund.

Things are changing! The 2010-11 tax returns have to be filed by 31 October 2011 if you are filing a paper return, or 31 January 2012 if you are filing electronically. If you fail to meet these deadlines you face the following penalty regime, even if your tax payments are up-to-date.

  • One day late an initial penalty of £100.
  • Three months late a daily penalty of £10 per day up to a maximum of £900.
  • Six months late an additional £300 or 5% of any tax outstanding, whichever is the higher amount.
  • One year late a further £300 or 5% of any tax outstanding, whichever is the higher
    amount.

As you can see the minimum penalty for filing 6 months late is £1,300 even if all your tax due is paid on time or you are due a tax repayment.

Please help us to file your tax return on time by sending in your information as soon as possible.

 

Agency staff

Agency workers will see their benefit rights extended from 1 October 2011. Once agency staff havemcompleted 12 continuous weeks of service, they will gain similar rights to permanent staff including pay, overtime, shift allowances, maternity rights, holiday pay and individual performance-bonuses. However, agency workers will still not be able to enjoy benefits such as occupational sick pay, redundancy pay and health insurance.

National minimum wage

New national minimum wage rates

The latest minimum wage increases will apply from 1 October 2011:

  • £6.08 for workers aged 21 and over (up from £5.93)
  • £4.98 for workers aged 18-20 years old (up from £4.92)
  • £3.68 for workers aged 16-17 years old (up from £3.64)

The minimum wage for apprentices rises by 10 pence per hour to £2.60. This applies to all apprentices under 19, or those who are aged 19 or over and in the first year of their apprenticeship.

What this means for you

In order to be compliant with the new rates you will need to review your employee rates of pay to ensure that they comply with these new changes.

Steve Jobs

Apple co-founder and former CEO Steve Jobs has died aged 56 after a long battle with cancer.

In a statement announcing the news, Apple said: “Steve’s brilliance, passion and energy were the source of countless innovations that enrich and improve all of our lives…The world is immeasurably better because of Steve.”
Jobs founded Apple with his childhood friend Steve Wozniak and the two created the Apple II, the world’s first mass personal computer. Following a clash with CEO John Sculley in 1985, Jobs resigned and started NeXt Inc.,a company which made university computers, as well as buying Pixar from Star Wars creator George Lucas.
Jobs returned to Apple in 1997 and introduced the attractive, clear plastic iMac models and a new laptop range that helped to steady the ship. But things really took off when he steered the company into consumer electronics with the iPod music player in 2001, swiftly followed by the iPhone and iPad – all of which confirmed the remarkable power of thinking about the customer experience first, and then applying the best design principles to giving them what they want.
Steve Jobs was a business and technology visionary and will be missed.