Every week we take a look at what is trending in the accountancy and tax press and share items that we think will interest you. However, these are only outlines, and where they relate to tax planning should not be acted upon without looking into them more completely as everyone’s circumstances are particular to them. You need to take specific advice appropriate to your own circumstances.
While every effort is made to deliver accurate, informative, and balanced articles this content is general in nature and should not be used as the sole basis for making decisions.
Fake Messages from Government Gateway
Many people including ourselves have been receiving emails from the Government Gateway with a confirmation code to confirm an email address. If such requests are received, these should be reported to HMRC.
HMRC advises that anyone who has received an email they haven’t requested, to verify a change to their online account, should ignore it. You should also ignore any follow-up emails asking you to click a link.
HMRC says, “These emails, which we are aware have been received by some customers, are a tactic by scammers to direct people to a phishing site and steal personal details. HMRC systems have not been compromised – but criminals have attempted to create fake customer accounts or to access existing accounts using personal data obtained through a variety of routes, including breaching other organisations’ security.”
Anyone who has received such a message is encouraged by HMRC to report it to HMRC at phishing@hmrc.gov.uk.
Digital scheme for DIY housebuilder VAT refunds launched
If you are building your own home you can now claim back VAT incurred through an online service.
HMRC has launched an online service to reclaim VAT for DIY housebuilders. This follows an announcement at the Spring Budget 2023 and an update at the Autumn Statement 2023.
The VAT DIY housebuilders scheme allows anyone building their own home to reclaim the VAT they pay on building materials incorporated into the building. This includes eligible goods given to a builder to incorporate into the building before the date of completion.
The scheme also applies to individuals converting a non-residential building into their own home, as well as those constructing a new charity building.
HMRC has also published new guidance regarding the scheme, depending on the type of claim being made:
- VAT refunds for new builds if you’re a DIY housebuilder
- VAT refunds for conversions if you’re a DIY housebuilder
- VAT refunds for constructing a new charity building
To make a claim, you will need:
- the building regulation completion certificate;
- evidence of planning permission; and
- plans of the building.
If you cannot use the online service you can still make claims using paper forms. However, claims made on paper forms will take up to twice as long as those made using the online service and are less likely to be accepted without query.
The time limit for making claims has also been extended for buildings completed on or after 5 December 2023. The time limit has been extended from three months after completion to six months after completion.
Problem with Paying Early
Many employers bring their pay date forward over the Christmas period. It has advantages for both the employer and the employee.
If the payday is brought forward because it falls on a weekend or bank holiday, or if the pay is made early at Christmas and New Year, the FPS should continue to show the normal, contractual pay date. This is because reporting the incorrect date on the FPS could result in issues for employees who are in receipt of universal credit.
i.e. it may look like workers have received more than expected in a given assessment period reducing the amount of Universal Credit they are entitled to receive or potentially remove the entitlement completely for a pay period.
Changes to Self-Assessment
Threshold increased
The threshold below which a self-assessment income tax return does not need to be submitted was increased from £100,000 to £150,000.
From the 2024/25 tax year, the £150,000 threshold will be removed entirely and all individuals with employment as their only substantial source of income will be de-registered from Self-assessment and taxed via PAYE.
This change is estimated to lift up to 338,000 taxpayers out of the SA regime in 2024/25.
You still need to register and file for SA regardless if you have self-employment income over £1,000; other untaxed income over £2,500 that cannot be taxed via the PAYE system; employment expenses in excess of £2,500; or income from savings and investments over £10,000.
HICBC to be taxed via PAYE
The Government plans to simplify the process where you become liable for the High Income Child Benefit Charge, particularly for those who currently need to register for self-assessment to pay the charge. However, no further information has been provided.
Post Xmas Sales of Unwanted Clothing
If you are one of the millions of UK individuals selling second-hand clothes on digital platforms HMRC may now find out more about your potential untaxed income.
From 1 January 2024, digital platforms will have to start collecting seller data and pass that over to HMRC to match against taxpayers’ records to make sure people report the right information on their tax returns.
The measures also impact those renting out properties on Airbnb (among other platforms) or people selling their services online.
The first reporting deadline for online platforms will be 31 January 2025 and to meet these requirements they will need to implement new ways of collecting seller information so that HMRC can match and verify it against taxpayers’ records to make sure individuals are correctly reporting their income on their tax returns.
If you are an occasional seller receiving no more than £1,700 for fewer than 30 sales in a reporting period, your information is not required to be provided to HMRC. In any event, if you make sales of £1,000 or more in a year, you will need to consider whether a tax return is required.
The information collected by platforms must be shared with HMRC as well as with sellers, so you then know what HMRC has been told.
Young Accountants – Heavy Workloads
A recent survey of young accountants has found that:
- One in five admitted to calling in sick to avoid a challenging day – nearly half of these said they called in sick instead of booking annual leave
- more than a quarter said they had an unrealistic workload.
Virtually all claimed they get frustrated in their current roles. The main reasons cited were heavy workloads with expectations being too high and /or the lack of recognition. Lack of time and resources was a significant factor in their unhappiness, with insufficient time to complete the tasks they were given, too much manual reporting, and/ or unrealistic workloads.
About a third did not have a good work-life balance, with many taking time off due to stress.
Almost all respondents said they needed better technology at work, especially more use of analytics.
The research was conducted among 251 young finance professionals between the ages of 18 and 35 who have up to three years’ experience.
Quarter of income tax paid by only 100,000 people
The UK’s top 100,000 taxpayers paid an average income and capital gains tax bill of £559,000 each in 2021/22, up by 18% from £475,000 in the previous year. These taxpayers also paid almost a quarter of HMRC’s annual take from these taxes.
The top 100 taxpayers in the UK collectively paid a record £4.6bn of income and capital gains tax in 2021-22, the equivalent of £46m each.
100,000 people paid £55bn in tax, 24% of all income and capital gains receipts, despite making up just 0.3% of taxpayers.
Fraud on Online Whisky Investors
In the last year, there have been 89 reports to Action Fraud about alcohol investments. Investors have lost an estimated £3m.
The adverts claim to offer investors returns between 8% and 12% within a year.
Detective inspector Nichola Meghji, from the fraud operations team at the City of London Police, said: ‘As we approach the run-up to Christmas, we would like to remind people of the potential risks associated with investment opportunities, especially around whisky.
‘Much like gin, the interest in micro-breweries and independent distilleries has grown exponentially over the last decade as the British consumer has become more interested in homegrown spirits versus imported beers and wine.
‘An investment of a cask of whisky may seem like a wise choice, and perfect as a Christmas present to some, but we would encourage everyone to stay vigilant and to not be sucked in – especially if adverts guarantee you will get year-on-year returns.
‘Certain companies prey on people’s lack of knowledge around investing, which is then exploited at a great cost to the consumer.’
HMRC Targets Non-Payers of VAT
Targeted letters will be sent to accountants and non-represented individuals advising them that HMRC records show that they have not paid VAT or submitted returns.
If businesses do not send overdue returns and pay any VAT due, HMRC said it will ‘make an assessment for the VAT we estimate is due and ask you to pay that amount. This could be more than what you owe.
‘If you send us a return late, we can also charge you a surcharge or penalties, as well as interest. We can charge different penalties, depending on whether the accounting period starts before or after 1 January 2023.’
Penalties will not be charged if businesses have a reasonable excuse for not sending a return on time. The return must be sent as soon as the reasonable excuse ends.
Questions?
If you have any questions about any of these, you know where to find us. If you prefer, just give me a ring on 07770 738770 or email me at alan.long@thelongpartnership.co.uk.
