Update to CG34 form

HMRC has updated its Capital Gains Tax Form CG34 to take account of changes made to the guidance notes especially to emphasize that the relevant information must be received by HMRC at least two months before the tax payer’s tax filing date.

It is not mandatory to complete the form but if you make your own valuations of assets disposed of during the tax year, you can ask HMRC to check your valuations before the tax filing date so that you don’t underpay any tax due on the disposed assets.  The form can be downloaded from this link: CG34.pdf

If you want any further information or wish to discuss your tax affairs in strict confidence, then please do not hesitate to contact us.

Toolkits to help reduce errors

The HMRC has revised the list of toolkits as a guidance on areas of errors that are frequently seen in returns. The idea of these kits is to reduce these errors.These should help taxpayers to:

  • ensure that returns are correct in material respect;
  • focus on the areas of possible error that HMRC consider key
  • demonstrate reasonable care

The complete list is as follows:

Individuals, business and corporations

Business Profits (PDF 179K)
Capital Allowances for Plant and Machinery (PDF 174K)
Capital Gains Tax for Land and Buildings (PDF 228K)
Capital Gains Tax for Shares (PDF 178K)
Capital v Revenue Expenditure (PDF 145K)
Chargeable Gains for Companies (PDF 219K)
Company Losses (PDF 218K)
Directors’ Loan Accounts (PDF 144K)
Expenses and Benefits from Employment (PDF 206K)
Income Tax Losses (PDF 124K)
National Insurance Contributions and Statutory Payments (PDF 212K)
Private and Personal Expenditure (PDF 174K)
Property Rental (PDF 231K)
Small Profits Rate and Marginal Relief (PDF 112K)
VAT Input Tax (PDF 182K)
VAT Output Tax (PDF 208K)
VAT Partial Exemption (PDF 171K)

Trusts and Estates

Capital Gains Tax for Trusts and Estates (supplement) (PDF 237K)
Inheritance Tax (PDF 205K)
Trusts and Estates (PDF 221K)

British Conservative Party’s budget and taxation principles

The 2012 budget season is almost over and one thing we have learned from all these tax cuts for the rich and tax hike for the poor and the old is that the conservative party, under the its successive leaders, genuinely believe that the poor among our citizens have too much income and wealth to incentivise them to work hard while the richest of our citizens have very little or not enough income for them to remain in this country.

The poorest have been hit hardest by the cuts in their benefits and tax allowances while the rich got the windfall by way of tax cuts and a big cut in the top rate of income tax from 50% down to 45%.

Senior Accounting Officers legislation

The new rules on The Senior Accounting Officers (SAO for short) requires all qualifying UK resident companies to appoint an SAO to take personal charge for their company’s tax accounting matters.

What are the rules?

The SAO requirements came into force for accounting periods beginning on or after 21 July 2009 and apply to companies that in the preceding financial year either alone or when its results are aggregated with other UK group companies has turnover of more than £200m or has a relevant balance sheet total of more than £2bn.

The legislation requires that the SAO of a qualifying company must take “reasonable steps” to ensure that the company establishes and maintains “appropriate tax accounting arrangements” and in particular, monitors the accounting arrangements of the company to identify any aspects in which those arrangements are not appropriate.

The SAO must certify the position annually to HMRC, and the SAO will need to retain adequate supporting evidence to demonstrate that ‘reasonable steps’ have been taken. Failure to adhere to the rules risks a personal penalty of £5,000 for failure to comply with the requirements.

A briefing document prepared by KPMG, a leading provider of professional services including audit, tax and advisory. is avalable from the links shown below. Please contact me if you need further assistance in this matter in prder to ensure that your organization is in compliance with the legislation.

SAO – Briefing paper by KPMG – Direct Link

SAO – Briefing paper by KPMG – SkyDrive Link

SAO – Briefing paper by Google Docs – Direct Link

Do I really need a transformation?

Over the last two weeks or so I have received 100s of messages telling me that I need a good transformation; I believe what they are saying is that my website, more accurately, my blog, needs a transformation.

Some messages were crude and some were blatant senseless. One message from a well known blogger/website has threatened me that if I continue to provide working codes on their forums then they will have no alternative but to ban me.

I wonder if they really know that what they are talking about. Do they really think that I care about his blog/website? Has he lost his senses recently?. He should know very well that I only care about people looking for real solutions about their real every day problems. They can always come to me direct and they know where I live in the cyberspace.

However, do I really need a transformation like in this video? Let me know. By the way I am not fat nor thin. I am just a normal guy keeping fit by going to my local gym three times a week.

Return reminder for employers

With the 2011/12 tax year now ended on 5th April 2012, employers across the country are reminded to send in their annual returns on time, or face a penalty.

Employer Annual Return Forms (previously called Form P35), which provide information on employees’ tax and national insurance deductions during the tax year, must be sent online to HM Revenue & Customs (HMRC) by the 19th May deadline. Almost all employers must file these returns online. Paper returns must not be sent to HMRC.

If you file the return late, the penalty is £100 per 50 employees for each month, or part month, that the return is outstanding.

Employers who are not registered for online filing need to sign up now for HMRC’s PAYE Online service. The registration process takes a few minutes, but you won’t be able file online until you have activated the service using a code that HMRC sends you by post. This can take up to a week to arrive – so don’t leave registration until the last minute. I can certainly help you to register you for HMRC’s online service so please contact me at your earliest convenience.

HMRC has published a list of common errors to avoid on its website at www.hmrc.gov.uk/paye/payroll/year-end/errors.htm.

Special notice about electronic PAYE payment dates

PAYE payment is due on Sunday 22 April, 2012 – to avoid paying late and late payment penalties, you must make sure HM Revenue & Customs have cleared funds by the payment due date.

For further details and full HMRC’s Special Notice please visit their website by using the link shown below:

Special notice about electronic PAYE payment dates

If you need any assistance to comply with this requirement, then please do not hesitate to contact me.

Limited companies – Claiming back CIS deductions

All registered subcontractors should read the latest HMRC leaflet which sets out how Limited Companies registered as subcontractors can claim back any overpayments of deductions under the CIS rules.

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The leaflet is available from my website and people can contact me if they need further assistance in how to go about making the claim.

Limited Company Subcontractors – Claiming back Construction Industry Scheme (CIS) deductions

Child Tax Credit and Working Tax Credit

A leaflet that explains what Child Tax Credit and Working Tax Credit are, who can get them and how to make a claim has been published by HMRC. This is the latest leaflet in a series of leaflets issued by the Government in the light of 2012 budget and how to help the low paid workers to feed their families. The leaflet, as usual is available exclusively from this website by clicking on the link shown below.

As usual, I am available to assist anybody who wants help in understanding our tax legislation in order to comply with their obligation to file all their tax returns and to pay their taxes on time.

Child Tax Credit and Working Tax Credit

Cap on unlimited income tax reliefs

Granny tax, pasty tax and fuel fiasco has over shadowed what I consider to have the most far reaching impact on how our income tax system operates.

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At present individuals can offset almost unlimited amount against income to arrive at income liable to income tax. This results in an individual pays not tax at all even if his total earnings are in millions of pounds.

This is likely to change from 6 April 2013 when a cap would be placed on how much can be offset against income to arrive at income for tax purposes. The cap will apply only to reliefs which are currently unlimited. And will be set at 25 per cent of income or £50,000, whichever is greater.

The reliefs likely to be affected are:

    • loss reliefs claimable against total income;
    • qualifying loan interest reliefs;
    • reliefs for charitable donations; and
    • miscellaneous small reliefs which are currently uncapped.

Some of the reliefs not likely to be affected are:

    • Reliefs for double taxation such as foreign and dividend tax credits and notional tax on life insurance gains.
    • Reliefs that are already capped such as pension tax relief, front-end Enterprise and Seed Enterprise Investment Scheme income tax relief, Venture Capital Trusts and the Cultural Gift Scheme.
    • Deductions that are allowed against specific source to arrive at income liable to tax;
    • The new business investment incentive for non-domiciled individuals who are resident in the UK for tax purposes (this relief is against specific foreign income brought to the UK;
    • The income tax reclaimed by charities under the Gift Aid scheme;

The detailed HM Revenue/Treasury press release has more information and it is available exclusively from this blog:

Link: Cap on unlimited income tax reliefs