Tax return notes made more user-friendly
HM Revenue & Customs (HMRC) has rewritten some of its tax return guidance notes in a more user-friendly format.
The new brief notes are approximately half the size of the existing detailed guidance notes. They have been written in everyday language and include visuals to help you to understand the information and what needs to be returned on the tax return. The notes focus on those areas of the tax return where mistakes are often made.
This year, the ten notes are being sent out with the tax return in the new brief style.
- SA150: Tax return.
- SA101: Additional information.
- SA102: Employment.
- SA103F: Self-employment (full).
- SA103S: Self-employment (short).
- SA104F: Partnership (full).
- SA104S: Partnership (short).
- SA105: UK Property.
- SA106: Foreign.
- SA107: Trust.
If you still want the detailed versions of the above notes, you will be able to download them from the HMRC website: www.hmrc.gov.uk. The notes not listed are not yet available as brief notes, and the full versions will be sent out later this year.
HMRC is to seek feedback on the new brief notes, and as a result may make changes to them in future years.
RTI rules relaxed for small businesses
Small employers are to be given more time to report pay and deduction details to HM Revenue & Customs (HMRC) under Real Time Information (RTI).
Under RTI, as an employer you are required to send details of pay and deductions to HMRC electronically each time that you pay an employee by submitting a report known as a full payment submission. Most employers will migrate to RTI from this month (April 2013) and all employers must be reporting in real time by October 2013.
The RTI rules require you to send pay and deductions information to HMRC `at or before’ the time at which the payment is made to the employee. However, many small employers make payments to employees weekly or fortnightly, but only run the payroll once a month. Under the RTI rules, a report should be sent to HMRC each time an employee is paid.
However, HMRC has acknowledged small employers may need time to adapt to RTI reporting and relaxed the `at or before’ requirement for employees with fewer than 50 employees until October 2013. Under the temporary relaxation, if you have fewer than 50 employees you can send pay and deductions information to HMRC at the time that you do your regular payroll as long as you send the information to HMRC by the end of the tax month. A tax month runs from the 6th of the month to the 5th of the following month. This relaxation is only available until 5 October 2013, after which you must send the information to HMRC each time that you pay an employee.
Property sales campaign targets second homes
HM Revenue & Customs (HMRC) has launched a Property Sales campaign to encourage taxpayers to come clean on sales of second homes where tax may be due.
The Property Sales campaign is aimed at people who have sold a second or additional residential home in the UK or abroad which is not their main home and have not told HMRC about the sale. If this applies to you, you can take advantage of the campaign to get your tax affairs up to date and to pay any tax that you owe. The campaign can also be used if you have sold your main home at a profit and private residence relief is not available in full (for example, because you have let it out or nominated another property as your main home for some of the time that you have owned it). If you sell a property that is not your main home at a profit, and the gain exceeds your capital gains tax annual exempt amount (£10,900 for 2013/14), you may have to pay capital gains tax.
If you want to take part in the campaign, you must tell HMRC by 9 August 2013. This is called ‘making a notification’ and can be done by completing a notification form online (www.hmrc.gov.uk/campaigns/psc-notification.pdf) and either emailing it to HMRC or by printing it out and posting it. You can also notify by calling the Property Sales campaign helpline on 0845 601 8819.
Once you have notified your intention to use the campaign, you must work out the gain on which tax is due. Guidance on how to do this is available on HMRC’s website. You must then make a voluntary disclosure by completing the property sales disclosure form (www.hmrc.gov.uk/campaigns/psc-disclosure.pdf).
You will need to tell HMRC about all income, gains and other liabilities that you should have previously reported – not just any unreported gains on second or additional properties. It is important that you make a full disclosure. You will also need to follow the guidance on the HMRC website to work out what interest you owe and what penalty, if any, you need to pay.
You must make the disclosure and pay the tax, interest and penalty by 6 September 2013. If you are worried that you will not be able to pay all that you owe in one go, you should talk to HMRC about the possibility of paying in instalments as soon as possible.
It is always better to tell HMRC about undeclared liabilities, because you will be treated more leniently than if you wait for them to come to you.
HMRC’s tax enquiry centres to close
In a cost saving measure, HM Revenue & Customs (HMRC) has announced that it will close all of its 281 enquiry centres next year.
Enquiry centres provide taxpayers with face-to-face help, but are expensive to run, with each visit costing an average of £152. Visits to enquiry centres have fallen from five million in 2005/06 to 2.5 million in 2010/11, and HMRC estimates that 80% of the queries handled by its enquiry centres could have been dealt with online or by phone.
The closure programme will begin in June 2013 with the start of a five-month telephone pilot. As part of that pilot exercise, 13 enquiry centres will close. Taxpayers will instead need to go online or call the help line to get their tax queries resolved. HMRC plans to offer a more specialised service for taxpayers whose affairs can be sorted out over the phone. It also plans to offer home visits to people whose affairs cannot be sorted out in this way.
The measure will save HMRC an estimated £13 million a year. Approximately 1,300 staff members are employed in enquiry centres, but HMRC intends to deploy them elsewhere.
New tax-free childcare scheme from autumn 2015
The Government has unveiled plans for a new tax-free childcare scheme to help working families with their childcare costs, to be introduced from autumn 2015.
Under the scheme, the Government will cover 20% of a working family’s childcare costs, up to a maximum of £1,200. The support is equivalent to the basic rate of tax on childcare costs of £6,000 a year.
It will be available to all households where both parents work but do not receive support in the form of childcare credits or, once introduced, Universal Credit, as long as neither parent earns more than £150,000 a year.
The scheme will initially be available only in respect of childcare costs for under-fives. It will also cover childcare costs for disabled children under 16, in line with European Union rules. Over time, the scheme will be extended to cover childcare costs for all children under 12.
Existing tax exemptions for childcare vouchers and employer-supported childcare will eventually be replaced. Under existing rules, you can receive childcare vouchers or employer-supported childcare tax-free up to your exempt limit. Your exempt limit depends on when you joined the childcare or voucher scheme and the rate at which you pay income tax. All parents who joined a scheme before 6 April 2011 can receive childcare vouchers or employer-supported childcare tax-free of up to £55 a week.
If you joined a scheme on or after 6 April 2011, your exempt limit depends on the rate at which you pay income tax. For 2013/14, if you pay tax at the basic rate of 20% your exempt amount is £55 a week. If you pay tax at the higher rate of 40%, your exempt amount is £28 a week. And, if you pay tax at the additional rate of 45%, your exempt amount is £25 a week. In this way, the relief is worth £11 a week, regardless of your marginal rate of tax.
