HMRC is urging contractors to regularly verify the CIS status of their subcontractors due to errors in tax deductions, reports the Institute of Chartered Accountants in England and Wales. Contractors must verify new subcontractors before payment, using HMRC’s free online service or commercial software (required for verifying over 50 subcontractors). Subcontractors not included in CIS […]
The taxpayer filed an R&D claim for an AI-based “know your client” tool, supported by substantial evidence. HMRC rejected the claim, arguing it didn’t qualify as R&D since it didn’t advance overall knowledge. Despite further evidence and acknowledgment of the project’s impressiveness, HMRC maintained its stance. The taxpayer appealed, and the tribunal, while finding […]
HMRC’s 2023-24 report shows record tax revenues of £843.4bn, up 3.6% from last year. Operating costs were £7.2bn. Tax debt fell slightly to £43bn but remains high. Uncollectible taxes rose to 45.4% (£27.6bn) from 32% (£19.2bn) the previous year.
The number of companies forced to close following petitions presented by creditors jumped 63% to 2,067 in 2023, up from 1,265 in 2022, according to statistics from the Royal Courts of Justice. The number of winding up petitions rose to 70% to 4,917 in 2023, up from 2,885 the year before. Many businesses are struggling […]
The Institute of Chartered Accountants in England and Wales (ICAEW) has warned taxpayers who have overpaid income tax that they must now request a repayment. HMRC is reviewing PAYE income tax records for 2023-24 to determine correct payments. If overpayment is found, taxpayers will receive a tax calculation showing a repayment or amount due. Previously, […]
HMRC is contacting persons with significant control (PSC) in companies who may have undeclared income. About 2,000 letters were sent, asking PSCs to verify and correct their 2022-23 returns by 23 August 2024, and ensure accuracy for 2023-24.
Zero-rated, reduced rated and exempt supplies and what our New Government has to say! Zero rated VAT: Goods and services that are zero-rated are still VAT-taxable, but the rate of VAT is 0%. This means that while no VAT is charged to the customer. An example of zero-rated supplies are Children’s clothing’s and their footwear. […]
Navigating VAT on Leased Cars: What Businesses Need to Know When it comes to hiring or leasing a car for business purposes, understanding the intricacies of VAT can make a significant difference in your accounting. One common scenario is a business that leases a car and pays VAT on the charges, but only uses the […]
Lifetime Allowance (LTA) caps your pension savings without extra tax charges, excluding the state pension. Downsides Reduces Retirement Income: Hefty tax charges for exceeding the LTA. Penalizes Savers: Diligent savers may face unexpected penalties. Upsides Promotes Balanced Savings: Encourages diverse retirement planning. Ensures Fairness: Prevents excessively large pensions for higher earners. Abolishing the LTA Tax […]
Neglecting the tax function can be costly for businesses. If HMRC finds an error and loses confidence in a taxpayer’s compliance, it may expand its inquiries into other tax areas, leading to increased taxes, penalties, and wasted resources. This scrutiny can also affect business sales, exposing vendors to price reductions and damaging reputations. To avoid […]
IPSE calls for better HMRC oversight by the government to build trust with the self-employed. Proposals include appointing a minister for HMRC, scrapping off-payroll rules, and increasing the trading allowance to £5,000. CEO Derek Cribb highlights the sector’s potential to boost the economy.
HMRC is updating late payment penalty rules from the Finance Act 2021. The new regulations will let HMRC charge the second late payment penalty if tax isn’t paid within two years. This change stops taxpayers from avoiding the penalty by delaying payment until the end of the two-year period.