Tag: HMRC

HMRC: Get help with summer holiday childcare costs

HM Revenue and Customs (HMRC) is reminding thousands of parents and families in Scotland not to miss out on financial support that can help pay for childcare during the summer holidays.

Through Tax-Free Childcare, families can receive up to £2,000 a year per child – or £4,000 if their child is disabled – to put towards the cost of childcare. And it is available for children aged up to 11, or 17 if the child has a disability. The money can help towards the cost of holiday clubs, before and after-school clubs, childminders and nurseries, and other approved childcare schemes.

The UK Government will pay 20% of childcare costs by topping up the money paid into a Tax-Free Childcare account. This means for every £8 paid into the online account, families will automatically receive an additional £2 in government top-up.

More than 22,700 families in Scotland used Tax-Free Childcare in March 2022 – the highest number of families recorded using the scheme since it was launched in April 2017 – but thousands more could be missing out. Research published earlier this year by HMRC estimated that about 1.3 million families could be eligible for this UK Government support.

Parents and carers are being urged find out more about Tax-Free Childcare via the Childcare Choices website.

Myrtle Lloyd, HMRC’s Director General for Customer Services, said: “Tax-Free Childcare can make a big difference to families, helping with the bills for things like holiday clubs, nurseries, childminders and after school clubs.

“It’s easy to register – search ‘Tax-Free Childcare’ on GOV.UK.”

Helen Whately, HM Treasury’s Exchequer Secretary to the Treasury, said: “Tax-Free Childcare helps families with the cost of childcare bills but we know that thousands of parents could be missing out.

“That is why I’m encouraging families to sign up now and save on childcare costs.

“There are lots of fantastic holiday clubs and childcare providers to help working parents during the summer holidays, so now is the time to take advantage of this support.”

For thousands of families who use Tax-Free Childcare, the money they save each month on their childcare costs is money that goes back into their pockets. Accounts can be opened at any time of the year and can be used straight away, and money can be deposited at any time and used when needed. Any unused money that is deposited can be simply withdrawn at any time.

During the school summer holidays, it is more important than ever that parents and carers are able to access the financial aid they qualify for. It can reduce their costs, help them to stay in work, or help them work more hours.

More than one million families in the UK are entitled to some form of UK Government childcare support and the government is encouraging those eligible to not miss out on their entitlements.

Families can find out what childcare support is best for them via Childcare Choices.

To ensure that parents get the childcare support they are entitled to, the government is launching an awareness raising advertising campaign this week.

Council operation stops sales of illegal tobacco in Leith

Almost £26,000 worth of illegal tobacco has been taken off the shelves by the City of Edinburgh Council’s Trading Standards team and Police Scotland.

Operation CeCe is a UK wide operation targeting illicit tobacco, which is either duty evaded, counterfeit or both and the recent operations in the capital resulted in the seizure of almost £26,000 worth of stock. It included 22,600 cigarettes and 10Kg of hand rolling tobacco which in turn represented evaded duty of over £10,600 defrauded from public funds.

Acting upon intelligence received, Officers from the City of Edinburgh Council’s Trading Standards team, in partnership with officers from Police Scotland, attended a number of premises in the Leith Walk area of the city, along with tobacco detection dog Boo.

Transport and Environment Convener, Councillor Scott Arthur, said: “These recoveries are a fantastic result for our Trading Standards team who work hard to identify and tackle unsafe and illegal products. Stopping such products reaching consumers in Edinburgh and beyond is a testament to their proactive strategy and dedication.

“I am, of course, concerned that this market exists within Edinburgh. These products have not had the required duty paid on them, but also do not comply with the plain packaging, warning requirements, and where they are counterfeit, breach Trade Marks legislation. No tobacco product is safe, but the recovered goods may not comply with the requirements designed to ensure that cigarettes are self-extinguishing to prevent domestic fires.

“Illicit and Counterfeit Tobacco evades taxation and often ends up in the hands of young people, and for that reason tackling it is a key part of Edinburgh’s contribution to the Scottish Government aim to achieve a Smoke Free Generation by 2034.

“We are committed to tackling the supply of illicit tobacco, and will work with our partners in Police Scotland and HMRC wherever possible to disrupt its supply. Legitimate retail sale of tobacco is also disadvantaged where illicit supply routes exist, and we would encourage any legitimate business owners to come forward with any information.”

Consultation launched to address concerns about repayment agents

New measures to stop rip-off agents taking advantage of people and pocketing their tax repayments have been proposed by HM Revenue and Customs (HMRC).

HMRC has launched a 12-week consultation “Raising standards in tax advice: Protecting customers claiming tax repayments” to consider ways to better protect taxpayers from Repayment Agents who make routine tax claims on people’s behalf but can take up to half, or even more, of the payment.

Taxpayers can use Repayment Agents to make claims for repayments of tax, and many are happy with the service they receive. On the other hand, many taxpayers have complained that the scale of the charges are unclear or even hidden, while questions have been raised about how some agents secure agreements from customers.

The consultation proposes various ways to better protect the public from unscrupulous practices and ensure they receive the money they are entitled to, while also asking various questions to better understand the problem.

This includes seeking views on:

  • restricting the use of assignments, where contracts legally transfer the right to a repayment from a taxpayer to an agent
  • introducing measures designed to ensure taxpayers see material information about a repayment agent’s service before entering into a contractual agreement
  • requiring repayment agents to register with HMRC

HMRC is aware of a number of specific concerns with the industry including excessive amounts of commission charged for routine tax repayments. However, taxpayers can make a claim directly through HMRC’s free online service on GOV.UK and keep 100% of the repayment themselves.

There is also strong evidence that many taxpayers do not understand the terms they are signing up to and feel misled, some even believing they are dealing with HMRC directly rather than a third party.

Other concerns include the submission of high volume or speculative claims where no repayment is due, resulting in delays to genuine claims, as well as the use of assignments which means the repayment goes to the Repayment Agent instead of the taxpayer.

Jonathan Athow, HMRC’s Director General for Customer Strategy and Tax Design, said: “We want to make sure taxpayers receive their full tax claims – putting 100% of the money they are due into their pockets – and not be taken in by the unscrupulous practices of some Repayment Agents.

“The ‘Raising standards in tax advice’ consultation aims to seek views so we can better understand and address the issues to help raise standards in the tax advice market. We’re urging anyone affected to respond to the consultation and share their experiences.”

HMRC is interested in hearing the views of all tax agents, particularly those who specialise in helping taxpayers claim repayments; taxpayers who have claimed or considered claiming tax refunds through repayment agents; those who have seen adverts from repayment agents; charitable organisations; consumer groups; and accountancy professional bodies.

The consultation is now open and will run until 14 September 2022. 

HMRC is also reminding taxpayers that they remain responsible for their own tax. If they do appoint an agent, they should take care to ensure they are aware of fees and the terms and conditions of service, and not to share their HMRC login details with them.

HMRC has published standards for agents and will take action against agents who breach them.

HMRC: More than 29,000 families in Scotland used Tax-Free Childcare in the last year

New Tax-Free Childcare statistics from HM Revenue and Customs (HMRC) have revealed that 29,110 families in Scotland received up to £2,000 towards the cost of their childcare during the 2021 to 2022 tax year, up from 20,330 in the previous year.

Tax-Free Childcare provides thousands of eligible working families with vital financial support towards the cost of their childcare with the government paying £240 million annually in top-up payments to families using the scheme.

For thousands of families who use Tax-Free Childcare, the money they save each month on their childcare costs is money that goes back into their pockets.

For every £8 paid into a Tax-Free Childcare online account, families will automatically receive an additional £2 in government top-up, and it is available for children aged up to 11, or 17 if the child has a disability.

Families receive up to £500 every three months, per child, or £1,000 if their child is disabled, helping towards the cost of before and after-school clubs, childminders and nurseries, holiday clubs and other approved childcare schemes.

But hundreds of thousands of families could be missing out, with recent research published by HMRC estimating that about 1.3 million families could be eligible for this government support. Parents and carers are being urged to check their eligibility and register for Tax-Free Childcare via GOV.UK.

Across the UK, 512,415 families used Tax-Free Childcare in the 2021 to 2022 tax year, compared to 374,135 in the 2020 to 2021 tax year.

Myrtle Lloyd, HMRC’s Director General for Customer Services, said: “Tax-Free Childcare can make a big difference to families, helping with the bills for things like nurseries, childminders and after school clubs. It’s easy to register – search ‘Tax-Free Childcare’ on GOV.UK.”

Helen Whately, HM Treasury’s Exchequer Secretary to the Treasury, said: “It’s fantastic that more parents are taking up Tax-Free Childcare. This support provides a helping hand with childcare costs for working families.

“With over one million families eligible, I want to encourage parents to take advantage of Tax-Free Childcare and keep the extra pounds in their pocket.”

The latest monthly comparisons for Scotland also show that a record number of families were using their Tax-Free Childcare account in March 2022 – 22,710 families compared to 15,240 in March 2021 – an increase of 7,470 families.

The scheme offers a 20% government funded top-up on money deposited into Tax-Free Childcare accounts, which can be used to pay their childcare provider. Accounts can be opened at any time of the year and can be used straight away, and money can be deposited at any time and used when needed.

For example, if parents and carers have school-aged children and use holiday clubs during school holidays, they could deposit money into their accounts throughout the year. This means they could spread the cost of childcare while also benefitting from the 20% government top-up. Any unused money that is deposited can be simply withdrawn at any time.

Tax-Free Childcare is also available for pre-school aged children attending nurseries, childminders, or other childcare providers. Families with younger children will often have higher childcare costs than families with older children, so the tax-free savings can really make a difference.

Childcare providers can also sign up for a childcare provider account via GOV.UK to receive payments from parents and carers via the scheme.

Tax credits customers warned about scammers posing as HMRC

HM Revenue and Customs (HMRC) is warning tax credits customers to be aware of scams and fraudsters who imitate the department in an attempt to steal their personal information or money.

About 2.1 million tax credits customers are expected to renew their annual claims by 31 July 2022 and could be more susceptible to the tactics used by criminals who mimic government messages to make them appear authentic.

In the 12 months, to April 2022, HMRC responded to nearly 277,000 referrals of suspicious contact received from the public. Fraudsters use phone calls, text messages and emails to try and dupe individuals – often trying to rush them to make decisions. HMRC will not ring anyone out of the blue threatening arrest – only criminals do that.

Typical scam examples include:

·         phone calls threatening arrest if people don’t immediately pay fictitious tax owed. Sometimes they claim that the victim’s National Insurance number has been used fraudulently

·         emails or texts offering spurious tax rebates, bogus COVID-19 grants or claiming that a direct debit payment has failed

Myrtle Lloyd, HMRC’s Director General for Customer Services, said: “We’re urging all of our customers to be really careful if they are contacted out of the blue by someone asking for money or bank details.

“There are a lot of scams out there where fraudsters are calling, texting or emailing customers claiming to be from HMRC. If you have any doubts, we suggest you don’t reply directly, and contact us straight away. Search GOV.UK for our ‘scams checklist’ and to find out ‘how to report tax scams’.”

HMRC does not charge tax credits customers to renew their annual claims and is also urging them to be alert to misleading websites or adverts designed to make them pay for government services that should be free, often charging for a connection to HMRC phone helplines.

Customers can renew their tax credits for free via GOV.UK or the HMRC app and are advised to search GOV.UK to get the genuine information and guidance.

Renewing online is quick and easy. Customers can log into GOV.UK to check the progress of their renewal, be reassured it is being processed and know when they will hear back from HMRC. Customers choosing to use the HMRC app on their smartphone can:

  • renew their tax credits
  • update changes to their claim
  • check their tax credits payments schedule, and
  • find out how much they have earned for the year

HMRC has released a video to explain how tax credits customers can use the HMRC app to view, manage and update their details.

If there is a change in a customer’s circumstances that could affect their tax credits claims, they must report the changes to HMRC. Circumstances that could affect tax credits payments include changes to:

·         living arrangements

·         childcare

·         working hours, or

·         income (increase or decrease)

Tax credits are ending and will be replaced by Universal Credit by the end of 2024. Many customers who move from tax credits to Universal Credit could be financially better off and can use an independent benefits calculator to check.

If customers choose to apply sooner, it is important to get independent advice beforehand as they will not be able to go back to tax credits or any other benefits that Universal Credit replaces.

HMRC: Almost 66,500 file their Self Assessment on 6 April

Nearly 66,500 customers filed their 2021 to 2022 tax return on the first day of the new tax year – 6 April 2022 – HM Revenue and Customs (HMRC) has confirmed.

In recent years, there has been an increasing number of ‘early-bird’ customers filing their completed Self Assessment tax returns at the start of the new tax year – almost 30,000 more customers filed their returns on 6 April this year, compared to 2018 – and HMRC is encouraging others to change their filing habits and do it as soon as they can.

Customers have been able to file their 2021 to 2022 Self Assessment tax return since 6 April. And while many wait until nearer the annual filing deadline on 31 January, for some it is an opportunity to beat the last-minute rush and get it done as soon as they can, while they have the relevant information to hand.

Customers can file their tax return online. It is the quickest way to complete a Self Assessment return and it does not need to be finished in one go, as customers can access their return online anytime and save their progress until it is completed and ready to submit.

Customers who file their tax return early could benefit from:

·         receiving a tax refund on any overpaid tax from the 2021 to 2022 tax year sooner. Once a customer has filed their tax return, they can check if a repayment is due via their Personal Tax Account

·         managing their tax bill via direct debit. Customers can use the Budget Payment Plan service to set up weekly or monthly direct debit payments to spread the cost of any tax owed. The Self Assessment tax payment deadline for balancing payments remains unchanged – 31 January 2023

Myrtle Lloyd, HMRC’s Director General for Customer Services, said: “You don’t need to wait for the January rush to send us your tax return. More and more people are getting theirs out of the way early – search ‘Self Assessment’ on GOV.UK to get started.”

HMRC has updated the Self Assessment guide to help customers navigate through the tax return process. It includes helpful information on:

·         how to get help with your tax return

·         what to do when declaring furlough payments, Self-Employment Income Support Scheme grants or other COVID-19 support measures

·         what information you need before you can start completing your tax return

·         help with paying your Self Assessment tax bill

·         what to do if you have overpaid tax and are due a refund

Earnings and payments received during the pandemic will need to be reported on the tax return meaning customers must declare any grants or payments from the COVID-19 support schemes received between 6 April 2021 and  5 April 2022 as these are taxable, including: 

  • Self-Employment Income Support Scheme 
  • Coronavirus Job Retention Scheme 
  • other COVID-19 grants and support payments
  • any coronavirus payments incorrectly claimed

The Self Assessment deadline to file a return and pay any tax owed for the 2021 to 2022 tax year is 31 January 2023.

HMRC seizes 1 million cigarettes & 12,000 litres of alcohol from West Lothian storage unit

An investigation is underway after 1.1 million suspected illicit cigarettes and more than two dozen pallets of alcohol were seized by HM Revenue and Customs (HMRC).

Officers made the discovery inside a unit at an industrial park in Whitburn, West Lothian, on Wednesday (27 April 2022).

As well as the cigarettes, 28 pallets of alcohol were seized, including vodka, whisky and prosecco.

The goods found in the unit are believed to be worth an estimated £631,000 in lost duty and taxes.

A van and a forklift at the scene were also seized, plus £5,000 cash. No arrests have been made and enquiries are continuing.

Anyone with information about the illegal sale of cigarettes and alcohol should report it to HMRC online at gov.uk.

HMRC: 2.1 million annual tax credits packs to be issued

About 2.1 million tax credits customers will begin to receive their annual renewal packs this week from HM Revenue and Customs (HMRC).

The packs will be sent between 25 April and 27 May, and customers have until 31 July to check their details are correct and update HMRC if there has been a change in their circumstances.

Tax credits help working families with targeted financial support, so it is important that people do not miss out on money they are entitled to.

There are two types of renewal packs:

·         if it has a red line across the first page and says ‘reply now’, customers will need to confirm their circumstances to renew their tax credits

·         if it has a black line across the first page and says ‘check now’, customers will need to check their details are correct. If correct, customers do not need to do anything and their tax credits will be automatically renewed

About 630,000 customers will need to confirm their circumstances to renew their tax credits for the 2022 to 2023 tax year.

Customers can renew their tax credits for free via GOV.UK or the HMRC app.

Renewing online is quick and easy. Customers can log into GOV.UK to check the progress of their renewal, be reassured it is being processed and know when they will hear back from HMRC. Customers choosing to use the HMRC app on their smartphone can:

  • renew their tax credits
  • update changes to their claim
  • check their tax credits payments schedule, and
  • find out how much they have earned for the year

HMRC has released a video to explain how tax credits customers can use the HMRC app to view, manage and update their details.

If there is a change in a customer’s circumstances that could affect their tax credits claims, they must report the changes to HMRC. Circumstances that could affect tax credits payments include changes to:

·         living arrangements

·         childcare

·         working hours, or

·         income (increase or decrease)

Tax credits are ending and will be replaced by Universal Credit by the end of 2024. Many customers who move from tax credits to Universal Credit could be financially better off and can use an independent benefits calculator to check. If customers choose to apply sooner, it is important to get independent advice beforehand as they will not be able to go back to tax credits or any other benefits that Universal Credit replaces.

HMRC customers in Scotland encouraged to check out financial support available to them

Customers in Scotland are being encouraged to check online for the range of financial support available from HM Revenue and Customs (HMRC) to help with living costs.

HMRC has listed the support available in one place to ensure people are not missing out and can easily find out online if they are eligible and how to claim.

The new GOV.UK page pinpoints people to a one-stop shop of all the benefits, credits and allowances available to individuals and families, making it easier than ever for people to claim what they are entitled to.

This includes:

Child Benefit

Child Benefit can be claimed if someone is responsible for bringing up a child who is:

  • under 16
  • under 20 if they stay in approved education or training

Only one person can get Child Benefit for a child. It’s paid every 4 weeks and there’s no limit to how many children you can claim for.

Tax-Free Childcare

Working parents can get assistance of up to £500 every 3 months (up to £2,000 a year) for each of their children to help with the costs of childcare until the September after their 11th birthday. If a child is disabled, this goes up to £1,000 every 3 months until the September after their 16th birthday (up to £4,000 a year).

Marriage Allowance

Marriage Allowance allows individuals to transfer 10% (£1,260) of their personal tax allowance to a husband, wife or civil partner if they earn less than the personal tax allowance, which is usually £12,570.

Work-related expenses and uniform allowances

Tax relief can be claimed on money spent on things like work uniform and clothing, tools, subscriptions or business travel.

The GOV.UK page also includes guidance for those on a low income wanting to make the most of their savings and help for those struggling to pay their tax bill.

Myrtle Lloyd, Director General Customer Services Group, HMRC: “We understand these are very difficult times for many so it’s vitally important we continue to highlight the range of support available.

“We’d encourage those who think they may be eligible for support to take a look and claim what they’re entitled to – it could make an important difference to household budgets at a time when it’s needed the most.”

Additional online tools and guidance are available to help customers check if they are eligible for each service – as well as extra support to guide them through the application process.

HMRC names avoidance scheme promoters for first time

Tax avoidance schemes have been named for the first time by HM Revenue and Customs (HMRC) as users are warned they could face large tax bills.

HMRC has today advised anyone involved in Absolute Outsourcing’s or Purple Pay Limited’s Equity Participation Scheme to withdraw from them as soon as possible to prevent building up a large tax bill.

This is the first time HMRC has used new powers to name tax avoidance schemes and their promoters as part of a campaign to warn the public not to get caught up in tax avoidance.

Mary Aiston, Director of Counter Avoidance, HMRC, said: “These schemes are cynically marketed as clever ways to pay less tax. The truth is they rarely work in the way the promoters claim and it’s the users that end up with big tax bills.

“New legal powers allow us to name promoters and the schemes they peddle much faster, and this announcement is just the first step. But we need the public to be vigilant, and that’s why we’re also helping people identify, and steer clear, of these schemes through our Tax Avoidance – Don’t Get Caught Out campaign.”

The two named schemes are:

  • Absolute Outsourcing, of Foerster Chambers, Todd Street, Bury, Greater Manchester 
  • Equity Participation Scheme (EPS), promoted by Purple Pay Limited (PPL), of Gracechurch Street, London. 

Both schemes involve individuals agreeing an employment contract and working as a contractor. The schemes pay contractors the National Minimum Wage with the remainder of their wage paid through a loan to try to avoid National Insurance and Income Tax. 

By releasing the details of these schemes, HMRC is letting taxpayers know as early as possible so they can steer clear of them or exit them. HMRC will also regularly update the list by publishing the details of other tax avoidance schemes and their promoters. If a tax avoidance scheme is not shown in the list, this does not mean that the scheme works or is in any way approved by HMRC.

Naming avoidance promoters is one of a number of measures that HMRC is using to help people identify avoidance schemes as a part of the Tax Avoidance – Don’t Get Caught Out campaign. Other tools available to customers to help them steer clear of avoidance schemes include an interactive risk checker and payslip guidance. 

A video highlighting the experience of a critical care nurse who was recommended a tax avoidance scheme through her agency, has also been published by HMRC today. The video explains the risks of becoming involved in a tax avoidance scheme and the warning signs customers should look out for. 

If a customer believes that they are involved in a tax avoidance scheme, they should contact HMRC as quickly as possible by calling 03000 534 226.

Alternatively, if a customer has been encouraged to get into a tax avoidance scheme, has come into contact with someone selling tax avoidance schemes, or has become aware of a scheme, they can report it in confidence through HMRC’s online form. 

This is not a complete list of all tax avoidance schemes currently being marketed or a complete list of all promoters, enablers, and suppliers. There are other schemes, promoters, enablers, and suppliers that remain active, and HMRC will regularly update this list with these details.