News

Families paid more than £3bn IHT in the year to April – the biggest sum since the onset of the credit crisis.

The inheritance tax-take is climbing strongly again, official figures show, thanks largely to the recovery in property and share prices. An increased focus by HMRC on the collection of IHT could also explain the rise, accountants say.

Self-assessment taxpayers who have failed to submit tax returns are being offered the opportunity to settle their arrears in an HMRC campaign.

From this week, the campaign is aimed at people who have received a self-assessment tax return or notice to complete a tax return for any year up to 2011/12, but are yet to take action.

The scheme will see HMRC writing directly to several thousand people it has identified using intelligence-gathering software, before following up with calls to many of them.

This latest drive follows a similar initiative undertaken last year, which covered higher-rate taxpayers who had failed to submit 2008/09 or 2009/10 returns. That campaign yielded more than £30m when over 3000 people came forward filing more than 5500 returns.

Once participants have told HMRC they wish to take part in the campaign, they have until 15 October 2013 to complete and submit a return, and pay the tax and National Insurance Contributions (NICs) that they owe.

After 15 October, if they have not submitted their returns and paid the tax due, penalties of up to 100% of the tax, or even criminal investigation, could follow.

HMRC head of campaigns Marian Wilson said “This is definitely the best time to catch up, on the best possible terms. While some penalties will apply, it is likely to cost people more if we have to find them rather than them coming to us. We have made it easy to take part.

“We know this approach works because campaigns launched so far have produced more than &547m through people coming forward voluntarily. And evidence shows that people who change their behaviour voluntarily are more likely to remain compliant for longer. We will continue to analyse information using connect, our state-of-the-art risking engine, and will be looking more closely at people who have gaps in their tax records.”

Research has found that administration is one of the most time-consuming activities for small business owners in the UK.

According to the American Express Small Business Barometer, 55% of SME leaders listed admin as one of the three activities they spend most time doing. In addition, 48% listed strategy and planning, whilst 43% put customer relations in their top three.

The results suggest that many SME leaders are spending too much time with administering their businesses rather than utilising their creativity and dynamism to drive their business forward.

The research also found that SME leaders UK are happy with their jobs and optimistic about their business. Around 93% of small business owners are either “very” or “quite” happy with their business.

The main factors that promoted this job satisfaction were cited as “being master of my own destiny” (70%) “doing something i like or believe in” (66%) and “reaping the benefits of my own efforts” (42%).

Commenting on their performance for the first five months of this year, 40% of those interviewed said they had achieved growth, with 43% saying business had remained flat.

Looking ahead to the future, the barometer found that 56% of small business owners expected their business to grow over the coming year, with only 12% believing their business would contract.

The temporary relaxation of real-time PAYE reporting rules has been extended to April 2014, HM Revenue & Customs has announced.

Real-time information sees PAYE reported on or before the date payment is made, while changes will be reported as and when they occur, rather than at the end of the financial year.

Although the system commenced in April, following criticism from stakeholders and institutes, allowances were made for businesses with fewer than 50 employees, allowing them to continue reporting their payrolls monthly until the 5 October while they prepare.

That deadline has now been pushed back until April next year, meaning businesses will not be required to change their approach halfway through the tax year, HMRC said.

As with the current relaxation, businesses are still required to report through the new system, but are able to do so once a month, rather than each time they pay their employees.

One in four people in the UK would consider loaning money to SMEs by joining a peer-to-peer (P2P) lending scheme in 2014 when the sector will be fully regulated by the Financial Conduct Authority, according to a new study peer-to-peer lending website rebuildingsociety.com.

The research also shows that 17 per cent would consider P2P lending over the next 12 months without the need for additional regulatory protection. However, the added security should reinforce the sector given money lent through P2P is currently not covered by the Financial Services Compensation Scheme (FSCS) and lenders could lose cash if borrowers default.

Peer-to-peer lending – also known as person-to-person lending, peer-to-peer investing and social lending – is the practice of lending money to businesses or individuals online.

The study also underlines the attraction of P2P schemes to small firms as around 24 per cent believe they will struggle to access finance in the next 12 months. Given this, 16 per cent of small businesses would consider applying for a P2P loan over the next year. The research suggests the biggest obstacle to the growth of P2P lending is low awareness with six in ten (59 per cent) consumers not understanding what the term meant. Furthermore, more than half (54 per cent) highlighted a lack of knowledge as the principle reason reason as to why they wouldn’t invest in a P2P scheme, followed by the fear of borrowers not repaying the loan (46%).

Daniel Rajkumar, managing director at rebuildingsociety.com, said “This research shows P2P lending is well on its way to entering the financial mainstream with strong levels of interest from consumers and SMEs alike.

“The FCA’s regulatory oversight from next year will provide consumers with an additional layer of protection and our study shows this is very likely to boost take-up.”

Small businesses are missing out on the benefits of apprenticeships, a new report has suggested.

According to a survey from Barclays, small firms with a turnover of less than £5 million are lagging behind their larger counterparts when it comes to creating apprenticeships.

Just 19 per cent of small companies are likely to take on an apprentice, compared with an average of 41 per cent among businesses of every other size.

The poll also found that only 12 per cent of the smallest firms are planning to increase the amount of apprentices they recruit this year, compared with 19 per cent of all other company sizes.

A recent report from the Centre for Economics and Business Research found that firms with apprentices usually gain a £241 per week productivity boost.

Ashok Vaswani, chief executive of Barclays Retail and Business Banking, said, “It’s encouraging to see that many companies are planning  to take on more apprentices in 2013, but with small business accounting for around half of the UK’s GDP it is really important that they do not miss out on the benefits that apprentices bring to organisations of all sizes.”

The free software provided to small businesses by HM Revenue & Customs is failing to file real-time PAYE submissions. The Basic PAYE Tools (BPT)software package is available to employers with nine or fewer employees, and is designed to work out tax and national insurance contributions for each payroll cycle, and report it to the taxman in real-time.

However, a software issue has seen an error message appear when employers attempt to make PAYE submissions, while taxpayers calling the RTI helpline were met with a recorded message acknowledging the fault and assuring them the issue was being investigated.

An element of Windows, known as a registry key, has been removed in a Windows update. The key is needed to enable full function of the software. Without its presence, the software is unable to successfully submit the information.

HMRC has published guidence advising users that although information about restoring the key is available from various sources online, HMRC itself cannot provide instruction on how to, as it is unsure why the key was removed.

The taxman will, however, release a software update at the end of May negating the need for the key. In the meantime, taxpayers are advised to continue running the payroll system as normal and submit the information once the update has been installed.

A spokesman for HMRC said “The roll out of RTI is progressing well. Since 6 April over one million PAYE schemes have successfully started to report PAYE in real-time. This includes over £140,000 BPT users successfully submiting returns”.

“As with any major change, a few initial problems have been identified and these are being resolved quickly. The issue referred here is not BPT fault, but we have published guidance to help those employers affected to resolve it. The vast majority of BPT users who have already started to report PAYE in real-time are successfully submitting returns without any issue.”

For information on the guidance HMRC published, click on the link below.

http://www.accountancyage.com/aa/news/2267021/hmrc-rti-software-fails-to-file-submissions

You may be liable to the High Income Child Benefit charge if you, or your partner, have an individual income of more than £50,000 and one of you gets Child Benefit. It may also apply if someone else receives Child Benefit for a child who lives with you.

The link below will provide you with more information, however, if you do have any queries please contact us.

The High Income Child Benefit charge

They have finally arrived!

Feel free to take a look at our tax rates and if you have any questions at all please do not hesitate to contact us.

Tax Rates 2013-14