In this month’s Enews we consider the unbelievable excuses taxpayers make for not filing their self assessment returns on time, consider advice from the Insolvency Service on protecting your pension pot and the latest post-Brexit Customs guidance. With the Making Tax Digital pilot now open to all eligible businesses there are lots of issues to update you on.
Businesses urged to prepare for post-Brexit Customs Declarations
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:
- Register for a UK Economic Operator Registration and Identification (EORI) number.
- Decide whether a customs agent will be used to make import and/or export declarations, or whether declarations will be made by the business via software.
- Contact the organisation responsible for moving goods (for example, the haulage firm) in order to ascertain whether the business will need to supply additional information to complete safety and security declarations, or whether it will need to submit these declarations itself.
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.
MTD for VAT – pilot extended to all eligible businesses
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’s Voice ID database
Since 2017, HMRC has captured millions of callers’ voice data on its Voice ID system by encouraging the caller to say a key phrase instead of the conventional password to gain access to their accounts.
However, non-profit organisation Big Brother Watch warns that people have been ‘railroaded into a mass ID scheme by the back door’ and has reported HMRC to the Information Commissioner’s Office (ICO) on the grounds that it has ‘broken data protection laws’.
A Freedom of Information request revealed almost seven million taxpayers are enrolled in HMRC’s Voice ID database of which 162,185 individuals have opted out and had their biometric data deleted by HMRC.
A spokesperson for HMRC said:
‘Our Voice ID system is very popular with millions of customers as it gives a quick route to access accounts by phone.
All our data is stored securely, and customers can opt out of Voice ID or delete their records any time they want.’
Internet links: https://bigbrotherwatch.org.uk/all-media/hmrc-voice-id-delete/
Spring Statement date announced
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
‘Unbelievable excuses’ for late filing of tax returns
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
Protect your pension pots
The Insolvency Service has urged individuals saving for retirement to protect their pension pots from criminals and ‘negligent trustees’.
Research carried out by the Service found that criminals use a range of tactics to convince savers to part with their funds, including persuading individuals to access their pension and invest in unregulated schemes.
Pension scam victims lost an average of £91,000 to criminals in 2018, according to Financial Conduct Authority (FCA) research. Criminals often use cold-calls and offers of free pension reviews to convince their victims to comply.
The Insolvency Service has urged savers to be wary of calls that come out of the blue; seek financial advice before altering their pension arrangements or making investments; and not be pressured into making decisions about their pension.
Consumer Minister Kelly Tolhurst said:
‘If you are approached to make an investment from your pension, always do your homework and seek independent advice, if necessary, to help you make an informed decision.
‘The government continues to work closely with the Insolvency Service who are working to clamp down on rogue companies targeting vulnerable people.’
Internet link: GOV.UK news