HMRC suffers defeat in an IR35 case

HMRC suffers defeat in an IR35 case

The presenter of television show Loose Women, Kaye Adams, has become the latest TV personality to win a case against HM Revenue & Customs (HMRC) over her employment status.

The Government tax authority had argued that Ms Adams was, in fact, an employee of the BBC instead of a freelancer, due to the fact she presents BBC Radio Scotland’s daily morning show. They claimed that because of this IR35 law should apply.

IR35 law is designed to crack down on tax avoidance by so-called disguised employees who supply their services to clients via a limited company but would otherwise be considered employees.

Earlier this week, the first-tier Tribunal ruled in favour of Ms Adams’ company, Atholl House Productions. They upheld the appeal against a PAYE tax bill of about £81,000 and a further £43,000 in national insurance contributions for the presenter’s work with the BBC between March 2015 and March 2017.

Judge Tony Beare said that Ms Adams’ 20-year career as a freelancer and roles outside the BBC showed the broadcaster was in business on her own account.

He said: “Ms Adams was not entitled under each actual agreement to any holiday or sick pay, maternity leave or pension entitlement. These are also features which are inconsistent with a relationship of employer and employee.”

HMRC’s defeat is the latest setback for the tax authority following defeat in another high profile IR35 case against Lorraine Kelly.

It also highlighted the difficulties businesses are likely to face from April 2020 when they will be required to determine the IR35 status of contractors who use limited companies.

HMRC said it was disappointed the tribunal had decided the IR35 rules did not apply in Ms Adams’ case and it would carefully consider the outcome before deciding whether to appeal.

Making tax digital is live today, yet one million businesses are not registered

Making tax digital is live today, yet one million businesses are not registered

As of today, UK based businesses that have a taxable turnover above the VAT threshold of £85,000 will be required to switch to the new digital tax service to report earnings and calculate VAT owed.

HM Revenue and Customs (HMRC) had previously claimed that 80 per cent of businesses required to join MTD were aware of the changes and had already started preparations for the Government’s new initiative to digitalise the tax returns process.

However, only four per cent (55,250) of UK businesses have registered for making tax digital (MTD), leaving more than one million to sign up.

Figures revealed that more than 3,000 businesses are registering to MTD every day; nevertheless this would mean that only 402,000 will have signed up by August 2019.

Even though MTD for VAT came into force today, most businesses won’t need to file a quarterly return until 1 July 2019 at the earliest.

HMRC has stated that they are starting with a one-year soft landing and there will be some leniencies on how you file your first returns.

Initially, businesses won’t need to have a digital link between how transactions are recorded and how you submit your VAT return. But they will need to use bridge software to submit their figures while continuing with their usual VAT system.

For further advice on making tax digital, get in touch today.

HMRC takes new measures to toughen stance on debt recovery

HMRC takes new measures to toughen stance on debt recovery

HM Revenue and Customs (HMRC) has toughened its stance on debt recovery, by taking money owed to them directly from hundreds of pay packets during the last financial year.

In data obtained via a Freedom of Information request, it was revealed that HMRC used attachment of earning orders against 428 people during the 2017/18 financial year.

An attachment of earnings order is a method of debt recovery, granted by a court, which works out the minimum amount of money a debtor needs to live on and deducts the sum owed from the money earnt above this amount.

Experts believe that these orders are favoured by HMRC because it means that the individual cannot reduce payments if they are short of money one month and they are considered similar to the process of physically seizing assets to then sell at auctions.

Although seen by some as one of the most aggressive tools HMRC has at its disposal, the increase in people failing to pay debts is beginning to justify the use of the tactic.

Data has revealed that HMRC’s spending on private sector debt collectors rose by 62 per cent to £39m in 2017, up from £24m in 2016, a move that has been attributed to the government department becoming “increasingly impatient” over chasing outstanding debts. 

An HMRC spokesperson said: “All of HMRC’s powers are given to us by Parliament and are subject to appropriate checks and balances.

“Enforcement action is only ever considered as a last resort, we will always attempt to engage in discussion regarding payment, and when appropriate agree on reasonable offers of payment over a longer period of time-based on individual circumstances.”

Record number of Self-Assessment tax returns filed by the deadline

Record number of Self-Assessment tax returns filed by the deadline

HM Revenue and Customs (HMRC) has revealed that a total of 93.68 per cent of Self-Assessment tax returns were filed by the deadline.

This equated to a record number of 11.5 million taxpayers submitting their 2017/18 tax returns by 11:59 pm on 31 January.

Statistics indicated that the peak hour for filing was 4 pm to 5 pm on the 31 January, where over 60,000 tax returns were filed.

In addition, more than 10.1 million (93.5 per cent of total filed) taxpayers submitted their returns online.

Nevertheless, 700,000 taxpayers failed to submit their tax returns on deadline day.

Mel Stride, Financial Secretary to the Treasury, said: “It is great to see so many people completing their Self-Assessment by the deadline. Their income tax contributions have helped towards funding the UK’s vital public services including hospitals, schools and the emergency services.”

HMRC’s Director General for Customer Services, Angela MacDonald, said: “Thank you to everyone who filed on time. This year, we had a record number of filers completing their tax returns by the deadline.”

Any taxpayer who has missed the deadline and needs expert advice or support, then please don’t hesitate to get in touch with us today.

Businesses reminded to take steps to prepare for upcoming payroll changes

Businesses reminded to take steps to prepare for upcoming payroll changes

Business owners in the UK are being reminded to take sufficient measures to prepare their businesses for the upcoming changes to legislation regarding payroll, which will come into force on the 6 April 2019.

The changes to the legislation are being introduced in a bid to improve the transparency around worker’s pay and how it is calculated by employers, and HM Revenue & Customs (HMRC) has published guidance in a bid to help businesses prepare for the changes.

This is the latest tactic from HMRC in their mission to crack down on payroll failings in relation to the National Minimum Wage (NMW), auto-enrolment pension contributions and company bosses wrongly defining workers as self-employed.

The new legislation will require employers to provide payslips to all workers, not just employees and most crucially show fully itemised payslips, with a clear breakdown of hours on payslips where the pay varies by the amount of time worked.

The HMRC guidance outlines that the hours can be shown either as a single total of all such hours in the pay period, or they can be broken down into separate figures for different types of work or different rates of pay. However, it should be clear which pay period they were worked in.

Payslips can be provided through printed or written document or even submitted to the employee electronically, as long as they receive it on or before their payday.

Ahead of the deadline, experts are urging businesses to act now to ensure a smooth transition, as it is believed that many businesses will need to completely revise their current payroll processes to ensure with they comply with the new changes, which could prove to be a time consuming process.

HMRC wrongly issue fines before the self-assessment deadline

HMRC wrongly issue fines before the self-assessment deadline

It has been revealed that Her Majesty’s Revenue & Customs (HMRC) has wrongly issued millions of fines to taxpayers, just weeks before the self-assessment deadline on the 31st January.

Currently, 11.5 million workers are calculating their tax to ensure they submit the correct information to HMRC by the end of January.

However, during this month millions of taxpayers have been issued letters with penalty fines of £100, one penalty letter stated that “your tax return for the year ended 5 April 2018 was not sent in on time. Because of this, a penalty of £100 is payable.”

Experts have commented on the issue, saying that this is the last thing people need in January, especially when the deadline isn’t until another week or so.

Meanwhile, HMRC has denied that any notices have been sent out incorrectly.

An HMRC spokesperson said: “No penalty notices have been sent to customers doing their self-assessment online. Those who have sent their paper returns late have been issued penalties as the paper deadline has passed.”

Alongside this recent mistake, many people have experienced a number of technical issues on the site and using HMRC’s calculator. 

HMRC added: “We are aware of an issue with payment reminders for a small number of customers. Anyone who is affected should contact us and we’ll put it right. Nobody will be charged a penalty or additional interest due to this problem.”

If anyone has received these premature penalty notices then they should contact HMRC as soon as possible to rectify the matter.

For further advice or support, then please get in touch with us today.