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Tax Update Bulletin - May 20071) 2005/06 Employer Annual Returns Interim penalties were issued some 9 months after the filing deadline for these returns in March 2007. This is where the Revenue had finally decided they had not received P14’s, P35’s or CIS 36’s and typically rendered many thousands of £900 penalties per employer, as the penalty is £100 per month for late returns. It has transpired that a number of these penalties may well have been issued in error and HMRC has said that if evidence can be produced to show that they were submitted on time, then appeals would be considered. However, HMRC are still sending out further penalty notices from 21 May 2007, where 2005/06 employer annual returns and contractor returns are still outstanding. 2) 2006/07 Employer Annual Returns The filing of these on line by 19 May 2007 in a complete form should ensure that the £150 online incentive will be paid or credited from HMRC. 3) Self Assessment tax returns year ended 5 April 2007 HMRC have experienced some delay in the bulk issue of these returns to taxpayers and therefore many will not be received until May 2007. HMRC have apologised for this but they have not given any extension to the filing deadline, so that these returns still need to be filed by 31 January 2008 to avoid penalties for late submission. The forms should normally be issued by HMRC on 6 April 2007 and therefore there is an effective shortening of the available time to complete the forms, once in the possession of the taxpayer. 4) Off-Shore disclosure facility HMRC have offered a reduced penalty regime where voluntary disclosure is given in respect of off-shore income which should have been notified to them in the past. Notification must be given to HMRC by 22 June 2007 and full disclosure and payment of the tax by 26 November 2007. This offer by HMRC has been made following their various successes in the ability to obtain details of overseas accounts from major banks. The main benefit will be to attract a maximum 10% penalty on the interest and tax that is due and HMRC have said that if they do subsequently discover undisclosed income then they will endeavour to issue much higher penalties. 5) Board and lodgings tax adjustments After much discussion, HMRC have recommended a reversion to the original schemes that were in place, whereby local arrangements are made with local HMRC tax offices and these are applied to businesses within those areas. These board and lodging tax adjustments are designed to simplify the tax adjustment required to reflect the private use of expenses, normally in the cases of businesses within the holiday trade. 6) CIS on-line 2007/08 HMRC have indicated that they will apply a light touch in the first 6 months to the administration of the scheme, but having said that the gross payment status is risked if filing is late 3 times during a 12 month period, given this is a monthly filing arrangement. 7) Further strike day PCS members, including HMRC were called on strike again on 1 May 2007, this is the second such strike, the first being on 31 January 2007. 8) HMRC Powers On 17 May 2007, consultation documents were published, whereby HMRC are trying to align their powers up to the level of the old Customs and Excise, which includes the ability to visit business premises unannounced, where businesses operate from home. No doubt, responses to the consultation document from the profession will be against. HMRC normally indicate that they will only use such powers in extreme circumstances, where they feel this is appropriate but this would represent yet more power to their elbow, which could in theory, apply to anyone working from home. |
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