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Tribunal finds that age and “not owning a computer” are not reasonable grounds for an exemption from filing VAT returns online

The Tax Tribunal judgement in the case of Glen Lyn Generations Limited & Exmoor Coast Boat Cruises Limited has confirmed HMRC’s assessment that age and having limited access to IT equipment were not reasonable grounds to give an exemption to file VAT returns online.

All businesses must file VAT returns online although in very limited circumstances HMRC can allow an exemption to permit the use of paper VAT filings. The director of the two companies here argued that his age was such that he had never learnt to use a computer at school – and that this, along with his remote location, meant that he should be granted an exemption from filing electronic VAT returns. HMRC refused to allow the exemption and this decision was supported by the First Tier Tax Tribunal.

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Beware Bogus HMRC Phone Calls

There has been an increase in bogus HMRC phone calls recently. HMRC have issued the following description including guidance on how to deal with a suspicious phone call:

HMRC is aware of an automated phone call scam which will tell you HMRC is filing a lawsuit against you, and to press one to speak to a caseworker to make a payment. We can confirm this is a scam and you should end the call immediately.

This scam has been widely reported and often targets elderly and vulnerable people.

Other scam calls may offer a tax refund and request you to provide your bank or credit card information. If you cannot verify the identity of the caller, we recommend that you do not speak to them.

If you’ve been a victim of the scam and suffered financial loss, report it to Action Fraud.

The calls use a variety of phone numbers. To help our investigations you should report full details of the scam by email to: phishing@hmrc.gsi.gov.uk, including the:

  • date of the call
  • phone number used
  • content of the call

CLICK HERE TO FIND OUT ABOUT OTHER HMRC SCAMS TO BEWARE OF

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HMRC begins to issue letters to taxpayers suspected of receiving undeclared foreign income

HMRC have in the last week begun to issue warning letters to taxpayers where they believe that there may be undeclared offshore income or assets. These letters arise from information that HMRC has obtained under the Common Reporting Standard (CRS).

The regime for disclosure of undeclared overseas income changes significantly after 1 October – with penalties increasing to 100% – 200% of the undeclared tax due. Taxpayers are advised to consider the position carefully in advance of the 30 September if they believe that they may have undeclared overseas income.

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Tribunal finds that “total confusion” is not a Reasonable Excuse for late filing of tax returns.

A recent Tribunal case (Spacia Grocers vs HMRC) has found that the “total confusion” of the taxpayer is not a Reasonable Excuse for the late filing of tax returns. HMRC charges penalties for the late filing of tax returns – unless the late filing arises where there is a Reasonable Excuse.

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HMRC release statistics on distribution of Income Tax across industries

HMRC have released statistics showing the distribution of Income Tax deductions across sectors. The statistics cover the period from 2010/11 to 2016/17. The figures show that the main sectors contributing to income tax receipts are Financial and Insurance Activities (17.1%), Professional, Scientific and Technical Activities (12.2%) and Repair of Motor Vehicles and Motorcycles (10.4%).

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HMRC plans to increase interest rates on late tax payments following increase to Base Rate

Following yesterday’s increase in the Base Rate to 0.75% HMRC has announced plans to increase the interest rate charged on late tax payments. Interest rates for late payment are currently 3% and it is expected that these will increase to 3.25%.

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HMRC publish statistics on Inheritance Tax

HMRC have published detailed statistics regarding the Inheritance Tax System for recent years. These figures show that;

  • 4.2% of UK deaths were liable to IHT – continuing the longer term trend of more estates being brought into the IHT system
  •  IHT receipts totalled £5.2bn in 2017/18 – an increase of £388m from the previous year.
  • The capital value of estates has increased substantially since 2009/10 – with the majority of the increase due to increases in residential property prices

The statistics reflect the general trend that more estates have been pulled into the IHT system due to increases in property values and freezes in the level of the tax free Nil Rate Band.

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HMRC warns taxpayers of deadline to declare offshore assets

HMRC is advising tax payers to declare foreign income or profits on offshore assets before 30 September to avoid higher tax penalties.

If taxpayers have offshore income and gains then HMRC must be notified of an intention to disclose by the 30 September – they will then have 90 days to collate the full disclosure and pay any tax due. From 1 October 2018 HMRC will have access to more information on international assets held by UK tax payers under the information sharing mechanism known as the Common Reporting Standard (CRS).

To date 17,000 tax payers have notified HMRC of offshore assets.

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Making Tax Digital Updates from HMRC

HMRC issued VAT Notice700/22 on Friday giving more information on Making Tax Digital for VAT:

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Tax Credits renewal deadline – 31 July 2018

The deadline for renewing tax credits is 31 July 2018. All those claiming working tax credit (WTC) and/or child tax credit (CTC) should check what action they may need to take.

To follow the ICAEW guidance: CLICK HERE

 

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