JUNE 2012
19 Employers pay PAYE for month April 2012
22 PAYE electronic payment deadline

The main question to be established first is: are you trading?. Factors to be considered include: do you intend to make a profit, frequency of selling, how you acquired the items you are selling, how long you have owned the items you are selling. There are other things to consider as well and we recommend that you talk to us as soon as possible to determine if you have been trading and therefore failed to pay the correct amount of tax.

By coming forward and making a full disclosure individuals can make a settlement with the Revenue on favourable terms. Most individuals coming forward will face a reduced penalty of 10% under the plan with the maximum penalty set at 20%

To avail of the terms an initial notification needs to be made to the Revenue by 14 June 2012 to advise the Revenue that a disclosure will be made.

The full disclosure must then be made by 14 September 2012 and at the same time payment of any tax, interest or penalties must be made.

Warning: If you fail to use a Revenue Campaign to make a disclosure and the Revenue subsequently finds out you haven’t paid enough tax you could face a penalty up to 100% of the tax owed.

“An electrician is anyone who installs, maintains and tests electrical systems, equipment and appliances under stringent safety regulations”

By coming forward and making a full disclosure individuals can make a settlement with the Revenue on favourable terms. Most individuals coming forward will face a reduced penalty of 10% under the plan with the maximum penalty set at 20%

To avail of the terms an initial notification needs to be made to the Revenue by 15 May 2012 to advise the Revenue that a disclosure will be made.

The full disclosure must then be made by 14 August 2012 and at the same time payment of any tax, interest or penalties must be made.

Warning: If you fail to use a Revenue Campaign to make a disclosure and the Revenue subsequently finds out you haven’t paid enough tax you could face a penalty up to 100% of the tax owed.

HMRC have previously offered Tax Catch Up Plans to Plumbers, Dentists and Tutors amongst others. According to the press release their latest campaigns will target:

‘Missing returns. This will contribute to wider HMRC activity tackling failure to complete tax returns. It will initially focus on those who fail to complete tax returns and who are liable to pay tax at the highest rates.’

‘Home improvement trades. This will build on campaigns aimed at plumbers and electricians, and will include several 100,000 tradespeople in construction and building work such as roofing, window fitting, bricklaying, carpentry and joinery.’

‘Direct selling. This will target customers who ought to be paying tax on income they earn from buying and selling goods direct to others, or from the commission on these sales.’

‘As with previous campaigns, the focus of the new campaigns will be on providing those in the selected groups, who may not be paying the tax they owe, a chance to put their affairs in order on the best possible terms.’

HMRC have announced that they will be using new technology to identify traders in both sectors with unpaid taxes.

Marian Wilson of HMRC said:

‘We are offering all the people targeted the opportunity to come forward. Penalties will be higher if we come and find people after the opportunity.’

If you require any further information on this area, please contact Christine Harrison christine@hannathompson.com or Angela Rooney angela@hannathompson.com

HMRC will now postpone making any new business records check appointments until the revamped approach is launched early in 2012/13. The delay is to allow further consultation with representative bodies on the implementation of the recommendations in the review and on some details of the new approach.

HMRC’s Director of Local Compliance, Richard Summersgill, said:

‘Four out of ten businesses had an issue with their business records, and of those that required a follow-up visit, we found that some 90% subsequently improved their record-keeping.’

‘However, after reviewing the pilot programme and listening to the views of businesses and representative bodies, we acknowledge the need for a fresh approach to business records checks.’

Employers have been aware for some time now that the government is to introduce legislation designed to encourage more people to save for their retirement.

Under the rules employers must:

• ‘auto-enrol’ eligible employees into a pension scheme
• make employer pension contributions for them, and
• make deductions of employee pension contributions from the employees pay.

The rules come into force from October 2012. However they only impact on the largest employers from that date, as few employers have a workforce of more than 120,000. For those employers with a more modest number of employees the start dates have been amended. This was previously announced and has been confirmed in a written ministerial statement.

Steve Webb, the Minister of State, Department for Work and Pensions confirmed:

‘On 28th November 2011, the Government announced that the timetable for the implementation of automatic enrolment will be adjusted so that small businesses are not affected by the reforms during this Parliament. This will provide them with some additional breathing space to prepare for the reforms whilst operating in tough economic times.’

‘I can now confirm that under the revised timeline, all employers with an existing staging date of on or before 1st February 2014 are unaffected. This means that no large employer will have to make any changes to their plans – which are in many cases already advanced.’

Medium sized employers will be re-allocated automatic enrolment dates between 1st April 2014 and 1st April 2015. This means that the implementation dates of some of these employers will be up to nine months later. However, this still means that around 70% of eligible workers will be automatically enrolled before the end of this Parliament compared with around 75% under previous arrangements.’

‘Small employers will be allocated automatic enrolment dates between 1st June 2015 and 1st April 2017.’

The guidance contains a table of revised implementation dates for small and medium employers, by size. We will keep you informed of further announcements.

For more information on employers’ obligations please do not hesitate to contact us.

In the period since the Budget in March a number of consultation papers and discussion documents have been published by HMRC. Draft legislation relating to many of these areas will be published on 6 December 2011. Click on the link below for a summary of these proposals.

Autumn Statement 2011

The Tax Catch Up Plan (TCUP) is aimed at individuals who provide private lessons, or who profit from tuition and coaching, as a main or secondary income where the correct tax has not been paid. The types of tuition, instruction or coaching covered by the TCUP include tuition of traditional academic subjects, fitness and dance instruction, musical instrument tuition, art, services provided by life coaches and others.

Under the TCUP, tutors and coaches have until 31 March 2012 to advise HMRC about their outstanding tax for the years up to 5 April 2010, and pay what they owe. HMRC have confirmed that those who come forward by the deadline are likely to receive the best possible terms for paying the tax owed. If they have to pay a penalty, it is unlikely to be more than 20%.

Those who wait for HMRC to come to them will find that they have to pay much higher penalties (as much as 100% and may even face criminal prosecution). After 31 March 2012, using information pulled together from different sources, HMRC will investigate those who have chosen not to come forward.

Marian Wilson, Head of HMRC Campaigns, said:

‘Our campaigns are designed to ensure tax is paid so that the money is available to spend on public services used by everyone. We are making it as easy as possible for people offering tuition and coaching to use this unique opportunity to put their tax affairs in order by making a full disclosure, and benefit from the best possible terms.

We are using various intelligence sources to identify and then target those who do not take advantage of this opportunity to declare their full income. The message is clear: contact us before we contact you.’

The Tax Catch Up Plan has two stages:

From 10 October 2011 to 6 January 2012, tutors/coaches/instructors must register with HMRC to ‘notify’ that they plan to make a voluntary tax disclosure.

By 31 March 2012 those who have registered to notify must tell HMRC what they owe and pay the tax, interest and penalties due.

If you would like further information on this or any other tax matters, then please contact Christine Harrison on christine@hannathompson.com