Tag: HMRC

Government announces phased mandation of Making Tax Digital for Income Tax

Self-employed individuals and landlords will have more time to prepare for Making Tax Digital (MTD) for Income Tax Self Assessment (ITSA), following announcement by the UK Government yesterday.  

Understanding that self-employed individuals and landlords are currently facing a challenging economic environment, and the transition to MTD for ITSA represents a significant change to taxpayers and HMRC for how self-employment and property income is reported, the government is giving a longer period to prepare for MTD. The mandatory use of software is therefore being phased in from April 2026, rather than April 2024.  

From April 2026, self-employed individuals and landlords with an income of more than £50,000 will be required to keep digital records and provide quarterly updates on their income and expenditure to HMRC through MTD-compatible software. Those with an income of between £30,000 and £50,000 will need to do this from April 2027. Most customers will be able to join voluntarily beforehand meaning they can eliminate common errors and save time managing their tax affairs.

The government has also announced a review into the needs of smaller businesses, and particularly those under the £30,000 income threshold. The review will consider how MTD for ITSA can be shaped to meet the needs of these smaller businesses and the best way for them to fulfil their Income Tax obligations. It will also inform the approach for any further roll out of MTD for ITSA after April 2027. 

Mandation of MTD for ITSA will not be extended to general partnerships in 2025 as previously announced. The government remains committed to introducing MTD for ITSA to partnerships in line with its vision set out in the Tax Administration Strategy.  

Victoria Atkins, Financial Secretary to the Treasury, said: “It is right to take the time to work together to maximise the benefits of Making Tax Digital for small businesses by implementing the change gradually.

“It is important to ensure this works for everyone: taxpayers, tax agents, software developers, as well as HMRC.

“Smaller businesses in particular should be able to experience the benefits of increased digitalisation of Income Tax in a way which meets their needs. That is why we are also today announcing a review to establish the best way to achieve this.”

Jim Harra, Chief Executive and First Permanent Secretary, HM Revenue and Customs, said: “HMRC remains committed to the delivery of Making Tax Digital as a critical part of our strategy for digitalising and modernising the tax system, but we want to make sure we get this right and deliver it effectively.  

“A phased approach to mandating MTD for Income Tax will allow us to work together with our partners to make sure that our self-employed and landlord customers can make the most of the opportunities this will bring.” 

The announcement relates to MTD for ITSA only. Making Tax Digital for VAT has already been implemented and is demonstrating the benefits to businesses and the tax system of digital ways of working.  

Get your Self Assessment wrapped up in time for Christmas

With Christmas nearly here, HM Revenue and Customs (HMRC) is encouraging Self Assessment customers to put their tax return at the top of their to-do list.

Last year more than 2,800 customers chose to file their tax return on Christmas Day. But those who get their 2021 to 2022 Self Assessment wrapped up before Christmas can tick it off and enjoy the festivities. 

Self Assessment customers need to complete their tax return and pay any tax owed by the 31 January 2023 deadline or risk having to pay a penalty. Those who file their return before 30 December may also have the option of paying any tax owed through their PAYE tax code.

Filing early means if customers owe money, they have plenty of time to explore which of the payment options available is best for them by visiting GOV.UK. Customers should include their bank account details so that if HMRC needs to repay them it can be done quickly and securely.

Myrtle Lloyd, HMRC’s Director General for Customer Services, said: “We are encouraging customers to plan their Self Assessment as they’d plan for Christmas – get organised, complete their to-do list with plenty of time to avoid that last minute rush. Just search ‘self assessment’ on GOV.UK to make a start.”

The easiest and quickest way to complete a tax return is online through a Personal Tax Account where customers can start their return and go back to it as many times as they need before submitting it. 

To make it even simpler, customers can now use the free and secure HMRC app to get their Unique Taxpayer Reference (UTR), make Self Assessment payments and obtain their National Insurance number and employment history . 

HMRC has a wide range of resources to help customers complete their tax return, including guidance, webinars and YouTube videos.

Customers need to be aware of the risk of scams as criminals use Self Assessment as an opportunity to commit fraud. Customers must never share their HMRC login details as criminals use them to steal or make a fraudulent claim. Customers should check HMRC’s scams advice on GOV.UK

Find out more about Self Assessment.

£50 million in Self Assessment payments made via the HMRC app

More than 50,000 customers have used the app to make £50 million in Self Assessment payments since February 2022, HM Revenue and Customs (HMRC) has revealed. 

Customers have been able to pay their Self Assessment tax bill via the free and secure HMRC app since February 2022.

Thousands of people are now choosing to use the app to make Self Assessment payments because it is a quick and easy way to manage any tax they owe. In October, more than 6,700 Self Assessment customers paid almost £5.9 million in tax via the HMRC app, compared to around 2,500 customers in February 2022, who paid £1.8 million.

The deadline for customers to complete their tax return for the 2021 to 2022 tax year and pay any tax owed is 31 January 2023.

Myrtle Lloyd, HMRC’s Director General for Customer Services, said: “We’re seeing more and more people embrace the convenience and flexibility the HMRC app offers. Self-Assessment customers can pay the tax owed through the HMRC app, which is a secure and convenient tool that can be used at a time and place to suit them. 

“To find out more search ‘HMRC app’ on GOV.UK.” 

For anyone yet to start their tax return, the HMRC app can also provide information to help complete it including the customer’s Unique Taxpayer Reference (UTR), National Insurance number, information from any PAYE employment for the 2021 to 2022 tax year, or details of any tax credits payments.

App users will need a user ID and password to access their personal information. They can set this up while using the app. 

The app’s Self Assessment function is also available in Welsh. Customers can enable Welsh language options from the settings screen.

Self Assessment customers can learn more about the different ways to pay at GOV.UK.

Those who are unable to pay their tax bill in full can access support and advice on GOV.UK. HMRC may be able to help by arranging an affordable payment plan, known as Time to Pay. Customers should try to do this online; go to GOV.UK for more information. Alternatively, they can contact the helpline. 

HMRC has a wide range of resources to help customers complete their tax return, including guidance, webinars and YouTube videos.

How do I use the HMRC app to make a Self Assessment payment?

People completing a tax return are at increased risk of falling victim to scams. Check HMRC scams advice on GOV.UK.

HMRC: 656,000 people in Scotland filed their tax returns on time

HM Revenue and Customs (HMRC) is reminding customers in Scotland to get ready to meet the Self Assessment deadline, after more than 656,000 filed their tax returns on time. 

In Scotland, 656,547 customers filed their returns for the tax year 2020 to 2021 by 31 January 2022.

The deadline to submit a tax return for the 2021 to 2022 tax year and pay any tax due is 31 January 2023. Customers do not need to wait until the new year to begin their tax return. Starting early means more time to access guidance and webinars to help complete the return and find out what tax they owe, so they can budget.  

Myrtle Lloyd, HMRC’s Director General for Customer Services, said: “There is still time to complete your tax return ahead of the deadline and there are videos and guidance available online to support you with your Self Assessment. Search ‘help with Self Assessment’ on GOV.UK to find out more.”

HMRC has produced guidance notes and YouTube videos to help customers understand how to complete their return quickly and easily. 

The free and secure HMRC app can be used to make Self Assessment payments. Alternative payment options include:

  • paying through PAYE tax code (subject to eligibility)  
  • paying via online banking

Those who are unable to pay their tax bill in full can access support and advice on GOV.UK. HMRC may be able to help by arranging an affordable payment plan, known as Time to Pay. Customers should try to do this online; go to GOV.UK for more information. Alternatively, they can contact the helpline.

Customers who are unsure if they need to file a tax return can visit GOV.UK to check if they need to send a Self Assessment tax return.

People completing a tax return are at increased risk of falling victim to scams. Check HMRC scams advice on GOV.UK.

Christmas workers can save time with HMRC app

As tens of thousands of people start seasonal jobs over the next few weeks, they can use the HM Revenue and Customs (HMRC) app to save them time to find details they need to pass on to their employer.

In the 12 months up to October 2022, HMRC received almost 3 million calls from people asking for information that is now readily available on the app, with more than 340,000 using it to access employment and income information since July 2022.

Downloading the free and easy to use HMRC app allows secure access to information about personal tax affairs, avoiding the need to call HMRC.

New functions and capability mean that customers can access their income and employment history, salary information, National Insurance number or tax code via the app, whenever they need it.

The information can be downloaded and printed – so there is no need to call HMRC to ask for it to be sent in the post. This means that using the app rather than calling the helpline makes the process much quicker.

Myrtle Lloyd, HMRC’s Director General of Customer Services, said: “Whether you’re starting a new role in customer services, delivering parcels or managing warehouse logistics – the HMRC app is a secure and easy way to access your tax code, National Insurance number and employment details so you can let your new employer know.

“It’s accessible at the touch of a button and is quicker than calling HMRC. To find out how to download it, search ‘HMRC app’ on GOV.UK.”

https://youtu.be/JW9rksc5izk

Victoria Atkins MP, Financial Secretary to the Treasury, said: “Christmas is busy enough – especially if you have taken on a seasonal job – so anything which can save you time is to be welcomed.

“The free and secure HMRC app is just such a thing, it makes searching for employment information quick and easy, whether you need to check your National Insurance number, find out how much you will be paid and much more.”

App users will need a user ID and password, so they can access their personal information. If customers need to set one up, the app will guide them through the process.

More than 3.5 million people have used the HMRC app since it launched in September 2016, and more than 1.6 million customers used it at least once in the last year.

HMRC has released a video which explains how customers can use the HMRC app to check their employment history, income, tax codes and National Insurance number.

The app is compatible with built-in accessibility functions on a customer’s smartphone including:

·         invert colours and adjust contrast levels

·         increase the text size without the text truncating or overlapping

·         navigate the app using switch control/access

·         using voice activation

·         listen to the app with a screen reader

The UK Government is offering help for households as a result of the increased cost of living pressures. Visit GOV.UK to find out more about the available cost-of-living support and eligibility requirements.

HMRC: More than 24,900 families in Scotland saved on childcare costs in September

More than 24,900 families in Scotland benefitted from UK Government funding towards childcare costs in September 2022, HM Revenue and Customs (HMRC) has revealed.

Overall, HMRC paid out £44.4 million in Tax-Free Childcare top up payments to more than 401,300 families across the UK in September.

Compared to September 2021, the latest Tax-Free Childcare statistics show the number of families in Scotland who are using Tax-Free Childcare has increased by 6,415. But thousands of families are still missing out on the top-up which could save them up to £2,000 a year per child towards the cost of their childcare.

Tax-Free Childcare provides working families, earning up to £100,000 a year, with financial help towards childcare. For every £8 paid into a Tax-Free Childcare online account, families will automatically receive an additional £2 from the UK Government. This means they can receive up to £500 every three months (£2,000 a year), or £1,000 (£4,000 a year) if their child is disabled.

The top up payments can be used to pay for any approved childcare for children aged 11 or under, or up to 17 if the child has a disability whether your child goes to nursery, a child minder, has term-time wraparound care or goes to a holiday club.

Families can check their eligibility and see the options for childcare support at Childcare Choices.

Myrtle Lloyd, HMRC’s Director General for Customer Services, said: “We know childcare can be expensive so using Tax-Free Childcare can make a huge difference to household finances. To find out more, search ‘Tax-Free Childcare’ on GOV.UK.”

Families could be eligible for Tax-Free Childcare if they:

·         have a child or children aged 11 or under. They stop being eligible on 1 September after their 11th birthday. If their child has a disability, they may get up to £4,000 a year until they are 17

·         earn, or expect to earn, at least the National Minimum Wage or Living Wage for 16 hours a week, on average

·         each earn no more than £100,000 per annum

·         do not receive tax credits, Universal Credit or childcare vouchers

A full list of the eligibility criteria is available on GOV.UK.

Opening an online Tax-Free Childcare account is straightforward and can take around 20 minutes to sign up.

Accounts can be opened at any time, money can be deposited and used straight away or when it’s needed. Unused money in the account can be withdrawn at any time. Go to GOV.UK to register to get started.

The UK Government has launched an awareness raising advertising campaign to ensure families get the childcare support they are entitled to. Visit Childcare Choices to learn about the options and find out the best childcare offer for families.

The government is offering help for households. Check GOV.UK to find out what cost of living support, including help with childcare costs, families could be eligible for.

Online payment plans help almost 21,600 customers pay their Self Assessment bill

Since 6 April 2022, almost 21,600 Self Assessment customers, who were unable to pay their tax bill in full, have set up a payment plan to spread the cost into manageable monthly instalments – an increase of around 3,900 customers on the previous year – HM Revenue and Customs (HMRC) has revealed.

The deadline for customers to submit their tax returns for the 2021 to 2022 tax year and pay any tax owed is 31 January 2023 and HMRC is encouraging anyone yet to complete their return to do it early. Those who have already completed their Self Assessment know what they owe and can budget to make payments on time.

Filing early also means customers, who are unable to pay their tax bill in full by the deadline, will have plenty of time to access support and advice on GOV.UK. HMRC may be able to help by arranging an affordable payment plan.

Visit GOV.UK to find out more about Time to Pay arrangements.

In the 12 months to 5 April 2022, almost 142,000 customers chose to use self-serve Time to Pay to pay any tax owed for the 2020 to 2021 tax year, spreading the cost of around £475 million into monthly instalments.

Myrtle Lloyd, HMRC’s Director General for Customer Services, said: “We’re here to help customers get their tax right and if you are worried about how to pay your Self Assessment bill, help and support is available. Visit GOV.UK and search ‘help pay Self Assessment’ to find out more.”

Using HMRC’s self-serve Time to Pay facility means customers benefit from a tailored payment plan via monthly direct debits.

This means they can spread the cost of their tax bill based on how much is owed and the length of time they need to pay. Self Assessment customers can apply on GOV.UK if they:

·         have filed their tax return for the 2021 to 2022 tax year

·         owe less than £30,000

·         can pay in full within 12 months

If customers owe more than £30,000, or need longer to pay, they should call the Self Assessment Payment Helpline on 0300 200 3822.

A list of alternative payment options, including payment via the free and secure HMRC App, are available on GOV.UK.

A full list of payment options and eligibility criteria is available on GOV.UK by searching ‘HMRC payment option’.

Help and support is available on GOV.UK for those completing their Self Assessment tax returns. There is also a series of videos on YouTube.

All Self Assessment customers need to be alert to the risk of criminals emailing, calling or texting claiming to be from HMRC. Scams come in many forms – some threaten immediate arrest for tax evasion, others offer a tax rebate.

Contacts like these should set alarm bells ringing and HMRC advises customers to take their time and check scams advice by searching for ‘HMRC scams’ on GOV.UK. HMRC also urges customers never to share their HMRC login details. Someone using them could steal from the customer or make a fraudulent claim in their name.

HMRC: Self Assessment – don’t forget to declare COVID-19 payments

HM Revenue and Customs (HMRC) is reminding Self Assessment customers that they must declare COVID-19 payments in their tax return for the 2021 to 2022 tax year.

More than 2.9 million people claimed at least one Self-Employment Income Support Scheme (SEISS) payment up to 5 April 2022. These grants are taxable and should be declared on tax returns for the 2021 to 2022 tax year before the deadline on 31 January 2023.

The SEISS application and payment windows during the 2021 to 2022 tax year were:

·         SEISS 4: 22 April 2021 to 1 June 2021

·         SEISS 5: 29 July 2021 to 30 September 2021

SEISS is not the only COVID-19 support scheme that should be declared on tax returns. If customers received other support payments during the 2021 to 2022 tax year, they may need to report this on their tax return if they are:

  • self-employed
  • in a partnership
  • a business

Customers can check which COVID-19 grants or payments they need to report to HMRC on GOV.UK. This applies to payments received during the 2021 to 2022 tax year.

Myrtle Lloyd, HMRC’s Director General for Customer Services, said: “We want to help customers get their tax returns right, first time. We have videos and guidance available online to support you with your Self Assessment. Search ‘help with Self Assessment’ on GOV.UK to find out more.”

Help and support is available on GOV.UK for those completing their Self Assessment tax returns. There is also a series of videos on YouTube.

The free and secure HMRC app can be used to make Self Assessment payments. Alternative payment options include:

·         paying through PAYE tax code (subject to eligibility) 

·         paying via online banking

Those who are unable to pay their tax bill in full can access the support and advice that’s available on GOV.UK. HMRC may be able to help by arranging an affordable payment plan, known as a Time to pay. Customers should try to do this online, go to GOV.UK for more information. Alternatively, they can contact the helpline.

All Self Assessment customers need to be alert to the risk of criminals emailing, calling or texting claiming to be from HMRC. Scams come in many forms – some threaten immediate arrest for tax evasion, others offer a tax rebate.

Contacts like these should set alarm bells ringing and HMRC advises customers to take their time and check scams advice by searching for ‘HMRC scams’ on GOV.UK. HMRC also urges customers never to share their HMRC login details. Someone using them could steal from the customer or make a fraudulent claim in their name.

Self Assessment: 100 days to go

Tick Tock! 100 days left on the Self Assessment clock!

With 100 days to go until the deadline for online returns, HM Revenue and Customs (HMRC) is reminding Self Assessment customers that the countdown to complete their tax return has begun.

Self Assessment customers have until 31 January 2023 to submit their online return for the 2021 to 2022 tax year.

More than 66,000 taxpayers beat the clock and filed their tax return on 6 April – the first day of the new tax year. HMRC is encouraging others to complete their return as soon as they can, so they know what they owe and can budget to make the payment by 31 January 2023. This also means that if a repayment is due, it can be claimed back sooner.

More information about Self Assessment can be found on GOV.UK.

Completing a tax return using HMRC’s online filing service is simple and convenient. Last year, more than 95% of customers filed online with many choosing to start it, save their progress and go back to it as many times as they need before it’s ready to submit. Those who submit their returns early still have until 31 January 2023 to pay.

Myrtle Lloyd, HMRC’s Director General for Customer Services, said: “With 100 days to go until the online deadline, there’s still time to complete your tax return, to budget and look into the range of payment options if you need to.

“Help and support is available online to help customers with their tax returns. Just search ‘Self Assessment’ on GOV.UK to find out more and get started today.”

Filing early also means they will have plenty of time to access the number of payment options available including:

  • paying via the free and secure HMRC App
  • setting up an online monthly payment plan (self-serve Time to Pay)
  • paying through PAYE tax code (subject to eligibility) 
  • payment on account

Those who are unable to pay their tax bill in full can access the support and advice that’s available on GOV.UK. HMRC may be able to help by arranging an affordable payment plan.

HMRC has updated their Self Assessment guide to help customers complete their tax return. The guide contains helpful information including:

·         what help and support is available when completing their Self Assessment

·         what documents they need before they start

·         what earnings they need to declare including funds received through COVID support schemes

·         help with paying their tax bill and what to do if they have overpaid and are due a refund

All Self Assessment customers need to be aware of the risk of scams and HMRC is reminding them never to share their login details. Someone using them could steal from the customer or make a fraudulent claim in their name. Check HMRC’s advice about scams on GOV.UK. 

Anyone can check if they need to complete a tax return by using the free online tool on GOV.UK.

Those new to Self Assessment for the 2021 to 2022 tax year may include:

  • those who are newly self-employed and earned more than £1,000
  • a new partner in a business partnership
  • those who have received any untaxed income
  • those claiming Child Benefit but they or their partner have an income above £50,000

Self-employed workers must also register for Class 2 National Insurance contributions.

Over one million families claiming tax credits to receive second Cost of Living Payment from 23 November

More than one million claimant families receiving tax credits, and no other means-tested benefits, will get their second Cost of Living Payment from Wednesday 23 November 2022, HM Revenue and Customs (HMRC) has confirmed.

This £324 UK Government payment will be paid automatically into most eligible tax credit-only customers’ bank accounts between 23 and 30 November 2022 across the United Kingdom.

Angela MacDonald, HMRC’s Deputy Chief Executive and Second Permanent Secretary, said:

“This second Cost of Living Payment will provide further financial support to eligible tax credit-only claimants across the UK.

“The £324 will be paid automatically into bank accounts, so people don’t need to do anything to receive this extra help.”

The second payment will see more than 8 million households across the UK receive their £324 cost of living cash boost by 30 November and follows the first cost of living payments of £326, which eligible families received from Department for Work and Pensions (DWP) from July and HMRC from September.

The UK Government recently announced that households receiving DWP benefits will get their second Cost of Living Payment from 8 November continuing through to 23 November. This includes tax credit claimants who also receive other income-related benefits from DWP.

HMRC is making payments shortly after DWP in order to avoid duplicate payments.

This latest payment comes on top of wider UK Government support with the cost of living this autumn and winter, including:

·         the £150 Disability Cost of Living Payment, already paid to around 6 million disabled people

  • more than 8 million pensioner households who will receive an extra one-off £300 Winter Fuel Payment this year 

This is in addition to an extension to the Household Support Fund, which is providing an extra £421 million for use between October 2022 and March 2023 to help vulnerable people with the essentials. A £150 Council Tax rebate was sent earlier this year to those in Council Tax bands A to D in England, creating at least £1,200 in direct support for millions of households.

A £400 reduction on energy bills is also being given to all domestic electricity customers over the coming months, and the Energy Price Guarantee is protecting households from significant rises in their energy bills this winter.

The UK Government is offering help for households. Customers should check GOV.UK to find out what cost of living support they could be eligible for. 

Additional Information:

  • Cost of living payments were announced in May 2022. Details of the first DWP and HMRC payments were publicised in June, July and August 2022. In October 2022 the DWP announced details of their second payment.
  • The latest payment schedule information, which will be updated on 20 October to show that the second HMRC payments will be made between 23 and 30 November, is available here.
  • Tax credit-only customers, who will receive the second payment between 23 and 30 November 2022, must have received a payment or an annual award of at least £26 of tax credits for any day in the period 26 August 2022 to 25 September 2022, or later found to be entitled to tax credits for this period.
  • For joint claimants, where one claimant receives Working Tax Credit and the other claimant receives Child Tax Credit, payments will be made into the same bank account as the Child Tax Credit. 
  • To be eligible for the second DWP payment, families must have been entitled to a payment (or later found to be entitled to a payment) of either:
    • Universal Credit for an assessment period that ended in the period 26 August 2022 to 25 September 2022
    • income-based JSA, income-related ESA, Income Support or Pension Credit for any day in the period 26 August 2022 to 25 September 2022
  • Customers do not need to apply for this payment. If customers are eligible through receiving tax credits only, HMRC will make the Cost of Living Payment automatically into the bank account where claimants already receive their tax credits. Customers might find that their payment is delayed if they have recently closed the bank account their tax credits are usually paid into.
  • If customers have not let HMRC know that their bank account has changed, HMRC will pay the money into their old bank account, meaning the payment will be rejected. If this happens, HMRC will follow this up by letter to the customer, letting them know that we need updated bank details.
  • If tax credit customers believe they are eligible but have not received a payment between the published payment dates, they should wait until 7 December at the earliest to contact HMRC. This is to allow time for their bank, building society or credit union to process the payment. We won’t be able to provide customers with any further information before this date.
  • More than 8 million families on means-tested benefits will receive up to £650 this year, made in two payments. This includes all families entitled to a payment of the following benefits: Universal Credit, Income-based Jobseekers Allowance, Income-related Employment and Support Allowance, Income Support, Working Tax Credit, Child Tax Credit and Pension Credit.
  • This payment is tax-free, will not count towards the benefit cap, and will not have any impact on existing benefit awards.
  • These payments are being delivered in two slightly different amounts of £326 and £324. The distinct value relates to a specific qualifying period, so it is simpler to determine if a payee received the correct payments, reducing the fraud risk of people who claim not to have had one of the specific two payments, as HMRC and DWP will be able to clearly track those who have.
  • Beware of scams targeting cost of living payments. If someone contacts you about cost of living payments saying they are from HMRC, it might be a scam.
  • You don’t need to apply for this payment. HMRC will never ask for your bank details by SMS or email. Don’t let yourself be rushed. Check advice on spotting scams by visiting GOV.UK and searching ‘phishing and scams’. You can find phone numbers, and other ways to contact us, on GOV.UK – search ‘Contact HMRC’ and choose ‘tax credits’.