HMRC has issued a warning to be on high alert for scams linked to Winter Fuel Payments after receiving 15,100 reports of bogus activity in June.

Fraudsters have been targeting vulnerable individuals using SMS messages and phishing websites. During June, HMRC took action to remove 4,600 fake websites linked to Winter Fuel Payments.

HMRC is urging individuals to be alert to suspicious communications and to report any suspect phone calls, emails or texts via GOV.UK. HMRC will never contact people by text to claim Winter Fuel Payments or request personal information.

Anyone who is eligible for Winter Fuel Payments will receive the payments automatically without having to make a claim. Any recovery of the payment for pensioners whose total income is over £35,000 will be collected via Pay As You Earn (PAYE) or self assessment, dependent on how the individual pays tax on their income.

Kelly Paterson, HMRC’s Chief Security Officer, said:

‘Don’t be fooled by these attempts by scammers to take your money or access your personal information.

‘Never let yourself be rushed. If someone contacts you saying they’re HMRC, wanting you to urgently transfer money or give personal information, be on your guard. If a phone call, text or email is suspicious or unexpected, don’t give out private information or reply, and don’t download attachments or click on links.

‘I’m urging people to be alert to scams relating to Winter Fuel Payments and to report any suspicious texts, phone calls or emails to HMRC.’

Internet link: HMRC

Inheritance Tax (IHT) on pensions is the most unpopular of the tax raising measures introduced by the Labour government during its first year, according to a survey.

The survey conducted by investment platform AJ Bell found that 44% of respondents were opposed to the pension IHT proposals while only 21% supported them.

Other measures were also strongly opposed, including the decision to raise employer National Insurance contributions (NICs), with 41% against the tax rise and just 24% in support. Raising rates of Capital Gains Tax (CGT) and restricting IHT relief available to farmers were also unpopular.

However, some tax raising policies attracted net support with 48% in favour of raising the rates of stamp duty on second homes.

Tom Selby, AJ Bell’s Director of Public Policy, said:

‘This data shows tax rises of every shade are divisive. While some tax increases attract a balance of support, they still divide the room.

‘Nothing that emerged from Rachel Reeves’ red box over the last year enjoys support from a majority of voters, illustrating that even less controversial tax changes are still politically fraught.

‘IHT is often described as the most hated tax and this data backs that up. Proposals to subject unused pensions funds to IHT on death are the most widely opposed of all the tax raising measures announced so far.

‘We’re urging the chancellor to instead consider alternative proposals which would be fairer and simpler, without undermining her plan to tax unused pensions on death.’

Internet link: AJ Bell

The government should take a more strategic approach to tax policy, consulting earlier and giving greater thought to the design of the tax system, says Nichola Ross Martin, President of the Chartered Institute of Taxation (CIOT).

In her inaugural speech as CIOT President, Ross Martin said that making a success of MTD will need HMRC and tax professionals to continue to work closely together.

She also promised to continue to press for improvements to HMRC service levels over the year ahead.

The CIOT President also encouraged the government to consider introducing a statutory employment test

In addition, she urged Institute members and employers to feed into a review of the Chartered Tax Adviser (CTA) qualification.

Ms Ross Martin said:

‘While there is plenty of argument about rates and burdens in parliament, there is very little about reform and design.

‘Take employment taxes. The PAYE system is the government’s main breadwinner. Successive governments have tweaked the rates and thresholds for national insurance but paid rather less attention to the fundamental issues as to how tax policy might adapt to cope with the changing world of work.

To pose these questions is not to argue for an ‘everything everywhere all at once’ approach to tax. But it is to point out that there is more to tax policy than rates and thresholds. Strategy is crucial.’

Internet link: CIOT

The tax gap estimate was 5.3% for the 2023/24 tax year, according to the latest data from HMRC.

The tax gap is the difference between what tax is expected to be paid and actually paid.

HMRC collected £829.2 billion in the 2023/24 tax year representing 94.7% of all tax due, leaving £46.8 billion unpaid.

However, HMRC revised the figures upwards for 2022/23, from 4.8% (£39.8 billion) to 5.6% (£46.4 billion). It also warned that the latest figures may be revised as more data becomes available.

Some of the key findings from this year’s calculations show:

• Small businesses represent the largest proportion of the tax gap (60%).
• Corporation Tax accounts for 40% of the total tax gap.
• Failure to take reasonable care (31%), error (15%) and evasion (14%) are among the main behavioural reasons for the overall tax gap.

Ellen Milner, Director of Public Policy, said:

‘These figures show the stubbornness of the tax gap and how optimistic the government’s target of a £7.5 billion reduction by 2029/30 is.

‘While large businesses and wealthy individuals are often accused of not paying enough tax these figures suggest that their total share of the tax gap is not much more than a quarter of that of small businesses.

‘The small business figures reflect big upward revisions from HMRC a year ago as a result of a random enquiry programme carried out in 2020/21, which identified greater inaccuracy and non-compliance than previously forecast.’

Internet link: HMRC press release CIOT

The UK government is aiming to slash energy prices, unlock investment and upskill the workforce in its Industrial Strategy.

The government says the Industrial Strategy was developed in partnership with business and includes targeted support for the areas of the country and economy that have the greatest potential to grow.

It says it will slash electricity costs by up to 25% from 2027 for electricity-intensive manufacturers in growth sectors and foundational industries in their supply chain.

The government says it will unlock billions in finance for innovative business, especially for SMEs by increasing British Business Bank financial capacity to £25.6 billion.

Finally, it has pledged to upskill the nation with an extra £1.2 billion each year for skills by 2028/29.

Alex Veitch, Director of Policy at the British Chambers of Commerce (BCC), said:

‘Attracting and retaining people with the right skills is crucial for business, and a fundamental part of driving economic growth.

‘We are pleased the government has listened to our calls and put skills at the heart of the Industrial Strategy. The extra cash investment for training in key sectors, such as defence and engineering, has the potential to be a real springboard for growth.

‘Further action is needed on skills, including more flexibility in the Growth and Skills Levy and a commitment to Local Skills Improvement Plans across England, many of which are successfully led by Chambers.

‘This week’s Industrial Strategy must provide an ambitious long-term plan to drive forward investment and growth through businesses across the UK.’

Internet link: GOV.UK  BCC