Am I Eligible For The Self Employed Income Support Grant?

HMRC have released an eligibility checker today which you can use to check if you are eligible to claim the grant in June. Some people are able to put applications in from as early as 13th May 2020. In order to check eligibility please ensure you have to hand your UTR and National Insurance Number and click on the following link: https://www.gov.uk/guidance/claim-a-grant-through-the-coronavirus-covid-19-self-employment-income-support-scheme#eligible

IR35 Reform Delayed

It was announced this evening that the IR35 reforms that were due to come in on 6 April have now been delayed by a year.

Chief Treasury Secretary Steve Barclay made the announcement as part of measures put in place to protect the economy during the Coronovirus outbreak

What Happens If I miss The Self Assessment Deadline?

The deadline for submitting an online Self-Assessment and paying tax you owe is midnight on the 31st of January following the end of the tax year. If it is not filed on time you will face penalties.

Anyone who misses the Self-Assessment filing deadline will receive a £100 fine, this is imposed immediately whether you owe tax or not. If the tax return is more than 3 months late HMRC can then impose an extra daily fine of £10 for the next 90 days if you fail to file your return during this time, potentially increasing the total penalty by £900 to £1000.

Penalties for late filing are also imposed after 6 months and then 12 months, which are based on 5% of the amount of tax you owe or £300 (whichever is greater).

The penalties for being 6 months late and 12 months late are subject to the interaction rule and taken together they should not exceed 100% the tax due.

On top of this you will be charged penalties and interest on any unpaid tax. Additional penalties may also apply if HMRC believe you deliberately have withheld information and a return is late.

We offer tax insurance for our clients

HMRC has been using a range of new tactics to ensure that businesses are paying the right amount of tax. Even if you have paid tax correctly, it can still be expensive and nerve-racking.

The average HMRC investigation cover can last 16 months and can cost a potential £5,000 in accountancy fees.

We know that HMRC investigations can be expensive, that’s why for all of our clients we offer tax health and investigation insurance for services. This month, we have had a VAT inspection with a clean bill of fees fully covered by the insurance. http://bit.ly/2ui8458

Are you a landlord of a residential property?

HMRC have released ‘The Let Property Campaign’ which allows landlords the opportunity to bring tax affairs up to date and get the best possible terms to pay tax owed.

HMRC might look at things such as the land registry, landlords using the tenancy deposit regime and even issue notices under Paragraph 1, Schedule 23 to the Finance Act 2011 to letting agents to obtain details of residential landlords and transactions. Data obtained will then be cross checked against self-assessment records.

HMRC will identify and write to landlords who they consider might not have declared rental income. If you would like free confidential advice on your next steps as a landlord, get in touch http://bit.ly/2ui8458

New finance bill proposed for 2019-20.

From 6th April 2020, if a company becomes insolvent with unpaid tax liabilities which should be payable to HMRC such as VAT, PAYE Income Tax, Employee National Insurance contributions and these liabilities will take priority over other unsecured or floating charge creditors.

Other company tax liabilities such as corporations’ tax and employers NIC will not be affected by the measure.

HMRC will also make directors and other people involved in tax avoidance, evasion or phoenixism jointly and severally liable for company tax liabilities, where there is a risk that companies may deliberately enter insolvency.

To find out more, please visit: http://bit.ly/2RmSZvG

HMRC Insolvency Powers from April 2020

From 6th April 2020 new measures regarding insolvency will be introduced by the 2019-20 Finance Bill meaning HMRC will have increased powers.

It is proposed that Finance Bill 2019-20 will contain measures to ensure that from 6 April 2020 where a company becomes insolvent with unpaid tax liabilities which it holds in trust to pay to HMRC, these liabilities will take priority over other unsecured or floating charge creditors.  

Taxes that a company holds in trust for HMRC include VAT, PAYE Income Tax, Employee’s National Insurance Contributions and Construction Industry Scheme deductions.  Other company tax liabilities such as Corporation Tax and Employer’s National Insurance Contributions will not be affected by the measure.  HMRC will remain below preferential creditors.

Diane Dunion, Partner from Begbies Traynor Stoke has helped to expand on what exactly this means for businesses:

“The draft legislation proposes to amend The Insolvency Act 1986, giving HMRC priority in the recovery of VAT and certain other debts owed to HMRC in insolvency proceedings; by creating a new category of creditor for the purpose of the distribution of assets. 

When a business enters formal insolvency proceedings, the order in which assets are distributed is prescribed by law.  Currently, HMRC ranks as an unsecured creditor.  The introduction of the legislation will allow HMRC to rank as a “secondary preferential” creditor, which places them in a better position on the creditor hierarchy.

However, HMRC will remain an unsecured creditor, for taxes levied on businesses such as Corporation Tax and Employer NIC.

The Explanatory Note to the Legislation notes that “the Government does not believe it is fair that taxes paid by employees and customers should be diverted to other creditors, when these are only held temporarily by businesses whose role is to transfer these payments to the Government. The Government view is that this is a fair approach that balances the interests of creditors and the Exchequer, which relies on these taxes to fund public services.”  

Monies collected in respect of those taxes paid by employees and customers, are essentially held on trust for HMRC.  On that basis and in the event of formal insolvency proceedings, these funds will be paid over to HMRC – to “benefit the wider population by being utilised for their original purpose” (i.e. to fund public services).”

The new finance bill will also allow HMRC from 6 April 2020 to make directors and other persons involved in tax avoidance, evasion or phoenixism jointly and severally liable for company tax liabilities, where there is a risk that the company may deliberately enter insolvency. It is designed to prevent individuals benefitting from avoidance or evasion through the insolvency of their business when unable to pay its debts to HMRC.

The conditions for a joint liability notice are:

  • Insolvency is underway for the company or there is serious threat of insolvency
  • A company has entered into tax avoidance arrangements, or engaged in tax evasive conduct.
  • The person either was responsible for the company/LLP (perhaps as a director or shadow director), enabled the avoidance or evasion or benefited from it
  • A tax liability is expected to arise from the avoidance or evasion and there is a serious possibility that some or all of that tax will not be paid

The new rules will also allow HMRC to issue a joint liability notice to individuals whose companies have been involved with repeated insolvency or non-payment of tax with limited liability

There is a common misconception that directors/members will not be personally liable for anything, because their business has limited liability (either Limited Company or Limited Liability Partnership).  This is not always the case and more people may find themselves held accountable for their actions as a result of the changes.

HMRC News

From April 2020, private sectors will need to check whether contractors need to pay income tax and national insurance contributions. Which means shifting the responsibility to the organisation rather than the contractor.

 

If you are wondering whether you’ll be affected by this or would like more information, then please call us on 01782 479699 to speak with one of our construction industry tax specialists.

 

#Contractor #HMRC #PrivateSector #Business #IR35 #Contractors #IncomeTax #NationalInsurance

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With over 15 years experience in a Top 10 UK Accountancy Firm and experience working in various industries and the contractor environment, you can rest assured that we understand things from both the perspective of the industry that you work in and as professional taxation specialists, who can advise you along the way.

HMRC’s Let Property Campaign

The Let Property Campaign is an opportunity open to all residential property landlords with undisclosed taxes to get up to date with their tax affairs in a simple way and take advantage of the best possible terms. Unlike previous campaigns, there is no disclosure ‘window’ requiring you to disclose what you owe by a specific date.

HMRC is targeting compliance activity across all landlord types and will identify and write to landlords who they consider may not have declared all their rental income. Those involved will not be able to use the let property campaign.

In order to use the let property campaign you will need to notify HMRC of your intention to make a disclosure and then you will have 90 days to work out and pay what you owe. Penalties if applicable should be less than if HMRC make the discovery themselves.

HMRC may look at things such as the land registry, landlords using the tenancy deposit regime and even issue notices under Paragraph 1, Schedule 23 to the Finance Act 2011 to letting agents in order to obtain details of residential landlords and transactions. Data obtained will then be cross checked against self assessment records. Here at Premier Tax Solutions we have seen this occurring first hand so it is a very real risk.

If you are a residential landlord who would like some confidential advice on the Let Property Campaign please call us on 01782 479699.

For more information on the Let Property Campaign see the following guide: https://www.gov.uk/government/publications/let-property-campaign-your-guide-to-making-a-disclosure/let-property-campaign-your-guide-to-making-a-disclosure