eNews – February 2018
In this month’s Enews we report on the roll out of Tax-free Childcare and the reduction in HMRC scam texts. We also consider the latest list of deductible subscriptions and rejected Self assessment expenses claims and excuses. With revised income tax bands for Scottish taxpayers there is lots to update you on.
- HMRC rejected Self Assessment expenses and excuses
- Tax-free childcare roll out
- HMRC halts thousands of scam text messages
- Updated list of professional subscriptions
- What will the Spring Statement bring?
- Scotland revise income tax bands
HMRC rejected Self Assessment expenses and excuses
HMRC have released the latest list of imaginative excuses made by individuals who failed to submit their self assessment return by 31 January deadline in 2017. Excuses include alien sightings and being too busy touring with a one-man play.
HMRC’s annual list of outlandish excuses is used to publicise the self assessment deadline of 31 January following the end of the tax year. An automatic £100 penalty applies to those who have the obligation to complete a return and miss the filing deadline, regardless of whether the individual has a tax liability to pay or not.
Angela MacDonald, HMRC’s director general of customer services, said:
‘Each year we’re making it easier and more intuitive for our customers to complete their tax return, but each year we still come across some questionable excuses, whether that’s blaming a busy touring schedule or seeing aliens.’
Here are some of the recent excuses:
- I couldn’t file my return on time as my wife has been seeing aliens and won’t let me enter the house.
- I’ve been far too busy touring the country with my one-man play.
- My ex-wife left my tax return upstairs, but I suffer from vertigo and can’t go upstairs to retrieve it.
- My business doesn’t really do anything.
- I spilt coffee on it.
HMRC have also released details of some of the weirdest expense claims which include:
- A three-piece suite for my partner to sit on when I’m doing my accounts.
- Birthday drinks at a Glasgow nightclub.
- Vet fees for a rabbit.
- Hotel room service – for candles and prosecco.
- £4.50 for sausage and chips meal expenses for 250 days.
If you have any queries on tax matters please contact us.
Internet link: GOV.UK news
Tax-free childcare roll out
The implementation of Tax-Free Childcare, the new government scheme to help working parents with the cost of childcare, is being rolled out to eligible parents in stages.
The scheme first made its debut in April 2017 and although there have been initial systems problems, HMRC’s aim is to have the scheme open to all eligible parents by 14 February 2018. Application is made online through the Childcare Choices site www.childcarechoices.gov.uk and applications can be made for all eligible children at the same time.
Under Tax-Free Childcare, for every £8 the parent pays, the government provides a £2 top-up, to a maximum of £2,000 per child each year – with a higher limit of £4,000 for disabled children. This gives a total childcare pot of £10,000, or £20,000 for disabled children. To be eligible, parents must generally have minimum weekly earnings of at least £120 each. There is also an upper earnings limit of £100,000.
Compensation may be available in certain circumstances where a parent:
- is unable to complete an application for Tax-Free Childcare
- is unable to access their childcare account
- or doesn’t get a decision about whether they are eligible, without explanation, for more than 20 days.
Those employing a nanny should be able to use the childcare account to pay their PAYE tax and National Insurance. Delays in getting this system working may also give grounds for compensation. Application is made online GOV.UK childcare-service-compensation
Internet link: GOV.UK childcare under 9s
HMRC halts thousands of scam text messages
HMRC have announced that they have stopped thousands of taxpayers from receiving scam text messages ‘with 90 percent of the most convincing texts now halted before they reach their phones’.
HMRC’s press release states:
‘Fraudsters alleging to be from HMRC send text messages to unsuspecting members of the public. In these messages they will make false claims, such as suggesting they are due a tax rebate. Messages will usually include links to websites that harvest personal information or spread malware. This can in turn lead to identity fraud and the theft of people’s personal savings.’
HMRC have confirmed that they will never contact taxpayers who are due a tax refund by text message or by email.
HMRC’s Director of Customer Services, Angela MacDonald, said:
‘HMRC is focused on becoming the most digitally advanced tax authority in the world, and a big part of that relates to keeping our customers safe from online scammers.’
‘As email and website scams become less effective, fraudsters are increasingly turning to text messages to con taxpayers. But as these numbers show, we won’t rest until these criminals are out of avenues to exploit.’
‘We have made significant progress is cutting down these types of crime, but one of the most effective ways to tackle it is still to help the public spot the tell-tale signs of fraud.’
To read details of the measures taken by HMRC and other advice on spotting fraud visit the link below.
Internet link: GOV.UK scam-text-messages
Updated list of professional subscriptions
Employees are allowed to claim tax relief on their annual professional fees or subscriptions to some HMRC approved professional organisations. The costs are tax deductible generally where the individual must have membership to do their job or it is helpful for their work. Where the fees are paid by the individual’s employer this will not generally result in a benefit in kind charge.
HMRC have updated the list of approved bodies which also includes not only details of the professional bodies that are approved but details of qualifying annual subscriptions for journals.
Internet link: GOV.UK/professional-bodies
What will the Spring Statement bring?
We had two Budgets in 2017 and the Spring Statement is planned for Tuesday 13 March. The Chancellor Philip Hammond has previously stated that at the Spring Statement he will respond to the Office for Budget Responsibility forecast, consider longer-term tax challenges and start consultations on how they can be addressed. The government has the option to make immediate changes to tax policy at the Spring Statement if the economic circumstances require it.
The revised timetable of an Autumn Budget followed by a Spring Statement means changes to the legislative timetable which are set out in the link below.
We will keep you informed of pertinent Spring Statement announcements.
Internet link: GOV.UK new budget timetable
Scotland revise income tax bands
Derek Mackay, Scottish Finance Secretary, has made a change to the proposed Scottish income tax bands for 2018/19 which he announced in December 2017 in the Scottish Draft Budget.
The change is being made to ‘remove an anomaly that meant some higher rate taxpayers saw their bills fall while others on slightly lower incomes saw a rise, due in part to changes in the personal allowance’.
Scottish taxpayers income tax rates on income other than savings and dividend income are now expected to be as follows:
|Scottish Bands||Band name||Scottish Rate|
|Over £11,850 – £13,850||Starter||19%|
|Over £13,850 – £24,000||Basic||20%|
|Over £24,000 – £43,430||Intermediate||21%|
|Over £43,430 – £150,000||Higher||41%|
Confirming the changes during the Stage 1 of the Budget debate, Mr Mackay said:
‘As a parliament of minorities, we must work across the chamber to find compromise and consensus in order to give support, sustainability and stimulus to our economy and to our public services …. Our changes to tax ensure Scotland has a progressive tax system – with 70% of taxpayers paying less next year than they do currently and 55% paying less than they would across the rest of the UK – while businesses benefit from support for investment.’
Internet link: GOV.SCOT/news
This material is published for the information of clients. It provides only an overview of the regulations in force at the date of publication, and no action should be taken without consulting the detailed legislation or seeking professional advice. Therefore no responsibility for loss occasioned by any person acting or refraining from action as a result of the material can be accepted by the authors or the firm. Please contact us for further information.