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Avoiding tax scams

Fraudsters are continuing to target taxpayers with scam emails in advance of the 31 January deadline for submission of Self-Assessment returns.  In fact, over the last year, HMRC received nearly 900,000 reports about suspicious HMRC contacts.

A number of these scams purport to tell taxpayers they are due a rebate / refund of tax from HMRC and ask for bank or credit card details in order to send the fake tax refund. The fraudsters use various means to try and scam people including making contact by phone, text or email. In fact, fraudsters have been known to threaten victims with arrest or imprisonment if a bogus tax bill is not paid immediately.

HMRC’s dedicated Customer Protection team can be contacted to identify and close down scams. For example, HMRC only contact taxpayers due a refund by post and never use emails, text messages or external companies for this activity. Genuine organisations like HMRC and banks will never contact customers asking for their PIN, password or bank details.

If you think you have received a suspicious call or email claiming to be from HMRC, you are asked to forward the details to phishing@hmrc.gov.uk and texts to 60599. If you have suffered financial loss, you should contact Action Fraud on 0300 123 2040 or use their online fraud reporting tool.

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Affected by the recent floods?

The Government has put a number of emergency flood measures in place to help those affected by the recent devastating floods. This includes 100% council tax and business rates relief and emergency funding from the Department for Business, Energy and Industrial Strategy.

Affected taxpayers should also contact the Business Payment Support Service (BPSS) if they cannot make tax payments on time. The BPSS is available to all taxpayers (not just businesses).

If you are unable to pay some or all the tax you owe you need to be pro-active and contact HMRC as soon as possible. Avoiding the issue and hoping the problem will go away is only making things worse. You can contact HMRC to seek to make a payment plan and agree a way forward.

The services offered by the BPSS depend on individual circumstances but can include:

  • agreeing instalment arrangements
  • suspending any debt collection proceedings
  • reviewing penalties for missing statutory deadlines
  • reducing any payments on account
  • agreeing to defer payments due to short-term cash flow difficulties

If you have missed a tax payment and have received a payment demand, like a tax bill or a letter threatening you with legal action, then you need to take immediate action. We can also help deal with this on your behalf.

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Emergency flood relief measures

The Prime Minister has announced that households and businesses that have been significantly affected by the recent flooding will be eligible for immediate 100% relief on their council tax and business rates for at least the next 3 months. This is part of a number of measures that have been announced by the Government to help those affected by the devastating floods.

The Department for Environment, Food and Rural Affairs has confirmed it will extend its Farming Recovery Fund to support farmers badly affected by the recent flooding. The fund will allow farmers and land managers who have suffered uninsurable damage to their property to apply for grants of between £500 and £25,000 to cover repair costs. For example, clearing debris or recovering damaged land.

The Department for Business, Energy and Industrial Strategy will provide funding for a Business Recovery Grant which will provide up to £2,500 per eligible small and medium-sized businesses which have suffered uninsurable losses.

The Government will also provide funding to pay for the recovery costs of local councils where households and businesses have been affected by the severe weather.

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Winter Fuel Payment and tax

The Winter Fuel Payment is a tax-free and provided by the Government to help older people keep warm during the winter. The amount of the payment depends on individual circumstances but ranges from £100 to £300. The amount you receive depends on a number of factors including your age and the age of other people living with you.

The payment is made to households that include someone born on or before 5 April 1954, and who lived in the UK for at least one day during the week of 16 to 22 September 2019, known as the qualifying week.

You will usually receive a Winter Fuel Payment automatically if you are eligible, and if you get the State Pension or another social security benefit (not Housing Benefit, Council Tax Reduction, Child Benefit or Universal Credit). If you are eligible but do not get paid automatically then you will need to make a claim.

The deadline for claiming payments for winter season 2019 to 2020 is 31 March 2020. Most payments are made automatically between November and December. You should get your money by 13 January 2020. As noted above, any money you receive is tax-free and will not affect any other benefits you may receive. The payment is not means-tested.

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Finance Bill 2019-20 shelved

The Government’s draft finance bill has been shelved as we countdown to the general election on 12 December 2019. The consultation on the draft legislation has closed, but the prorogation controversy and Brexit issues meant there was no time for the Government to respond to any of the issues raised.

The Bill contained the legislation for some of the tax measures that were announced by the Government at Autumn Budget 2018. Many of these measures have been the subject of further consultation. The measures expected to come into force from April 2020 included: the extension of off-payroll working rules to the private sector, the introduction of the Digital Services Tax and the new Corporate Capital Loss Restriction. If the Conservatives are re-elected, we are likely to see these measures revived whilst a new Government could make significant changes.

The Chancellor, Sajid Javid, cancelled the Budget that was meant to be presented to Parliament on 6 November 2019. Once again, the cancellation was in response to the calling of a general election. This leaves us with a significant gap since the last Budget was held on 29 October 2018. The next Budget will likely take place during January / February 2020. There are also issues for Scotland's Budget which is currently scheduled for 12 December 2019, and which is expected to be deferred.

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November Budget cancelled

Sajid Javid has cancelled the Budget that was due to be presented to Parliament 6th November.

As the UK will not be leaving the EU at the end of this month and as Boris Johnson is proposing a general election on 12th December, both of these events have rendered a budget inappropriate at this time.

As and when a new date is agreed we will publish details on this news feed.

 

 

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Win while you save

HM Treasury has announced the trial launch of a new PrizeSaver account with participating credit unions. The new account was launched as part of the International Credit Union Day. Eligible savers who open the new account can win up to £5,000 a month by saving as little as £1 a month.

The Treasury has teamed up with 15 credit unions across the UK to launch the new accounts.  Accounts can be opened now with the initial group of participating credit unions. The first prize draws will take place in mid-December. Every month’s prize draw will see a top prize of £5,000 awarded to the winning saver, with a further 20 smaller prizes of £20 also awarded.

The launch of this pilot was announced at last year's Budget and is, according to HM Treasury, designed to help improve people’s financial resilience by encouraging greater saving for the future, as well as raise awareness of credit unions and the services they offer.

The launch of the new scheme was partly inspired by the 'Save to Win' scheme in the US, which has helped credit union members save $200m and has awarded $3.1m in prizes nationwide. The pilot will run until the end of March 2021 and will help inform understanding of the PrizeSaver model. If the pilot is successful, it is expected to be rolled out more widely across the country.

Credit unions are a type of member-owned cooperative, controlled and run by members. Most either serve specific local areas or certain professions like the police. Credit unions redistribute their profits to members through interest or dividends or by investing in new services to meet the needs of their members.

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What is a reasonable excuse?

There are a number of options if you find yourself in disagreement with a tax decision issued by HMRC. As a first step, it is usually possible to make an appeal against a tax decision. There is normally a 30-day deadline for making a claim, so time is of the essence. HMRC will then carry out a review, usually by using HMRC officers that were not involved in the original decision. A response to an appeal is usually made within 45 days but can take longer for complex issues.

In certain cases, it is possible to appeal against penalties on the grounds that you have a 'reasonable excuse' for not complying on time.

HMRC’s guidance lists the following examples of what may count as a reasonable excuse:

  • your partner or another close relative died shortly before the tax return or payment deadline
  • you had an unexpected stay in hospital that prevented you from dealing with your tax affairs
  • you had a serious or life-threatening illness
  • your computer or software failed just before or while you were preparing your online return
  • service issues with HMRC online services
  • a fire, flood or theft prevented you from completing your tax return
  • postal delays that you couldn’t have predicted
  • delays related to a disability you have

However, not receiving a reminder, relying on someone else or making a mistake are amongst the reasons not counted as reasonable excuses.

If you still disagree with HMRC’s review, there are further options available which include making an appeal to a tax tribunal or using the Alternative Dispute Resolution (ADR) process.

We can help. Call if you need guidance on the best way to proceed.

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Compensation limits for bank deposits

What happens if your bank becomes insolvent and you stand to lose any funds deposited?

The bank deposit guarantee limit is the amount of money that is guaranteed, for savers in UK banks and building societies, should the institution become insolvent. The Financial Services Compensation Scheme (FSCS) guaranteed amount is currently £85,000 per person, per authorised bank or building society.

There is additional protection available to savers with certain types of temporary high balances, for example proceeds from a house sale, benefits payable under an insurance policy and inheritances. The additional FSCS protection covers amounts of up to £1m per depositor per life event and is available for up to six months. The FSCS offers unlimited cover for personal injury claims.

The limit is enough to cover the deposits of more than 95% of all savers in the UK. However, savers with more than £85,000 should consider opening multiple bank accounts with separate banks and building societies in order to increase their guaranteed savings limits. The FSCS was set up mainly to assist private individuals, although some businesses and small local authorities (such as parish councils) are also covered. The compensation limit is doubled for joint account holders.

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New £20 note unveiled

The Governor of the Bank of England, Mark Carney, has unveiled the design of the new £20 note featuring the artist JMW Turner. The new note will be launched on 20 February 2020 and will join the current £5 and £10 notes in being printed on polymer, a thin flexible plastic. The new plastic £20 note will include a number of new security features including two windows and a two-colour foil, making it very difficult to counterfeit.

The Governor said:

'Our banknotes celebrate the UK’s heritage, salute its culture, and testify to the achievements of its most notable individuals.  And so, it is with the new £20 banknote, featuring JMW Turner, launched today at Turner Contemporary in Margate. Turner’s contribution to art extends well beyond his favourite stretch of shoreline.  Turner’s painting was transformative, his influence spanned lifetimes, and his legacy endures today. The new £20 note celebrates Turner, his art and his legacy in all their radiant, colourful, evocative glory.'

Once the new plastic £20 note is launched, the process of withdrawing the current paper £20 notes from circulation will begin. The paper £20 notes will remain as legal tender until they are withdrawn. The exact date that the paper notes are to be withdrawn has not yet been announced but at least 6 months in advance notice will be given. It has already been confirmed that a new £50 note will be issued in 2021, featuring Alan Turing, completing the updating of all current Bank of England banknotes.