50 Percent Tax

Elmbridge residents pay billions in tax

50PercentTax.co.uk — Tue, 21 May 2013 13:38:14 +0000

Residents in one of Surrey’s leafy boroughs pay a whopping £1.18 billion in tax, it has been reported.

According to media reports, the tax bill of Elmbridge is more than the tax contributions of Newcastle and Cardiff added together. An article in the Daily Mail also notes that it’s, “200 times more [tax] than from Google”.

It’s little wonder Elmbridge’s tax bill is so high, given some of the big names that live there, including Jamie and Louise Redknapp, Ronnie Wood from the Rolling Stones, Chris Tarrant, Andy Murray, John Terry and Frank
Lampard.

After Elmbridge, Glasgow (£898 million) is next on the list of top taxpayers, followed by Sheffield (£812 million), Aberdeen (£728 million), Cardiff (£589 million) and Newcastle (£443 million). This is according to figures from accountancy firm UHY Hacker Young.

The findings suggest there is still a north/south divide when it comes to earnings. Mark Giddens, Head of Private Client Services at UHY Hacker Young, said: “There is a growing regional mismatch, with wealth and tax bills becoming concentrated within a handful of cities home to lucrative industries, or a collection of leafy suburbs”.

He added: “Governments have attempted to boost the attractiveness of other regions in the UK to top earners, even encouraging some public sector organisations to relocate to different parts of the UK. However, the pull of the South East, culturally, politically, and financially is still very strong for the highest earners.”

'Deliberate defaulters' named and shamed by HMRC

50PercentTax.co.uk — Fri, 17 May 2013 07:58:24 +0000

HMRC has released a list of individuals and businesses that are guilty of ‘deliberately defaulting’ on their tax debts, in the hope that they will be named and shamed.

Amongst the latest to appear on the taxation body’s list include a Manchester-based pub landlord who has already been fined £16,000 for unpaid debts totalling £26,000, and a Peterborough-based kebab shop owner who is in line to receive a £22,000 penalty for failing to pay the £41,000 he owes in unpaid taxes.

The taxation body publishes the details regarding those who have made deliberate mistakes on their tax returns, or who have been found to be “deliberately failing to comply with their tax obligations", under a change in the law from the Finance Act 2009. HMRC will only publish details relating to those who have been investigated by the body, and who have outstanding tax debts of more than £25,000.

The naming and shaming of such individuals has been criticised by some, with suggestions that both the Government and HMRC should be cracking down on the tax avoidance employed by large firms before that linked to individuals and smaller businesses.

Partner at international law firm Pinsent Masons, Phil Berwick, told The Telegraph newspaper that the body was also raising the levels of fines in a bid to stamp out tax evasion.

“HMRC is cracking down harder than ever before on those that owe tax debts," he said. "Where taxpayers deliberately underpay, HMRC is seeking a very significant level of penalty. HMRC is sending a message that if a business or individual fails to co-operate with them, not only will they be named and shamed, they could be hit with a huge fine.

"Businesses or individuals need to take advantage of any opportunity HMRC gives them to co-operate on tax irregularities before they get hit by a penalty. The scale of some of these fines shows that HMRC is quite prepared to put an uncooperative company or individual out of business,” Mr Berwick went on to say.

Glitch in HMRC's RTI software leads to PAYE woes

50PercentTax.co.uk — Wed, 15 May 2013 07:19:25 +0000

Problems with the free software provided by HMRC to allow small businesses to manage PAYE submissions have been acknowledged by the taxation body.

The Basic PAYE Tools (BPT) software package – which is aimed at companies with nine or fewer members of staff – is meant to work out national insurance and tax contributions for each payroll cycle. It is then meant to report it to HMRC in real-time, however the glitch has meant that the software is failing to file the PAYE submissions.

When employers log onto the software they are met with an error message if they attempt to make PAYE submissions, and taxpayers who call the helpline are met with a recorded message acknowledging the issue. It is thought that the fault is due to a Windows update, which led to the removal of a Windows registry key, which is needed to allow the software to function in its entirety.

An HMRC spokesman said: “As with any major change, a few initial problems have been identified and these are being resolved quickly. The issue referred here is not a BPT fault, but we have published guidance to help those employers affected to resolve it. The vast majority of BPT users who have already started to report PAYE in real time are successfully submitting returns without any issue.”

IPPR author moots radical new tax regime

50PercentTax.co.uk — Tue, 14 May 2013 07:36:42 +0000

The Government must carry out a comprehensive reform of the UK’s tax system to ensure it is fairer and fit for purpose, according to former barrister and economics expert Chris Nicholas.

He said that sharing the tax burden more fairly would boost the UK’s economic performance and support public investment. Mr Nicholas’s plan, put together for the Institute of Public Policy Research (IPPR) think tank, would include restructuring company taxes and moving some taxes from work to wealth.

He argues in favour of abolishing National Insurance and treating different types of earnings under a unitary tax regime, with a standard rate of 27.5 per cent and a £13,250 tax-free allowance. A higher rate of 35 per cent tax would be applied to those earning £50,000 annually and 40 per cent for salaries of £75,000 and above.

The reduction in work taxes would be offset by a higher rate of Corporation Tax of 27.5 per cent. Mr Nicholas would remove tax allowances and close tax avoidance loopholes in what he calls “the offshore realm within”.

He would also introduce a wealth tax component to corporation tax, and a general wealth tax would be created, targeting companies and individuals with a net wealth of £150,000 or more. This would be charged at between 0.5 and 1.5 per cent, depending on how much wealth was held, and would work alongside a new inheritance tax structure.

Property sales tax campaign launched by HMRC

50PercentTax.co.uk — Fri, 10 May 2013 07:36:37 +0000

HMRC has rolled out a new property sales campaign in a bid to encourage taxpayers to inform them about the sale or disposal of properties that are not their main homes.

The taxation body has informed taxpayers that they have until 9 August 2013 to let HMRC know about any relevant properties – either in the UK or abroad – or any profits that they have made through the sale of such properties on which Capital Gains Tax should be paid.

The taxpayers then have until 6 September 2013 to work out their tax liability and pay HMRC what they are owed. After this date has passed, the taxation body will “use the information it holds to target those who should have made a disclosure under this campaign and failed to do so,” its website confirmed.

HMRC also let taxpayers know that, by offering up relevant information on a voluntary basis, they would be likely to receive better terms than if they have to be approached by HMRC.

Those who will be eligible for the campaign include taxpayers who have sold a second residential property in the UK or abroad, those who have sold their main home as in some circumstances the Private Residence Relief does not apply and those who have inherited or been gifted a property.

HMRC's crackdown on tax evasion extends to tax havens

50PercentTax.co.uk — Wed, 08 May 2013 08:30:47 +0000

Increasing numbers of tax havens have agreed to provide information about the bank details of British taxpayers as HMRC cracks down on tax evasion.

Havens including Montserrat, Anguilla, the British Virgin Islands, Bermuda, and the Turks and Caicos Islands, will now pass on personal details of certain taxpayers including their names, addresses and dates of birth, as well as financial details including account numbers, account balances and payment details.

Alongside this information being shared automatically with the UK, it will also be shared with other G5 nations, namely France, Germany, Italy and Spain, as the global clampdown on tax evasion continues. Certain accounts held by trusts will also come under scrutiny as a result of the new agreement.

Chancellor George Osborne confirmed that the agreement was positive news in the fight against tax dodgers. “This represents a significant step forward in tackling illicit finance and sets the global standard in the fight against tax evasion," he said.

“I now hope others follow these Governments' lead and enter into similar commitments to this new level of transparency, removing the hiding places for those who seek to evade tax and hide their assets,” Osborne added.

HMRC deems Alternative Dispute Resolution service a success

50PercentTax.co.uk — Fri, 03 May 2013 07:25:29 +0000

HMRC has deemed the Alternative Dispute Resolution service – a new method of dealing with disputes relating to tax – as largely successful.

The service has been seen as a positive introduction for both the taxpayer and HMRC, and two-thirds of applicants to the scheme walked away with a full resolution or a partial resolution to their dispute. The vast majority saw their disputes resolved entirely, figures revealed.

The scheme – which is aimed at both small businesses and individual taxpayers who are unhappy with a decision made by HMRC regarding a tax issue – sees an HMRC official who has not been involved in the case and has mediation training - preside over the dispute process.

Discussions are then held in order to reach a final resolution. In some cases, an external mediator can be paid for jointly between the two parties.

Yvette Nunn, president of the Association of Taxpayer Technicians, said: “Tax dispute resolution has been in need of reform for far too long. This is, I believe, the shape of things to come; I look forward to further HMRC announcements on the rolling out of ADR.”

Record £220 million haul received from high-rate taxpayers

50PercentTax.co.uk — Wed, 01 May 2013 07:52:10 +0000

HM Revenue & Customs' High Net Worth Unit has revealed that it has received a record £220 million haul from high-rate taxpayers over the 2012/13 tax year.

The Unit – which focuses on the tax affairs of 5,800 high-net-worth individuals with assets of more than £20 million – increased its yield from tax enquiries by 10 per cent. It collected £200 million from the taxpayers over the course of the 2011/12 tax year.

The High Net Worth Unit, which was set up in 2009 and employs 380 staff members across eight sites in the UK, has generated £665 million of additional tax over the last four years, on top of the tax usually collected from the high-net worth individuals.

Some contractors and other high tax payers could be doing more to cut down what they owe in taxes.

David Gauke, Exchequer secretary to the Treasury, told Accountancy Age: “HMRC's high net worth unit provides the specialist attention they require in ensuring the wealthy pay the tax they owe.

“This Government has reinvested almost £1 billion in HMRC and expects them to deliver almost £22 billion in 2014/15,” he added.

Martin Randall, head of the High Net Worth Unit said: “The tax affairs of the richest people in the country can be complex as they have large tax bills, and that's why we've focused resources on getting their tax right. The majority of the wealthiest taxpayers play by the rules, paying the right tax at the right time, but we take action against the minority who don't.”

Daily fines on the horizon for late tax return filings

50PercentTax.co.uk — Tue, 30 Apr 2013 07:41:42 +0000

Daily fines are soon to be levied upon more than 500,000 taxpayers as a result of the late filing of tax returns.

It has been estimated that between 650,000 and 850,000 self-assessment taxpayers have yet to file their annual returns to HM Revenue and Customs (HMRC) for the 2011-12 financial year. The taxpayers should have filed their returns by 31 January this year in order to avoid being asked to pay a fine.

The taxation body has already sent out £100 penalties to some 850,000 taxpayers by 20 February, advising them that they then had three months to file their accounts. However, despite this warning, hundreds of thousands of taxpayers have yet to file their returns.

From 1 May, a £10 daily fine will be applied to those who have still not submitted their tax return. This daily fine can be up to a maximum of £900.

“Anyone who hasn't yet sent their 2011-12 tax return to HMRC will have already incurred a £100 late-filing penalty. Non-filers have to file to avoid further penalties or contact us to ask to be taken out of self-assessment, and provided they meet the criteria, we will take them out of SA and cull any penalties incurred,” an HMRC spokesman told Sky News.

UK challenges European financial transaction tax

50PercentTax.co.uk — Mon, 29 Apr 2013 08:08:45 +0000

The UK government has launched a legal challenge against the new plans for a European financial transaction tax (FTT).

The tax, which is aimed at raising public funds, will be adopted by eleven EU states including Germany, France, Portugal, Austria and Greece.

Ministers have expressed their concern that the FTT, although not supported by the UK, could be imposed on UK firms trading with businesses based in one of those states.

This could cause the FTT to have an effect on the City of London if, for example, a British firm trades with branches of French or German banks based in the capital. In this case, the British government would collect the tax but would not be allowed to keep it.

UK Chancellor George Osborne launched a legal challenge against the FTT a the European Court of Justice this week, saying that he believed the tax was not right for Britain.

The Chancellor also expressed his concern about the affect that the tax could have on Britain, arguing that those states wishing to be involved should do so without impacting upon the British economy.

Mr Osborne said: "Britain doesn't want to take part but it also doesn't want to be caught in the effects of this tax being introduced by other countries."