Newsletter – September 2018
In this month’s news we report on HMRC’s reminder to taxpayers regarding declaring offshore assets and available software for MTD for VAT. We also advise on the latest fuel advisory rates for company car drivers and guidance for employers. With statistics on Stamp Duty Land Tax and a raft of ‘No deal’ Brexit notices there is lots to update you on.
- HMRC warning: time to declare offshore assets
- Stamp duty cut: 121,500 households save £284 million
- Software suppliers – Making Tax Digital for VAT
- Advisory fuel rates for company cars
- HMRC latest guidance for employers
- ‘No deal’ Brexit guidance
HMRC warning: time to declare offshore assets
HMRC is warning that taxpayers could face penalties if they fail to declare their income on foreign assets before new ‘Requirement to Correct’ legislation comes into force.
HMRC is urging UK taxpayers to come forward and declare any foreign income or profits on offshore assets before 30 September to avoid higher tax penalties.
New legislation called ‘Requirement to Correct’ requires UK taxpayers to notify HMRC about any offshore tax liabilities relating to UK income tax, capital gains tax, or inheritance tax. The most common reasons for declaring offshore tax are in relation to foreign property, investment income and moving money into the UK from abroad. HMRC has stated that over 17,000 people have already been in contact to notify they have tax due from sources of foreign income, such as their holiday homes and overseas properties.
The Financial Secretary to the Treasury, Mel Stride MP, said:
‘Since 2010 we have secured over £2.8bn for our vital public services by tackling offshore tax evaders, and we will continue to relentlessly crack down on those not playing by the rules.’
‘This new measure will place higher penalties on those who do not contact HMRC and ensure their offshore tax liabilities are correct. I urge anyone affected to get in touch with HMRC now.’
Common Reporting Standard (CRS)
From 1 October more than 100 countries, including the UK, will be able to exchange data on financial accounts under the CRS. It is expected that the CRS data will significantly enhance HMRC’s ability to detect offshore non-compliance and it is in taxpayers’ interests to correct any non-compliance before that data is received.
Taxpayers can correct their tax liabilities by:
- Using HMRC’s digital disclosure service as part of the Worldwide Disclosure Facility or any other service provided by HMRC as a means of correcting tax non-compliance
- Telling an officer of HMRC in the course of an enquiry into your affairs
- Or any other method agreed with HMRC
Once a taxpayer has notified HMRC of their intention to make a declaration, by the deadline of 30 September, they will then have 90 days to make the full disclosure and pay any tax owed. To ensure there is an incentive for taxpayers to correct any offshore tax non-compliance on or before 30 September 2018 there are increased penalties for any failures to correct by that date.
If taxpayers are confident that their tax affairs are in order, then they do not need to worry. However if you are unsure, please contact us.
Stamp duty cut: 121,500 households save £284 million
According to the latest statistics 121,500 first-time buyers have saved a total of £284,000,000 following the introduction of a relief for first-time buyers under the Stamp Duty Land Tax rules which apply in England and Northern Ireland.
Over the next five years, it is estimated that this relief, part of the UK government’s housing policy will help over 1 million people getting onto the housing ladder.
First-time buyers purchasing homes of £300,000 and under pay no stamp duty at all, and those who bought properties of up to £500,000 will also have benefitted from a stamp duty cut.
Financial Secretary to the Treasury, Mel Stride, said:
‘Once again, we can see that our cut to stamp duty for first-time buyers is helping to make the dream of home ownership a reality for a new generation – exactly as we intended.’
‘In addition, we’re building more homes in the right areas, and have introduced generous schemes such as the Lifetime ISA and Help to Buy.’
Those purchasing properties in Wales (since 1 April 2018) pay Land Transaction Tax and those in Scotland pay Land and Buildings Transaction Tax. First-time buyers in Scotland also benefit from a relief for first-time buyers.
Software suppliers – Making Tax Digital for VAT
HMRC is working with more than 150 software suppliers who have said they will provide software for Making Tax Digital for VAT (MTDfV) in time for April 2019.
From 1 April 2019, businesses will be mandated to use the MTDfB system to meet their VAT obligations under MTDfV. Only businesses with a taxable turnover above the VAT threshold (currently £85,000) will be required to use MTDfV, however HMRC is piloting the new system, on a small scale, from April 2018.
HMRC has advised that more than 40 suppliers have said they will have software ready during the first phase of the pilot and other software suppliers are expected to follow. HMRC will open up the pilot to allow more businesses and agents to join later in 2018.
HMRC has advised that the list will be updated as more software meets the criteria. HMRC are advising businesses to check with their existing software supplier to find out if they will be supplying suitable software.
Contact us for help with Making Tax Digital for VAT.
Advisory fuel rates for company cars
New company car advisory fuel rates have been published which take effect from 1 September 2018. The guidance states: ‘You can use the previous rates for up to one month from the date the new rates apply’. The rates only apply to employees using a company car.
The advisory fuel rates for journeys undertaken on or after 1 September 2018 are:
Engine size Petrol
- 1400cc or less = 12p
- 1401cc – 2000cc = 15p
- Over 2000cc = 22p
Engine size LPG
- 1400cc or less = 7p
- 1401cc – 2000cc = 9p
- Over 2000cc = 13p
Engine size Diesel
- 1600cc or less = 10p
- 1601cc – 2000cc = 12p
- Over 2000cc = 13p
The guidance states that the rates only apply when you either:
- reimburse employees for business travel in their company cars
- require employees to repay the cost of fuel used for private travel
You must not use these rates in any other circumstances.
If you would like to discuss your car policy, please contact us.
HMRC latest guidance for employers
HMRC has published the latest edition of the Employer Bulletin. This guidance for employers, and their agents, includes articles on:
- Reporting your payroll information accurately and on time
- Irregular payments and completion of Full Payment Submissions
- Starter Declaration on a Full Payment Submission (FPS)
- PAYE Settlement Agreements and Scottish Income Tax
- National Living Wage and National Minimum Wage – are you paying the correct rate?
- Advisory Electricity Rate for fully electric company cars
- Welsh Rates of Income Tax
- Construction Industry Scheme (CIS) webinars
- Postgraduate Loans
- Benefits and Expenses: Company cars
- Tax avoidance loan schemes – settle now
- Completing an EYU in respect of Employee’s National Insurance Contributions
- Employment Income: Draft Legislation
- Deadline for post 16 Child Benefit looms
For help with payroll matters, please contact us.
‘No deal’ Brexit guidance
The government has issued some ‘no deal’ Brexit technical notices, with the aim of helping both businesses and individuals to prepare in the event of a UK-EU agreement not being realised.
The government has published the first 25 notices. Brexit Secretary Dominic Raab was keen to emphasise that reaching a deal remains the ‘overriding priority’. However, until a Withdrawal Agreement is ratified by the UK and European Parliaments, the possibility of the UK leaving the EU without a deal on 29 March 2019 remains.
The 25 documents cover a range of different areas, including VAT and trading, financial services, farming and workplace rights.
Josh Hardie, Deputy Director General at the CBI, said:
‘It’s right and responsible that the government has supplied information to businesses on issues from financial services passporting to food labelling, all of which will help lower the risks of the harshest outcomes from a ‘no deal’ Brexit.’
The government has confirmed further technical notices will be issued in September.