Wednesday, 13 October 2021

HMRC Has Ground To a Halt

HMRC is doing its best to destroy small businesses because of crippling delays, which have resulted in rebates going unpaid for months on end.

HMRC is taking several months to process post and deal with issues that should take weeks under normal circumstances.

Taxpayers are missing out on large refunds, which has severely impacted businesses’ cash flows. Accountants said the tax authority had “ground to a halt”.

Experts said the large numbers of HMRC staff working from home was likely to blame, as well as the clampdown on furlough fraud which they said had resulted in more taxpayer requests requiring additional verification.

Myelin Verboom of tax firm Mcas said one of her clients was still waiting on a six-figure payment. Her business could go bust if it did not receive the money soon, she warned.

“We have a property developer who bought a block of buildings, incurring a £250,000 VAT bill which was deductible. They have been trying to claim it back but the delays are so bad they have not even been able to register their business to pay the levy.
There is a real risk these delays will end up pushing firms out of business because of the cash flow problems they are causing.”

Stuart Crofton of accountancy firm Stuart Crofton Tax said anything that required human intervention was taking longer than normal.

“I have one rebate of £50,000 still outstanding which we applied for in April. It is a massive loss for our clients. While HMRC will handover the paltry 0.5pc or so in interest the refund has accrued whilst it has sat in the tax office’s accounts, it pales when compared to the returns they could have enjoyed investing that money in the FTSE” .

HMRC aims to refund overpaid VAT within 30 days. However, its turnaround times have lengthened significantly since the start of the pandemic.

Two thirds of letters addressed to HMRC went unanswered for more than two weeks in April and performance levels are still low, as the above chart shows.

Lisa Styles of Hespera, another tax firm, said even simple tasks such as registering for self assessment were taking far longer than normal, meaning newly self-employed people faced being fined for late filing or tax payments next year.

If someone became self-employed last year and needed to register as self-employed to file their return and pay tax by January 31, the deadline to do this was October 5. But delays mean some are being told they will not be added to the system until March 2022, accountants said.

Ms Styles said part of the backlog was down to a higher number of fraud checks than normal. HMRC has been tasked with recovering billions lost to fraudulent furlough claims. Higher numbers of staff are now working away from the office, after new rules allowing staff to work from home two days a week were introduced.

Self assessment services were also impacted after 5,000 staff were seconded to provide Covid-19 support during the crisis, although service levels in that department have since recovered to more normal levels, according to tax office sources.

A spokesman for HMRC said:

“We know there is more to do to improve turnaround on customer correspondence, and we expect to see further improvements as we emerge from the pandemic and continue to rebalance how we prioritise our resources.”

Tell that to the people whose livelihoods you have destroyed because of your delays!

Tax does have to be taxing.

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Monday, 11 October 2021

HMRC Staff Return To The Office for One Day a Week

Public Technology reports that HMRC has begun its return to the office, although staff across the department will continue to work remotely for four days a week, on average.

In an all-staff memo sent last week, permanent secretary Jim Harra said more than 16,000 staff who had been working from home during the coronavirus pandemic had returned to offices by the end of September. They included 4,300 staff who had come into the office for the first time in the week leading up to the memo.

He said that by the end of last week, he expected “all colleagues in England and Scotland who have been temporarily working from home during the pandemic, will have agreed a plan with their line manager to return to the workplace for an average of one day a week, using the discussion toolkit”.

Those returning join around 4,000 HMRC staff who have been working from offices during the pandemic. Those civil servants are considered key workers and could not do their jobs remotely.

Staff in Wales and Northern Ireland should continue to work from home, he said.

“I trust that in the coming weeks many of you will have the chance to re-connect face to face with your colleagues and enjoy a taste of office life again,” he said.

Harra said the expected one-day-a-week return “won’t be the same for everyone”.

“Depending on your personal circumstances, you may need more support in making arrangements, so it’s really important that you talk to your manager about what is right for you,” he said. He said National Inclusion Week, which fell on the same week as his message, was a “real reminder to us all to continue to be respectful, kind and inclusive towards each other as more of us return to our offices”.

The perm sec said he expected there will be “teething problems” as the number of staff working from HMRC’s buildings increases.

“Please help your estates colleagues and location leads, who are doing an excellent job of coordinating all this for us, by reporting any issues that you see, and being patient as we move to our new arrangements,” he said.

The returns process and the toolkit Harra mentioned has been agreed with unions.

The PCS union has told its members they should only return if HMRC meets its agreed criteria to have a plan in place with their line manager, and if it is suitable for their individual circumstances.

“PCS's advice is clear: the discussions between jobholders and managers must happen, so that any concerns about returning can be identified. Where it is not yet possible to establish a set date when you will start working in the office, you can continue to work from home; and you should agree with your manager when during the coming weeks, the situation will be reviewed,” the union said.

It added that union reps have “reiterated to the department that any attempt to force members back to the office would be unacceptable”.

“For its part, HMRC has given a commitment to working with staff, to take reasonable steps to address their concerns and to support them to return. We’ve agreed with HMRC that any concerns arising from the agreed process and procedures will be escalated and resolved,” it added.

Harra’s email came the same week the coronavirus furlough, self-employment support scheme and sick pay rebate schemes came to an end.

“I wanted to take a moment to say thank you to everyone for enabling the department to deliver these schemes so brilliantly, whether you have worked directly on the schemes or held the fort on our usual work,” Harra said.

He said civil servants’ “hard work and commitment” had helped to protect 11.6 million jobs and directly supported 2.9 million self-employed people across the UK.

“I am deeply proud of your dedication and the huge scale of what we have been able to deliver together for individuals and businesses – so, thank you,” he added.

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Monday, 4 October 2021

HMRC To Review The Pandora Papers

The thing that the Guardian accuses the Blairs of benefiting from - avoiding stamp duty on a transfer of property - is exactly what the Guardian did with its Caymans holding company. Even the excuse, that another party in the deal insisted, is the same.
— Media Guido (@MediaGuido) October 4, 2021

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Thursday, 23 September 2021

MTD Delayed

Statement made by

Lucy Frazer

The Financial Secretary to the Treasury

Conservative

South East Cambridgeshire

Commons

Statement

The Government has set out an ambition to become one of the most digitally advanced tax authorities in the world.

Making Tax Digital (MTD) is the first phase of our move towards a modern, digital tax service fit for the 21st century. It supports businesses through their digitalisation journey and provides a digital service that many have come to expect in their everyday lives. MTD helps businesses reduce common errors in their tax affairs and allows for better customer interaction and guidance through digital prompts and nudges.

Since the introduction of MTD for VAT in 2019, over 1.5m businesses have joined and many are already experiencing benefits. MTD users are reporting that preparing and submitting returns is easier, and that MTD has increased their confidence in managing tax affairs and using technology. MTD also puts businesses on a path to further digitalisation: integrating tax management with a range of business processes can contribute to productivity gains.

During the pandemic, UK businesses increasingly turned to digital tools to communicate remotely and work collaboratively. Businesses adapted rapidly to the challenges posed by the pandemic, using digital solutions to maintain resilience and reduce disruption.

Over the past year, HMRC have worked closely with partners in the business and tax communities on the proposed design and scope of MTD for Income Tax (ITSA).

Today the Government has laid Regulations in Parliament to help those impacted by the changes to prepare, and for their representatives to develop their own support and guidance.

The Government recognises the challenges faced by many UK businesses and their representatives as the country emerges from the pandemic over the last year. In recognition of this and of stakeholder feedback, we will now be introducing MTD for ITSA a year later, in the tax year beginning in April 2024.

General partnerships will not be required to join MTD for ITSA until the tax year beginning in April 2025. The date at which all other types of partnerships will be required to join will be confirmed later.

In March 2021, the Government announced a new system of penalties for the late filing and late payment of tax for ITSA. This will now be introduced for those who are mandated for MTD for ITSA in the tax year beginning in April 2024, and for all other ITSA customers in the tax year beginning in April 2025.

Alongside the Regulations, HMRC have also today published a Tax Information and Impact Note (TIIN) setting out the projected benefit and cost impacts of MTD for ITSA, as well as a Policy Paper to help different businesses understand what their transition to MTD could look like in more detail.

A later start for MTD for ITSA provides more time for those required to join to make the necessary preparations and for HMRC to deliver the most robust service possible, affording additional time for testing in the pilot.

HMRC will continue to work in close partnership with business and accountancy representative bodies and software developers to ensure taxpayers are well supported as they adopt MTD for ITSA.

The Government has also recently consulted on a reform of the complex basis period rules that govern how self-employed profits are allocated to tax years. Many respondents said that the reform was a sensible simplification but asked for more time to implement the changes. In recognition of these concerns, these changes will not come into effect before April 2024, with a transition year not coming into effect earlier than 2023. The Government will respond to the consultation in due course providing the next steps.

Deal with any correspondence from HMRC
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Monday, 20 September 2021

Less Than 100 Days Until Christmas - Beware Customs Charges!

Tax and customs for goods sent from abroad

Tax and duty

You’ll be contacted by Royal Mail, Parcelforce or the courier company if you need to pay any VAT, duty or delivery charges (‘handling fees’) to receive your goods.

They’ll send you a bill stating exactly which fees you need to pay.

They’ll normally hold your parcel for about 3 weeks. If you have not paid the bill by then, your parcel will be returned to the sender.

You will not have to pay anything to the delivery company to receive goods worth less than £135 unless they’re gifts over £39 or excise goods (for example, alcohol and tobacco).

VAT

VAT is charged on all goods (except for gifts worth £39 or less) sent from:

outside the UK to Great Britain
outside the UK and the EU to Northern Ireland

VAT is not charged on goods that are gifts worth £39 or less.

You pay VAT when you buy the goods or to the delivery company before you receive them. If you have to pay VAT to the delivery company, it’s charged on the total package value, including:

the value of the goods
postage, packaging and insurance
any duty you owe

VAT is charged at the VAT rate that applies to your goods.

Goods worth £135 or less in total

If you bought the goods yourself and they are not excise goods, the seller will have included VAT in the total you paid.

You will need to pay VAT to the delivery company if the goods are:

gifts sent to you by someone else and worth more than £39
excise goods

Goods worth more than £135 in total

You will have to pay VAT to the delivery company either before the goods are delivered or when you collect them.

Customs Duty

You’ll be charged Customs Duty on all goods sent from outside the UK (or the UK and the EU if you’re in Northern Ireland) if they’re either:

excise goods
worth more than £135

If you’re charged Customs Duty, you’ll need to pay it on both:

the price paid for the goods
postage, packaging and insurance

Type and value of goods	Customs Duty
Non-excise goods worth £135 or less	No charge
Gifts above £135 and up to £630	2.5%, but rates are lower for some goods - call the helpline
Gifts above £630 and other goods above £135	The rate depends on the type of goods and where they came from - call the helpline

You pay Customs Duty on excise goods of any value.

Excise Duty

If you’re sent alcohol or tobacco from outside the UK, you’ll be charged Excise Duty at current rates.

If the goods are sent from the EU to Northern Ireland, check that the Excise Duty was included in the price. If it’s not, your goods may be seized.

It does not matter whether you buy the goods or they’re sent as a gift.

If you receive large amounts of alcohol or tobacco for your business, use the Trade Tariff to check duty rates.

Your goods can also be seized if they’re:

spirits over 35 centilitres without a UK duty stamp
cigarettes or hand-rolling tobacco without UK health warnings or fiscal marks

If you’re charged too much or return your goods

Ask for a refund of VAT or Customs Duty if you:

return your goods
think you’ve been charged too much

Download and fill in:

form BOR 286 if Royal Mail or Parcelforce delivered the goods
form C285 if a courier or freight company delivered the goods

Deal with any correspondence from HMRC
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Appeal to the First-tier Tribunal or Upper Tribunal
Having the security of knowing that fees will be met in full will enable your Accountant (your tax return agent) to defend your position robustly

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Friday, 17 September 2021

The Plastic Packaging Tax - Not an April Fool's Joke!

The plastic packaging tax comes into force on 1 April 2022. @HMRCgovuk has published additional support for businesses that manufacture and import packaging to help them understand whether they need to register and if they are liable.

Read > https://t.co/bfAcIOgFmO pic.twitter.com/W47phJezpp
— ICAEW Tax Faculty (@ICAEW_Tax) September 17, 2021

Deal with any correspondence from HMRC
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Appeal to the First-tier Tribunal or Upper Tribunal
Having the security of knowing that fees will be met in full will enable your Accountant (your tax return agent) to defend your position robustly

Please click here for details.

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