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July 2017 Newsletter

We are now in the middle of July and the weather is getting warmer. HMRC are getting hotter at chasing taxpayers who pay late, so don't forget to make any payments due by the end of the month on time to avoid interest charges.

The deadline for renewing tax credit claims is 31 July

The deadline for renewing tax credits is 31 July 2017. All those claiming working tax credit (WTC) and/or child tax credit (CTC) should check what action they may need to take.

The renewal process does two things: it gives HMRC the information to finalise tax credit awards for last year, 2016/17, and it renews the claim for the current year, 2017/18.

Anyone who claimed tax credits in 2016/17 should have been sent a renewal pack and most people will need to respond to HMRC. Even if you do not intend to renew your claim for the current year, you must still make sure HMRC has correct information on your 2016/17 income and circumstances in order to finalise last year's award.

If you need any help with your claim or details of figures to enter please let us know.

Making Tax Digital (MTD)

At last we have some good news concerning the timetable for introducing MTD. This was originally due to be introduced in April 2018 and despite lobbying from many sides, including the Treasury Select Committee, the Revenue had seemed intent on sticking to this deadline. The Paymaster general has now announced a new timetable and also watered down version of MTD. Under the revised timetable:

  • Only businesses with a turnover above the VAT threshold (currently £85,000) will have to keep digital records and only for VAT purposes
  • They will only need to do so from April 2019
  • Businesses will not be asked to keep digital records or to update HMRC quarterly for other taxes until at least April 2020
  • Small businesses will be able to file digitally on a voluntary basis for other taxes

Some sense at last.

Tax avoidance schemes

The Supreme Court decided against Glasgow Rangers and in favour of H M Revenue & Customs in a case about the use of Employee Benefit Trusts to reward employees and save PAYE and National Insurance. The fortunes of Glasgow Rangers do not matter to most of us but the point is that the case with the Revenue has been ongoing for a number of years and it highlights how unclear tax law can be. All of the newspaper headlines were about the original decision (in favour of the Revenue) but there have been hearings at five different legal hurdles in total and the final result is 3-2 to the Revenue.

HMRC is extending two step verification to the self employed

HMRC have introduced additional security for some self assessment taxpayers filing their own tax returns using HMRC online software and the government gateway. As well as needing their user ID and password some taxpayers are now asked to link their mobile phone with these log-in details. Once this service is activated HMRC texts a code to the taxpayer's mobile phone each time they log in-this code is then needed to proceed.

This additional security was initially provided to self assessment taxpayers who were not self employed. It is being extended to more self assessment taxpayers. This extension is to those who are self employed, but who are not registered for any other tax. Two step verification will be optional at first but will become compulsory.

Once registered, if a taxpayer loses their mobile phone or changes their number, they will need to phone HMRC's online services helpdesk to deactivate the old phone number and will then be asked to re-register the next time they log in.

Have you used the new security? Do you agree with it or do you regard it as a nuisance. The professional bodies are asking for user's opinion, so if you have an opinion please let me know and I can forward it on.

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