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LATEST NEWS

Proper persons test revamped
HMRC have revamped the guidance on the fit-and-proper-persons test for managers of charities published earlier this year. It incorporates significant revisions, in particular the details on when a charity should notify the Revenue about a manager. The ICAEW Tax Faculty said it remains concerned that 'the legislation gives too much discretion to HMRC, while at the same time it imposes costly and additional compliance burdens on every charity’.
Treasury unveils array of tax changes
The Government is inviting expert views on a number of proposed tax policies, having today published nine documents for discussion and consultation to applause from within the tax sector.   The papers, which were unveiled by the Exchequer secretary to the Treasury, David Gauke, cover the following subjects: read more
NAO critical of Revenue's backlog
HMRC have not made sufficient progress in reducing their backlog of cases of potentially overpaid or underpaid tax, according to the National Audit Office (NAO). The latest NAO report on the Revenue’s accounts shows that the department raised £435.1 billion from taxes and duties in 2009-10, a decrease of £5.9 billion on 2008-09. Although HMRC improved their performance in collecting debt, with unpaid amounts due from taxpayers decreasing by £1.6 billion to £26.1 billion, seven million cases of potentially overpaid or underpaid tax were identified when end-of-year PAYE reconciliations for 2008-09 were belatedly performed. (The delay was caused by problems with data quality and processing.) The taxman has yet to process the cases and check their validity. read more
Boost for Working with Tax Agents
Taxation understands that a unified approach by the professional bodies on the Working with Tax Agents proposals has led to productive discussions with HMRC. The professional bodies have queried whether there is any gap in HMRC’s existing powers, and have outlined the ways in which the current provisions could be used to meet the areas of concern. In turn, HMRC are now going to consider with their legal team whether they still believe that there are areas where their powers are insufficient. If any gaps are identified, then it will be necessary to see whether existing provisions can be modified, or whether there is still a need for completely new legislation. Once this has been done, the profession has agreed to work together in order to produce a workable and sensible solution. read more
Low response to HMRC’s tax health plan
So far HMRC say they have had around 1,500 disclosures totalling approximately £9 million as a response to their tax health plan. The highest amount disclosed from a doctor is in excess of £1million, and from a dentist more than £300,000. A press spokesman for HMRC said: ‘Most interesting has been the sources of income revealed by disclosures - we now know of several specific new sources of information linked to undeclared incomes for doctors and for dentists. 'We have established that our information powers allow us to access the information from previously unknown sources and we are obtaining this now. Although follow-up investigations have already begun, we want to ensure that we have this new information available as well before we close any investigation.’ read more
Proper persons test revamped
HMRC have revamped the guidance on the fit-and-proper-persons test for managers of charities published earlier this year. It incorporates significant revisions, in particular the details on when a charity should notify the Revenue about a manager. The ICAEW Tax Faculty said it remains concerned that 'the legislation gives too much discretion to HMRC, while at the same time it imposes costly and additional compliance burdens on every charity’.
Tax paid on van use quadruples
Small traders who drive vans have come under increasing pressure from HMRC following a change to rules on a job perk, according to UHY Hacker Young. The accountancy group has obtained figures that show the amount of tax paid by drivers of company vans quadrupled in the two most recently completed tax years. The Revenue collected £40 million over the period, compared to the £10 million taken by the department in 2006/07. The rise follows a change to the system for taxing employees’ private use of employer-provided vans. Under the old rules, the taxable benefit in kind was £500 (or £350 for vehicles that were more than four years old). Following changes introduced in April 2007, the taxable benefit for all vans is £3,000 plus an additional £500 of taxable benefit if fuel is provided by the employer. read more
Office of Tax Simplification launched
The Office of Tax Simplification has been established by Chancellor of the Exchequer George Osborne and Exchequer Secretary David Gauke. ‘Two years ago I promised to create the Office of Tax Simplification’, said Mr Osborne. ‘Today, we’re delivering on that promise. With its independent, expert advice it will be a permanent force for a simpler tax system.’ A board of tax experts will be responsible for leading the work of the office over the next year. The board will be chaired by the Rt Hon Michael Jack, and John Whiting will be its tax director. The office will draw on external expertise from the tax and legal profession to focus on specific areas of complexity in the tax system and provide additional advice. read more
HMRC 'very pleased' with LDF progress
HMRC say they are happy with the progress of their Liechtenstein disclosure facility (LDF), in spite of suggestions that the department is not doing enough to promote the so-called tax amnesty. Law firm McGrigors this week questioned the LDF’s efficacy, after Revenue data showed that 419 taxpayers registered for the long-running scheme in its nascent months from 1 September 2009 to 31 March 2010. The company – a tax investigations specialist – claimed that 'HMRC is likely to be disappointed at the response', given that around 10,000 individuals put down their names for the six-month-long new disclosure opportunity (NDO) that closed earlier this year. read more
Taxman hires debt collection quartet
HMRC have hired four debt collection firms in an attempt to recoup extra millions of unpaid taxes. The department launched a six-month pilot scheme last summer to test the impact of working with private sector debt collection agencies (DCAs). The trail was considered a success, and so it was announced in the June Budget that the Revenue would make full-time use of contractors to boost debt collection capacity and help the pursuit of lower value debts. read more
Pensions revamp 'still has way to go'
Government plans to reform pensions tax relief do not go far enough to protect the UK's saving culture, according to industry commentators. The Treasury yesterday launched nine documents for discussion and consultation, each covered proposed changes to tax policies, including the replacement of existing measures for the restriction of pensions tax relief with a drastically reduced annual allowance in the region of £30,000 to £45,000. The mooted revamp was hailed by KPMG pensions head Andrew Cawley as ‘fairer’ than the current system. He added that they would ‘have a less detrimental effect on UK pension provision generally’. read more
New anti-laundering guides replace MLR8
HMRC have published a new set of anti-money laundering guides to replace public notice MLR8, ‘Preventing money laundering and terrorist financing’. The guides are sector specific and provide detailed guidance in relation to the legislation, risks, record keeping and reporting requirements relevant to each business sector. The guides are available online only, and cover money service businesses, high value dealers, and trust or company service providers. Accountancy service providers are advised to continue to refer to the Consultative Committee of Accountancy Bodies guidance. HMRC say they are considering whether they can provide specific sector advice for accountancy service providers.  
Low response to HMRC’s tax health plan
So far HMRC say they have had around 1,500 disclosures totalling approximately £9 million as a response to their tax health plan. The highest amount disclosed from a doctor is in excess of £1million, and from a dentist more than £300,000. A press spokesman for HMRC said: ‘Most interesting has been the sources of income revealed by disclosures - we now know of several specific new sources of information linked to undeclared incomes for doctors and for dentists. 'We have established that our information powers allow us to access the information from previously unknown sources and we are obtaining this now. Although follow-up investigations have already begun, we want to ensure that we have this new information available as well before we close any investigation.’ read more
Boost for Working with Tax Agents
Taxation understands that a unified approach by the professional bodies on the Working with Tax Agents proposals has led to productive discussions with HMRC. The professional bodies have queried whether there is any gap in HMRC’s existing powers, and have outlined the ways in which the current provisions could be used to meet the areas of concern. In turn, HMRC are now going to consider with their legal team whether they still believe that there are areas where their powers are insufficient. If any gaps are identified, then it will be necessary to see whether existing provisions can be modified, or whether there is still a need for completely new legislation. Once this has been done, the profession has agreed to work together in order to produce a workable and sensible solution. read more
NAO critical of Revenue's backlog
HMRC have not made sufficient progress in reducing their backlog of cases of potentially overpaid or underpaid tax, according to the National Audit Office (NAO). The latest NAO report on the Revenue’s accounts shows that the department raised £435.1 billion from taxes and duties in 2009-10, a decrease of £5.9 billion on 2008-09. Although HMRC improved their performance in collecting debt, with unpaid amounts due from taxpayers decreasing by £1.6 billion to £26.1 billion, seven million cases of potentially overpaid or underpaid tax were identified when end-of-year PAYE reconciliations for 2008-09 were belatedly performed. (The delay was caused by problems with data quality and processing.) The taxman has yet to process the cases and check their validity. read more
Treasury unveils array of tax changes
The Government is inviting expert views on a number of proposed tax policies, having today published nine documents for discussion and consultation to applause from within the tax sector.   The papers, which were unveiled by the Exchequer secretary to the Treasury, David Gauke, cover the following subjects: read more
Pensions revamp 'still has way to go'
Government plans to reform pensions tax relief do not go far enough to protect the UK's saving culture, according to industry commentators. The Treasury yesterday launched nine documents for discussion and consultation, each covered proposed changes to tax policies, including the replacement of existing measures for the restriction of pensions tax relief with a drastically reduced annual allowance in the region of £30,000 to £45,000. The mooted revamp was hailed by KPMG pensions head Andrew Cawley as ‘fairer’ than the current system. He added that they would ‘have a less detrimental effect on UK pension provision generally’. read more
Office of Tax Simplification launched
The Office of Tax Simplification has been established by Chancellor of the Exchequer George Osborne and Exchequer Secretary David Gauke. ‘Two years ago I promised to create the Office of Tax Simplification’, said Mr Osborne. ‘Today, we’re delivering on that promise. With its independent, expert advice it will be a permanent force for a simpler tax system.’ A board of tax experts will be responsible for leading the work of the office over the next year. The board will be chaired by the Rt Hon Michael Jack, and John Whiting will be its tax director. The office will draw on external expertise from the tax and legal profession to focus on specific areas of complexity in the tax system and provide additional advice. read more
EU makes move to VAT e-invoicing
The European Union has adopted a new invoicing directive designed to tackle VAT fraud and simplify invoicing requirements, especially in electronic format. The new directive aims to ensure the acceptance by tax authorities of e-invoices under the same conditions as for paper invoices, and to remove legal obstacles to the transmission and storage of e-invoices. It includes measures to help tax authorities ensure that tax is paid so as to better tackle VAT fraud. These include establishing deadlines for the issue of invoices, thus enabling speedier exchange of information on intra-EU supplies of goods and services. ‘This decision is a first step to reduce the technological burden regarding invoicing’, said Marc Hoessels, head of the Deloitte e-invoicing group in Europe. read more
Tax paid on van use quadruples
Small traders who drive vans have come under increasing pressure from HMRC following a change to rules on a job perk, according to UHY Hacker Young. The accountancy group has obtained figures that show the amount of tax paid by drivers of company vans quadrupled in the two most recently completed tax years. The Revenue collected £40 million over the period, compared to the £10 million taken by the department in 2006/07. The rise follows a change to the system for taxing employees’ private use of employer-provided vans. Under the old rules, the taxable benefit in kind was £500 (or £350 for vehicles that were more than four years old). Following changes introduced in April 2007, the taxable benefit for all vans is £3,000 plus an additional £500 of taxable benefit if fuel is provided by the employer. read more
Taxman hires debt collection quartet
HMRC have hired four debt collection firms in an attempt to recoup extra millions of unpaid taxes. The department launched a six-month pilot scheme last summer to test the impact of working with private sector debt collection agencies (DCAs). The trail was considered a success, and so it was announced in the June Budget that the Revenue would make full-time use of contractors to boost debt collection capacity and help the pursuit of lower value debts. read more
HMRC 'very pleased' with LDF progress
HMRC say they are happy with the progress of their Liechtenstein disclosure facility (LDF), in spite of suggestions that the department is not doing enough to promote the so-called tax amnesty. Law firm McGrigors this week questioned the LDF’s efficacy, after Revenue data showed that 419 taxpayers registered for the long-running scheme in its nascent months from 1 September 2009 to 31 March 2010. The company – a tax investigations specialist – claimed that 'HMRC is likely to be disappointed at the response', given that around 10,000 individuals put down their names for the six-month-long new disclosure opportunity (NDO) that closed earlier this year. read more
EU makes move to VAT e-invoicing
The European Union has adopted a new invoicing directive designed to tackle VAT fraud and simplify invoicing requirements, especially in electronic format. The new directive aims to ensure the acceptance by tax authorities of e-invoices under the same conditions as for paper invoices, and to remove legal obstacles to the transmission and storage of e-invoices. It includes measures to help tax authorities ensure that tax is paid so as to better tackle VAT fraud. These include establishing deadlines for the issue of invoices, thus enabling speedier exchange of information on intra-EU supplies of goods and services. ‘This decision is a first step to reduce the technological burden regarding invoicing’, said Marc Hoessels, head of the Deloitte e-invoicing group in Europe. read more
New anti-laundering guides replace MLR8
HMRC have published a new set of anti-money laundering guides to replace public notice MLR8, ‘Preventing money laundering and terrorist financing’. The guides are sector specific and provide detailed guidance in relation to the legislation, risks, record keeping and reporting requirements relevant to each business sector. The guides are available online only, and cover money service businesses, high value dealers, and trust or company service providers. Accountancy service providers are advised to continue to refer to the Consultative Committee of Accountancy Bodies guidance. HMRC say they are considering whether they can provide specific sector advice for accountancy service providers.  

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