The Chancellor of the Exchequer, Philip Hammond, has announced that the government will respond to the forecast from the Office for Budget Responsibility (OBR) in the Spring Statement on Wednesday 13 March 2019.
The Chancellor may take the opportunity to announce tax changes and consultations.
We will update you on pertinent announcements.
Internet link: GOV.UK news
HMRC has revealed some of the most ‘bizarre excuses’ taxpayers have given for failing to file their self assessment tax return on time.
Excuses included ‘I’m too short to reach the post box’, and ‘my boiler had broken and my fingers were too cold to type’. One taxpayer claimed that a junior member of staff ‘forgot to wear their glasses’, and accidentally registered a client for self assessment. Another told HMRC that their mother-in-law was a witch, and that she had put a curse on the taxpayer, which prevented them from filing their tax return on time.
In addition to these excuses, HMRC also stated that, every year, they receive some unconvincing expenses claims.
One individual attempted to claim £40 for ‘extra woolly underwear’, whilst another taxpayer tried to claim £756 for pet insurance. Meanwhile, a carpenter attempted to claim £900 for a 55-inch TV and sound bar, which he claimed would ‘help him price his jobs’.
HMRC Director General of Customer Services, Angela MacDonald, said:
‘Help will always be provided for those who have a genuine excuse for not submitting their return on time, but it’s unfair to the majority of honest taxpayers when others make bogus claims.’
HMRC stated all these excuses and claims were unsuccessful.
The deadline for sending 2017/18 Self Assessment tax returns to HMRC, and paying any outstanding liabilities, was 31 January 2019. If you have not yet filed your return please contact us for assistance.
Internet link: GOV.UK news
HMRC has extended its Making Tax Digital for VAT (MTDfV) pilot scheme to all eligible businesses.
For most businesses, compliance with the regulations is mandated for VAT return periods beginning on or after 1 April 2019. However, MTDfV for some ‘more complex’ businesses has been deferred until 1 October 2019. This deferral applies to: trusts; not for profit organisations not set up as companies; VAT divisions; VAT groups; public sector entities such as government departments and NHS Trusts, which have to provide additional information on their VAT return; local authorities; public corporations; traders based overseas; those required to make payments on account; annual accounting scheme users.
Commenting on the pilot scheme, Clare Sheehan, Deputy Director for MTD for Business, said:
‘The MTD pilot is now available to all businesses who will need to use the service from April. This marks a significant milestone towards our delivery of a modern tax administration.’
‘We encourage all eligible businesses to join and try out the service before they are mandated to use it.’
HMRC has also confirmed that Brexit will not affect the introduction of MTDfV. In a recent letter, Jim Harra, Deputy Chief Executive of HMRC, wrote:
‘Our system is already live and by the end of February we’ll have written to every affected business, encouraging them to join the thousands of others who have registered.’
Please contact us for help with MTDfV.
Internet link: GOV.UK publications
HMRC is urging VAT-registered UK businesses which trade exclusively with the EU to be prepared for a no deal Brexit.
In a letter sent to 145,000 affected businesses, HMRC explains changes to Customs, Excise and VAT procedures in the ‘unlikely event’ that the UK leaves the EU without a Brexit deal.
HMRC’s letter advises businesses to take three actions ahead of ‘Brexit Day’ on 29 March 2019:
A report jointly published by HMRC and the National Audit Office (NAO) recently revealed that approximately 55 million customs declarations are currently made by British businesses every year. This figure may rise to 255 million when the UK leaves the EU.
HMRC intends to write to businesses in the future in order to instruct them on any additional actions they will need to take, and when. We will keep you informed of developments.
Internet links: GOV.UK publications HMRC letter NAO report
Finance Secretary Derek Mackay delivered the 2019/20 Scottish Draft Budget on Wednesday 12 December 2018 setting out the Scottish government’s financial and tax plans. The announcement had been timed to take place after Chancellor of the Exchequer Philip Hammond delivered the UK Budget on 29 October 2018. The Finance Secretary announced changes to Scottish income tax. Contact us for advice on how the Scottish Budget impacts you.
The government has devolved powers to set the rates and bands of income tax (other than those for savings and dividend income) which apply to Scottish resident taxpayers. The Scottish Budget announced the following income tax rates and bands for 2019/20. These will be considered by the Scottish Parliament, and an agreed Scottish Rate Resolution will set the final Scottish Income tax rates and bands for 2019/20.
The current rates and bands for 2018/19 and the proposed rates and bands for 2019/20 on non-savings and non-dividend income are as follows:
| 2018/19 | 2019/20 | Band Name | Rate |
|---|---|---|---|
| Over £11,850* – £13,850 | Over £12,500* – £14,549 | Starter | 19% |
| Over £13,850 – £24,000 | Over £14,549 – £24,944 | Scottish Basic | 20% |
| Over £24,000 – £43,430 | Over £24,944 – £43,430 | Intermediate | 21% |
| Over £43,430 – £150,000** | Over £43,430 – £150,000** | Higher | 41% |
|
Over £150,000** |
Over £150,000** | Top | 46% |
* assuming the individual is entitled to a full UK personal allowance
** the personal allowance will be reduced if an individual’s adjusted net income is above £100,000. The allowance is reduced by £1 for every £2 of income over £100,000.
The personal allowance is currently £11,850 for 2018/19. The personal allowance for 2019/20 will be £12,500.
The UK higher rate tax point for 2019/20 is set at £50,000 (for those entitled to the full UK personal allowance) and the tax rates for non-savings and non-dividend income have been maintained at 20%, 40% and 45% respectively. The additional rate of 45% is payable on income over £150,000.
For 2019/20 Scottish taxpayers with employment income of approximately £27,000 will pay the same amount of income tax as those with similar income in the rest of the UK. For higher earners, with pay of £150,000, a Scottish taxpayer will pay approximately an extra £2,670 of income tax than those on similar income in the rest of the UK.
Internet link: GOV.SCOT budget
