Penalty For Accidental Late Submissions A Thing Of The Past?

www.greenandco.comThe initial £100 penalty for late submission of self-assessment tax returns could be abolished under new Government plans. Under the current system, which has been in place for the last 20 years, someone who files their return 24 hours later than the midnight deadline, will pay as much of a penalty as someone who is up to 12 weeks late.

HMRC admits that the current way of dealing with late submissions is punishing the honest tax payers who miss by a day as either a simple mistake or an ‘uncharacteristic failure’.

One of the radical new ideas being considered by HMRC is whether to implement a penalty point style system, such as is currently being done with motoring penalties. This would be designed in a better way to punish the repeat offenders, rather than those who make a one-off error.

HMRC themselves admit that there is no distinction being made between the customers who miss by a day, and those who make no attempt to comply at all.

The proposals could mean thousands of taxpayers who fail to file their self-assessment forms on time each year could escape a financial penalty.

Prior to the 31st January deadline for online self-assessment tax returns for 2013-14, 10.2 million returns were filed on time, but 890,000 were overdue.

Chas Roy-Chowdhury, of the Association of Chartered Certified Accountants, said the existing penalties were an unjust source of income for the Government. He said “We seem to have lost sight of the fact that the taxpayer is the unpaid administrator of tax compliance and we should be looking to smarter ways of dealing with late filers.”

Please note: This article is a commentary on general principles and should not be interpreted as advice for your specific situation.

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Deadline Dates – April 2015

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1 April 2015

  • Payment of corporation tax liabilities for SMEs account period ended 30 June 2014 where payment is not made by instalments.
  • Reduction in main rate of corporation tax to 20%. Small profits rate is abolished except for ring-fence profits.
  • Change to emission thresholds for business cars (zero rate ends).
  • Application to defer Class 2 or 4 NICs for 2014/15 or claim exception for 2015/16.
  • Multiple contractors to advise HMRC that they wish to be treated as a single contractor for 2015/16.

5 April 2015

  • 2014/15 tax year-end.
  • Ensure personal allowances, exemptions and tax bands are efficiently used.
  • Deadline to pay previously unpaid Class 3 NICs for 2008/09.

6 April 2015

  • Start of the 2015/16 tax year. Ensure payroll and other systems are updated.
  • Personal allowances increased to £10,600.

7 April 2015

  • Electronic filing and payment of VAT liability for quarter ended 28 February 2015.

14 April 2015

  • Forms CT61 for quarter ended 31 March 2015.
  • Quarterly CT instalment for large companies (depending on accounting year-end).
  • EC sales list deadline for monthly paper return.

19 April 2015

  • Payment of PAYE/CIS liabilities for month ended 5 April 2015 if not paying electronically.
  • Payment for PAYE liability for quarter ended 5 April 2015 if average monthly liability is less than £1,500.
  • File monthly CIS return.

21 April 2015

  • File online monthly EC sales list.
  • Submit supplementary intrastate declarations for March 2015.

22 April 2015

  • PAYE liabilities should have cleared HMRC’s bank account.

30 April 2015

  • Companies House should have received accounts of private companies with 31 July 2014 year-end and plcs with 31 October 2014 year-end.
  • HMRC should have received Corporation Tax Self A returns for companies with accounting periods ended 30 April 2014.

If you have any questions regarding these deadlines, please contact us.

Please note: This article is a commentary on general principles and should not be interpreted as advice for your specific situation.

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For Richer or Poorer – The New Marriage Allowance

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Married couples and civil partnerships can now register their interest in the new Marriage Allowance which comes into effect from 6 April 2015. This is separate from the existing Married Couples Allowance which is already available to the over 80’s.

The allowance means that an individual whose total income is below the tax threshold (i.e. £10,600 for 2015/2016) can transfer up to £1,060 of their personal allowances to their spouse or civil partner, saving a possible £212 in tax over the year.

The rules state that the spouse or civil partner receiving the extra allowance must not already be paying higher rate tax, and both parties must have been born after 6 April 1935. The transfer of allowance will be operated through the recipient’s tax code.

The move is intended to support the Government’s belief in traditional family values and an acknowledgement of the role marriage can play in their restoration. Whilst the allowance is not available to unmarried couples (regardless of how long they have been co-habiting), it remains to be seen whether we will witness a rush to the altar to take advantage of the new tax break.

You can register your interest at gov.uk/marriage allowance or contact us for more information.

Please note: This article is a commentary on general principles and should not be interpreted as advice for your specific situation.

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Nick Park analyses the Budget on BBC Radio Wales

To find out what other announcements were made in  the Chancellor’s Budget, read our Budget Summary.

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Budget 2015 and 2015/16 Tax Tables

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Our updated Tax Tables are available here – find out what the new rates mean for you.

If would like to  read our summary of the 2015 Budget, then please follow this link: Budget Summary 2015

The main issues include:

Farmers averaging – Farmers will be able to average their profits over five years instead of just two from April 2016.

Employer’s national insurance allowance – The employer’s national insurance allowance of £2,000 has been extended to 2015/16. Make sure you claim this on your payroll.

Help to Buy ISA – A new Help to Buy ISA will be introduced with the government providing a £50 bonus for every £200 of monthly savings up to a maximum of £3,000 on £12,000 of savings. The aim is to start the scheme from Autumn 2015.

Deeds of variation – The government will review the use of deeds of variation for inheritance tax planning.

For more tips, refer to the ‘think ahead’ boxes of our guide.

Please contact us if you need more information on these changes, or any other matter.

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Shared Parental Leave

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New legislation came into force on 1 December 2014 regarding the statutory pay and leave entitlements available to employed parents. The changes will afford couples greater flexibility and give women the option to end their maternity leave early if they would prefer to share it with their partner. After a compulsory two week recovery period for the birth mother, 50 weeks Shared Parental Leave and 37 weeks’ pay is available to eligible parents of babies due on or after 5 April 2015.

This leave can be split in up to three separate blocks instead of taking it all in one go, as long as it is taken before the child’s first birthday. The same rules also apply to couples matched or placed for adoption. However, the government has allowed individual employers to decide whether to extend enhanced maternity pay to all new parents taking shared parental leave.

The government has said that at least 285,000 working couples would be eligible to share leave under the new rules. If both parents are eligible, the leave can be taken at different times, or even both at the same time. We all know how much of a handful newborns can be!

Please note: This article is a commentary on general principles and should not be interpreted as advice for your specific situation.

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HMRC To Abolish Employer’s National Insurance Contributions For Under 21s

www.greenandco.comFrom 6 April 2015 employer’s will no longer have to pay class 1 secondary national insurance contributions (NIC) for employees under 21, whose earnings are below the upper secondary threshold.

Under the current regime class 1 secondary NICs are due, from the employer, on payments made to employees in excess of the secondary threshold at the applicable percentage (for the tax year in question). The secondary threshold for 2015-16 is £156 per week, or £676 per month, and the employer’s NIC rate is 13.8%. So, for example, if an employee earns £1,200 per month in 2015-16, then the employer’s class 1 secondary NICs due on this salary is approximately £72.31 per month, or £867.72 per year. For those employees aged 21 and over, this will still be due.

For those employees who are under 21 and lucky enough to earn in excess of the upper secondary threshold (UST), then employer’s NICs will be due on those earnings in excess of the UST at the applicable rate. The UST for 2015-16 is £815 per week.

This new ruling does not apply to class 1 primary national insurance contributions, that are due from the employee. So, for those employees who are over 16 and who earn in excess of the primary threshold, employee’s class 1 NICs will still be payable at the applicable rate.

Also, the zero rate won’t apply to class 1A NICs, which are due on any benefit you provide to your employees by reason of their employment.

Should you require any further guidance please contact your payroll provider or Green & Co Accountants.

Please note: This article is a commentary on general principles and should not be interpreted as advice for your specific situation.

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