Tax Systems Share Discussion Threads

[grupo] 01/2/2019 10:57

the long arm of uk tax law




HMRC’s appeal was allowed, meaning its powers to seek information from non-UK individuals about their tax affairs after they have left the UK have been confirmed.

[maywillow] 30/1/2019 19:16

Public sector pensions
Taxpayers face £4bn annual pension bill after court ruling

Judges and firefighters win age discrimination case that will raise public sector pensions

Rupert Jones

Wed 30 Jan 2019 19.09 GMT
Last modified on Wed 30 Jan 2019 19.12 GMT

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The government spells out the cost of age discrimination case over public sector pensions.
The government spells out the cost of age discrimination case about public sector pensions. Photograph: Nick Ansell/PA

The government faces a £4bn a year pensions bill after a group of judges and firefighters won an age discrimination court case, it emerged on Wednesday.

One investment firm said members of public sector pension schemes could receive a massive boost to their retirement pots if the government’s appeal against the court decision was unsuccessful. That might need to be financed through cuts in spending or increases in taxes.

The coalition government pushed through a series of reforms that meant most public sector workers were moved to new pension schemes in 2015. However, these new schemes typically offered less generous terms, prompting anger among many workers and unions.

As part of the reforms, the government put in place transitional arrangements which typically meant that older workers could stay in the existing, more generous schemes, while younger workers had to transfer to the new schemes.

A group of judges and a group of firefighters decided to take the row to court, and on 20 December the court of appeal ruled that the transitional arrangements offered to some members amounted to unlawful discrimination.

Now the government has spelled out the potential cost of this ruling. On Wednesday, Liz Truss, the chief secretary to the Treasury, said in a written statement: “The provisional estimate is that the potential impact of the judgment could cost the equivalent of around £4bn per annum.”

She said the government was seeking permission to appeal the decision, and if this was unsuccessful, employees who were transferred to the new schemes would be compensated.

Investment firm Hargreaves Lansdown said the judgment was expected to have an impact on other public sector groups, such as police officers, who had seen similar changes to their pension schemes and would also extend to public sector workers such as those employed by the NHS, teachers and prison officers.

Tom Selby, a senior analyst at investment firm AJ Bell, said: “Members of public sector schemes could receive a massive boost to their retirement pots if the government’s appeal against this decision fails. This boost will come at a cost to the Treasury – and taxpayers in general – of somewhere in the region of £4bn a year.”

He said the implications for the public finances “are potentially gargantuan,” adding: “It is highly unlikely [this] could simply be absorbed by the Exchequer, so cuts in spending or increases in taxes will almost certainly be needed to fill this pensions black hole”.

[waldron] 22/1/2019 11:41

HMRC admits tax return penalty error

HMRC has been forced to admit that it issued penalty notices for late filing in error to hundreds self assessment taxpayers, just days after denying claims that this had occurred

22 Jan 2019
Pat Sweet
Pat Sweet

Reporter, Accountancy Daily, published by Croner-i Ltd
View profile and articles.

Media reports at the weekend suggested some taxpayers were sent penalty notices, even though there are two weeks to go before the January 31 deadline and they had already submitted an online tax return.

At the time, HMRC said that ‘any assertion we have sent early penalty notices to customers doing their returns online is false,’ claiming that the reports related to individuals who had missed the 31 October paper filing deadline.

However, the HMRC has now released updated information, admitting that 653 tax returns relating to trusts which were processed on a specific date, 2 January, were then erroneously subject to a £100 late filing penalty.

An HMRC spokesperson said: ‘Due to human error in processing some online trust returns a small number of trustees or agents have been inadvertently issued with late filing penalties.

‘All affected returns have been identified and the late filing penalties have been cancelled.

‘We apologise for any issues this may have caused our customers and are writing to them directly to let them know.’

Report by Pat Sweet

[grupo] 20/1/2019 11:49

Britain's richest man: Tax crackdown in UK is driving billionaire exodus

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Hinduja
Gopichand Hinduja, Britain's richest man, said complex tax rules were driving the wealthy away

Robin Pagnamenta Christopher Williams, Deputy Business Editor

19 January 2019 • 9:00pm

Britain's wealthiest business people are fleeing abroad amid mounting complications over tax, the country’s richest man has warned.

Amid a growing political crisis over the UK’s future relationship with the EU, Gopichand Hinduja, whose family controls a £20.6bn industrial fortune, told The Sunday Telegraph many of the country’s wealthiest people have ­already quietly left Britain for Dubai, Singapore and other financial centres.

[ariane] 13/1/2019 19:54

Tax

The tax relief on Venture Capital Trusts comes in a number of different forms and with varying risks:

The Income Tax relief is 30% on a maximum investment of £200,000 per tax year when you buy newly-issued shares. This is claimed back if you sell your shares within five years unless you sell them to your spouse or you die.
Tax relief is provided in the form of a tax credit to set against your overall income tax liability in the tax year. The amount of the tax credit cannot, therefore, exceed your total income tax liability for that tax year.
Dividends from investments in VCTs do not attract income tax provided the original investment was made within the permitted maximum of £200,000 per year.
You won’t have to pay any Capital Gains Tax on gains from investments in Venture Capital Trusts and there is no minimum holding period for this rule to apply. But if your VCT investments make a loss, you can’t use this to reduce your Capital Gains Tax bill from other investments.





Doug

suggest you ask your tax advisor or local tax office should you have further questions


cheers

[dcarn] 13/1/2019 19:11

Evening,

A quick query with regards to tax relief and VCT's.

The information i can find states 'You can invest up to £200,000 in VCTs each tax year and benefit from this tax relief. However, the maximum tax rebate is the amount of income tax you pay '.

What is the definition of 'income tax' in the above statement, i assume it includes tax paid on salary, rental income and dividends.

Is capital gains tax payments (resulting form share dealing profits) classed as 'income tax' and could they be claimed back as VCT income tax rebate?

Regards,

Doug.

[pvb] 06/1/2019 16:54

Aaaarrrrggggghhhh!

[the grumpy old men] 06/1/2019 10:13

LAST DAY 31ST JANUARY FOR TAX YEAR 2018 OR BE FINED

[florenceorbis] 27/12/2018 13:30

Diesel car tax

The tax rates of diesel cars were increased from April 1 of this year. This applies to the Vehicle Excise Duty (VED), usually known as road tax.

Instead of being fixed at £140 per year, VED rates will now be calculated based on the car's carbon dioxide emissions.

The highest raise of first-year tax is £500, for cars which emit between 191 and 225g of carbon dioxide per year. However, those which emit the more environmentally-friendly 111 to 130g/km will only see their tax go up by £40.

[sarkasm] 21/12/2018 11:01

cheers s2

happy holiday

[s2lowner] 21/12/2018 10:58

Got it now I think
do need to record over £300
no tax to pay as upto 5000 dividend not taxable
may be some foreign tax credit relief as one transaction was canadian

[s2lowner] 19/12/2018 15:50

Recording Foreign share dividends held in an isa on the Tax Return

I hold HICL an investment trust registered in guernsey and held Entertainment One registered in Canada both paid dividends, Entertainment One was after foreign tax taken off, no tax being taken off HICL

As the total is over £300 I have enter in the foreign income section of the Tax Return
(under £300 it is in the dividends section)

Should I be recording them at all as they are in an isa ? (As Barclays have listed them on a Schedule of Overseas Dividends they sent me)

If so will I be liable for tax on the HICL even though it was held in an ISA because HMRC won't know its in an ISA

If I have to record am I entitled to foreign tax credit relief on the £50 withholding tax I paid on the entertainment one dividend

Any help appreciated

[maywillow] 13/12/2018 09:43

Tax avoidance is not theft

Posted on December 13 2018

I have learned that many campaigning NGOs are planning to describe tax avoidance as theft in the future. I am quite worried by this.

First, let me be clear what tax avoidance is. I recently defined it as follows:

Tax avoidance is taxpayer determined behaviour where the taxpayer decides to submit a tax return and declare their tax liabilities based on an interpretation of the applicable law of the jurisdiction that the taxpayer knows may be unacceptable to the tax authority of that country. They do so knowing that the risk of their potential misinterpretation of the law being discovered is limited and so the chance of appearing to reduce their liability in ways they claim to be legal, whether that is true or not, is sufficiently high for them to justify the risk of doing so. The scale of this issue is related to the complexity of the tax system and the degree of uncertainty that might exist as to the proper interpretation of the tax rules that it creates.

And I also made clear what tax avoidance is not:

I stress that tax avoidance does not ever include making use of tax reliefs and allowances provided by the law of a country: the cost of these is included in the tax policy gap.

I defined the tax policy gap as:

The tax policy gap is the tax not paid in a country as a result of the decision made by a government not to tax a potential tax base, such as wealth. Additionally it is the value of the tax reliefs, allowances and exemptions given by a government for offset against a source of income that might otherwise be taxable.

So tax is not paid, but no one avoided it: the government had no intention that it should be paid.

Sorry to be so laboured on this, but it’s important. And that’s for a good reason. Tax avoidance may be playing fast and loose with tax law. It is certainly about using interpretations of the law that a taxpayer knows might not be agreed by a tax authority. But let’s be clear that every morning two lawyers walk into courts all over the world and argue what the law means and fifty per cent of them usually turn out to be wrong. In that case not agreeing with a tax authority’s interpretation of tax law is not wrong. Disagreement can be honest. It can be reckless. It can even be unethical (and often is, in my opinion, when it comes to tax). But theft is something else.

Theft can be defined as follows by section 1 of The Theft Act 1968:

Basic definition of theft.

(1)A person is guilty of theft if he dishonestly appropriates property belonging to another with the intention of permanently depriving the other of it; and “thief” and “steal” shall be construed accordingly.

(2)It is immaterial whether the appropriation is made with a view to gain, or is made for the thief’s own benefit.

Does tax avoidance dishonestly appropriate property belonging to another? I would suggest not. I would say it knowingly exploits uncertainty in the law to secure a pecuniary advantage, but that most of those doing it will have secured an opinion from a professional adviser before doing so that the action in question was legal, even if it had an uncertain consequence. And those opinions (which will not be publicly available, but which will be in the possession of the tax avoiding taxpayer) will be more than enough to show that the tax avoider had no intention of being dishonest, precisely because they had gone out of the way to make sure that they had an opinion to say they were acting legally, even if with dubious ethical intention.

In that case accusing someone of theft has serious ramifications. Like libel. And I would hate to see tax campaigners being charged with that.

So I strongly suggest that those tempted to use this language think again. It is most unwise.

[the grumpy old men] 28/11/2018 10:44

LOL

HOW ABOUT DONER , CONTRIBUTOR OR CLIENT EVEN

SUBSRCIBER PERHAPS

[optomistic] 28/11/2018 10:19

"Customers don’t need to do anything right now"

...never looked upon myself as being a 'customer' of the HMRC :-/

[maywillow] 28/11/2018 09:43

HMRC writes to taxpayers about Welsh rates of income tax

With four months to go, HMRC has written to two million individuals in Wales ahead of the introduction of the new Welsh rates of income tax (WRIT), outlining residency and compliance issues

28 Nov 2018
Pat Sweet
Pat Sweet

Reporter, Accountancy Daily, published by Croner-i Ltd
View profile and articles.

From 6 April 2019 taxpayers will pay WRIT if they have a main residence in Wales, regardless of where they work, which may mean changes to the amount of tax they pay on wages, pension and most other taxable income.

Tax rates on dividends and savings interest remains the same as for the rest of the UK, and there are also no changes to personal allowance.

Income tax will continue to be collected from pay and pensions through PAYE and self assessment in the same way it is now. But from 6 April, the Welsh government will set its own income tax rates and WRIT taxpayers will receive a new tax code, starting with C for Cymru.

Angela MacDonald, director general for HMRC customer services, said: ‘We want to help people pay the right tax so we’re writing to customers to let them know that they’ll now be paying WRIT.

‘Customers don’t need to do anything right now but should make sure to keep HMRC informed if their details change in the future.’

More information on the Welsh rates of income tax here:

Report by Pat Sweet