Tag: HMRC

Scam HMRC phone call reports drop by 97%

Reports of scam HMRC phone calls have fallen by 97% over the last 12 months, latest HM Revenue and Customs (HMRC) figures show, which display a downward trend in reports overall throughout the past year.

Reports of scammers impersonating HMRC in phone calls peaked at 79,477 in March 2021 and fell to just 2,491 in December 2021.

The fall in scam call reports to HMRC has also been seen elsewhere with an 92% drop in phishing email reports and a 97% drop in scam text reports over the last year.

These significant results are testament to some of the work of teams across HMRC in tackling these attempts to defraud people, including dedicated customer protection teams and helplines, tools to refer scams, and use of innovative technologies. It also signals that the public is more aware of cyber criminals and the methods they use to trick people, in part thanks to HMRC’s awareness raising efforts, meaning fewer members of the public have been the subject of scammers and attempts to steal their money.

All of HMRC’s work to protect the public and make people aware of scams and the advice available on GOV.UK, has helped move HMRC from third most phished brand globally to outside the top 100.

Mike Fell, HMRC’s Head of Cyber Security Operations, said: “We work incredibly hard to protect the public from these criminals who ruin lives by stealing from people. It’s great news that fewer people are receiving and reporting these attempted frauds, but it is still important they continue to report suspicious contact to us. We will continue to do everything we can to protect the public from these cynical attempts to impersonate HMRC to steal from people.

“Our advice is – never let yourself be rushed. If someone contacts you saying they are from HMRC, wanting you to urgently transfer money or give personal information, be on your guard. HMRC will never ring up threatening arrest, only criminals do that. Contacts like these should set alarm bells ringing, so take your time and check HMRC scams advice on GOV.UK.”

Some HMRC-themed scams originate abroad. HMRC works closely with national and international law enforcement agencies to combat scams, including collaboration with India as a key international partner in tackling the organised crime groups that run these scams.

Work by the Indian authorities last year resulted in multiple arrests and the closure of criminal call centre operations. In June 2021, 51 people were arrested at two call centres in Delhi, India, that were dedicated to facilitating HMRC scams.

HMRC has a dedicated Customer Protection team working on cyber and phone crime around the clock, closing down scams and sharing intelligence with law enforcement agencies. HMRC also deploys innovative technologies to prevent misleading and malicious communications that impersonate its genuine e-mail channels, from ever reaching the public. Since 2017 these technical controls have allowed HMRC to prevent 500 million bogus emails reaching customers.

 More recently, new controls have prevented 90% of the most convincing text messages from reaching the public and joint working with industry partners has prevented the spoofing of most of HMRC’s helpline numbers.

In the last year, HMRC has responded to 670,793 referrals of suspicious contact from the public, with 283,157 of these cases offering bogus tax rebates. Others threaten arrest for tax evasion or offer fake financial support.

As part of HMRC’s action to combat voice scams, the department has set up a direct referral route on GOV.UK where people can report HMRC-related telephone phishing.

HMRC also works with the telecoms industry to remove phone numbers being used to commit HMRC-related phone scams. In December 2021, four phone numbers being used to commit HMRC-related phone scams were removed, which is likely to have prevented hundreds of scam calls being made.

HMRC uses a range of modern methods when communicating with its customers. Criminals will often then try to duplicate those methods to take advantage of people. HMRC is doing everything it can to stay one step ahead of the criminals to keep its customers and their information safe.

Search ‘scams’ on GOV.UK for information on how to recognise genuine HMRC contact and how to avoid scams. Forward suspicious texts claiming to be from HMRC to 60599 and emails to phishing@hmrc.gov.uk. Report tax scam phone calls on GOV.UK.

HMRC: Self Assessment taxpayers given more time to ease COVID-19 pressures

HM Revenue and Customs (HMRC) is waiving late filing and late payment penalties for Self Assessment taxpayers for one month – giving them extra time, if they need it, to complete their 2020/21 tax return and pay any tax due.

HMRC is encouraging taxpayers to file and pay on time if they can, as the department reveals that, of the 12.2 million taxpayers who need to submit their tax return by 31 January 2022, almost 6.5 million have already done so.

HMRC recognises the pressure faced this year by Self Assessment taxpayers and their agents. COVID-19 is affecting the capacity of some agents and taxpayers to meet their obligations in time for the 31 January deadline. The penalty waivers give taxpayers who need it more time to complete and file their return online and pay the tax due without worrying about receiving a penalty.

The deadline to file and pay remains 31 January 2022. The penalty waivers will mean that:

·         anyone who cannot file their return by the 31 January deadline will not receive a late filing penalty if they file online by 28 February, and

·         anyone who cannot pay their Self Assessment tax by the 31 January deadline will not receive a late payment penalty if they pay their tax in full, or set up a Time to Pay arrangement, by 1 April.

Interest will be payable from 1 February, as usual, so it is still better to pay on time if possible.

Angela MacDonald, HMRC’s Deputy Chief Executive and Second Permanent Secretary, said: “We know the pressures individuals and businesses are again facing this year, due to the impacts of COVID-19.

“Our decision to waive penalties for one month for Self Assessment taxpayers will give them extra time to meet their obligations without worrying about receiving a penalty.”

Lucy Frazer, Financial Secretary to the Treasury, said: “We recognise that Omicron is putting people under pressure, so we are giving millions of people more breathing space to manage their tax affairs. 

“Waiving late filing and payment penalties will help ease financial burdens and protect livelihoods as we navigate the months ahead.” 

The existing Time to Pay service allows any individual or business who needs it the option to spread their tax payments over time. Self Assessment taxpayers with up to £30,000 of tax debt can do this online once they have filed their return.     

The 2020/21 tax return covers earnings and payments during the pandemic. Taxpayers will need to declare if they received any grants or payments from the COVID-19 support schemes up to 5 April 2021 on their Self Assessment, as these are taxable, including:

  • Self-Employment Income Support Scheme (SEISS)
  • Coronavirus Job Retention Scheme (CJRS)
  • Other COVID-19 grants and support payments such as self-isolation payments, local authority grants and those for the Eat Out to Help Out scheme

The £500 one-off payment for working households receiving tax credits should not be reported in Self Assessment.

HMRC urges everyone to be alert if they are contacted out of the blue by someone asking for money or personal information.

Taxpayers should always type in the full online address www.gov.uk/hmrc to get the correct link for filing their Self Assessment return online securely and free of charge. HMRC sees high numbers of fraudsters emailing, calling or texting people claiming to be from the department.

If in doubt, HMRC advises not to reply directly to anything suspicious, but to contact them straight away and to search GOV.UK for ‘HMRC scams’.

HMRC fraud squad takes back £1 BILLION from offenders

More than £1 billion has been recovered from the proceeds of crime and tax offenders since the formation of a specialist HM Revenue and Customs (HMRC) fraud squad five years ago.

Launched in April 2016, the department’s Fraud Investigation Service (FIS) has now recovered assets equivalent to funding around 20,000 NHS nurses for an entire year.

FIS has been proactively pursuing the suspected proceeds of crime using enforcement powers, both criminal and civil, to disrupt the movement of cash and assets. Since 2016, more than 1,200 seizures of cash and assets have been made while on operational duty, including gold bars worth £750,000 from a passenger at Manchester Airport and £48,000 found in a freezer drawer, hidden among chicken nuggets at a house in Blackpool.

Simon York, Director, Fraud Investigation Service, HMRC, said: “To reach this £1 billion milestone in five years speaks volumes to the dedication, hard work and skill of FIS to recover the proceeds of crime from those who try to cheat the system.

“Whether it’s cash seizures, confiscation orders or account freezing orders, recovering these assets stops criminals bankrolling their lavish lifestyles and funding further crimes that harm our communities, such as drugs, guns and human trafficking. Crucially, this money goes back into the public purse, helping fund our vital services such as schools and hospitals.

“HMRC deploys cutting-edge technology to investigate unexplained wealth and uncover hidden assets. Last year alone, we recouped more than £218 million from proceeds of crime.

“We are committed to recovering criminal assets and today the message is clear – crime doesn’t pay.”

Some of the bigger and varied seizures and confiscations include:

·              £750,000 of gold bars seized from a lunchbox at Manchester Airport, which were auctioned off with proceeds going back into the public purse.

·              A £1.7 million confiscation order imposed on a payroll fraudster who had to stump up the cash or face having four years added to his nine-and-a-half year sentence.

·              Gold jewellery and £180,000 cash seized from a safety deposit box in Birmingham as part of a £194,280 tax fraud.

·              More than £840,000 in cash was seized at a residential garage in Sydenham, south-east London, after FIS helped dismantle a gang responsible for a £9.5 million tobacco fraud.

·              £48,000 found in a freezer drawer, hidden among chicken nuggets at a house in Blackpool, as part of a £16m tobacco fraud.

·              A convicted fraudster was ordered to hand over poker winnings twice in 2018 and 2019 totalling £99,030 to satisfy an outstanding confiscation order.

The formation of FIS in 2016 brought together HMRC’s criminal and civil investigators – a world-first for tax enforcement. This partnership allows HMRC’s investigators to unlock the most complex financial crimes.

Criminal cash is seized by HMRC officers under the Proceeds of Crime Act 2002 (POCA). If the courts are satisfied the cash is from a crime, or was going to be used in a crime, they can order a forfeiture. In uncontested cases, HMRC can administratively order forfeiture of the cash.

HMRC also obtains Account Freezing Orders to freeze balances in bank accounts where it is suspected they contain criminal money. A financial investigator uses a range of tools at their disposal to investigate the cash or account and any criminality. This may involve interviewing the suspect, obtaining production orders on identified bank accounts and assessing whether the cash was seized alongside illegal items such as non-duty paid alcohol or tobacco. Uncontested cases can be administratively dealt with by HMRC, while others would be determined in a court.

Confiscation Orders can be imposed on tax fraudsters after conviction. Investigators will assess the criminal benefit from their crimes and evaluate any assets they hold.  If the assets held by the convicted criminal at the time of the order are less than the benefit derived from the fraud, then any future assets can be confiscated up to the value of the benefit of the fraud.

The courts make the final decision on a Confiscation Order. Failure to pay leads to default sentences and many more months or years in jail and they will still owe the money when released. The recovered money is returned to the public purse.

The Contractual Disclosure Facility (CDF) is another tool for FIS to deal with serious fraud cases. The CDF allows tax evaders to admit their fraud and agree to pay the tax in full, along with interest and penalties due.

However, if FIS discover that individuals have not made a full and frank disclosure via the CDF, they can and do criminally investigate and prosecute.

2,828 ’elf Assessments filed on Christmas Day!

HM Revenue and Customs (HMRC) has revealed that 2,828 customers filed their Self Assessment tax return on Christmas Day, compared to 2,700 in 2020.

For thousands of customers, filing their tax return on 25 December has become part of their Christmas tradition, with 227 choosing to complete their Self Assessment between 12:00 and 12:59.

In total, more than 31,000 customers submitted their 2020/21 tax return between Christmas Eve and Boxing Day – getting it in early ahead of the deadline on 31 January 2022, and most festive filers completed their return on 24 December:

·         Christmas Eve: 19,802 tax returns were filed. The peak time for filing was 11:00 to 11:59 when 2,914 returns were received

·         Christmas Day: 2,828 tax returns were filed. The peak time for filing was 12:00 to 12:59 when 227 returns were received

·         Boxing Day: 8,641 tax returns were filed. The peak time for filing 12:00 to 12:59 when 821 returns were received

Myrtle Lloyd, HMRC’s Director General for Customer Services, said: “Filling in a tax return won’t have been on many people’s to-do lists for Christmas, but please don’t leave it until the end of January either.

“We have videos, guidance and helpsheets to support you – just search ‘Self Assessment’ on GOV.UK to find out more.”

HMRC has created resources to help customers complete their tax return including a playlist on YouTube, webinars and helpsheets and guidance available on GOV.UK.

Some Self Assessment customers may feel worried or anxious about paying any tax owed by the deadline. If they cannot pay in full, customers can set up their own Time to Pay arrangement online if they:

  • have filed their 2020/21 tax return
  • owe less than £30,000
  • are within 60 days of the payment deadline
  • plan to pay their debt off within the next 12 months or less

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

HMRC urges everyone to be alert if they are contacted out of the blue by someone asking for money or personal information.

Customers should always type in the full online address www.gov.uk/hmrc to get the correct link for filing their Self Assessment return online securely and free of charge. HMRC sees high numbers of fraudsters emailing, calling or texting people claiming to be from the department. If in doubt, HMRC advises not to reply directly to anything suspicious, but to contact them straight away and to search GOV.UK for ‘HMRC scams’.

HMRC: Self Assessment customers use monthly payment plans to pay £46 million in tax

More than 20,000 Self Assessment customers have used HM Revenue and Customs (HMRC) online monthly payment plan service since April to spread the cost of their tax bill, totalling £46 million so far, it has been revealed.

Where customers are struggling to pay their bill in full, the self-serve Time to Pay service allows Self Assessment customers to manage how they pay their tax liabilities. Customers can use the online service for tax bills worth up to £30,000 without the need to talk to HMRC. The service will create a bespoke monthly payment plan for the customer based on how much tax is owed and the length of time needed to pay.

Last year, 123,000 customers used self-serve Time to Pay to spread the cost of their 2019/20 tax bill, worth £460 million.

Customers have until 31 January 2022 to complete their 2020/21 tax return and pay their bill.

If they can’t pay in full, customers can set up their own Time to Pay arrangement online if they:

  • have filed their 2020/21 tax return
  • owe less than £30,000
  • are within 60 days of the payment deadline
  • plan to pay their debt off within the next 12 months or less

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

Myrtle Lloyd, HMRC’s Director General for Customer Services, said: “We understand some customers might be worrying about paying their Self Assessment bill this year, and we want to support them.

“To see if you’re eligible to set up a payment plan, go to GOV.UK and search ‘pay my Self Assessment’.”

Self-serve Time to Pay is just one way customers can pay their Self Assessment tax bill, a full list of alternative payment methods is available on GOV.UK.

HMRC urges everyone to be alert if they are contacted out of the blue by someone asking for money or personal information.

Customers should always type in the full online address www.gov.uk/hmrc to get the correct link for filing their Self Assessment return online securely and free of charge.

HMRC sees high numbers of fraudsters emailing, calling or texting people claiming to be from the department. If in doubt, HMRC advises not to reply directly to anything suspicious, but to contact them straight away and to search GOV.UK for ‘HMRC scams’.

HMRC: Be aware of post-Brexit changes before key Christmas shopping dates

As Black Friday and Cyber Monday approach, HM Revenue and Customs (HMRC) is urging online shoppers in Scotland to avoid being hit with unexpected customs charges.

Changes introduced on 1 January 2021 means that consumers who previously had to pay charges when buying certain items from non-EU sellers may now also need to do the same when buying goods from the EU.

Katherine Green and Sophie Dean, Directors General, Borders and Trade, HMRC, said: “With Christmas rapidly approaching, we don’t want shoppers to be caught out by unexpected charges which will take the fun out of their shopping experience.

“There are now a number of factors that people will need to consider when purchasing goods from the EU, so shoppers are being advised to check guidance to ensure they know what they will owe.”

HMRC recommends people look at the seven top tips below to determine whether there will be charges on their goods.

If there are charges to pay, shoppers may also need to pay a “handling fee” to the courier company before their goods are released.

  1.   Be aware of where you, the recipient, are based.
  • Shoppers based in Northern Ireland won’t be affected by these changes due to the Northern Ireland Protocol, however those in Great Britain should be prepared for potential changes.

2.    Check whether your order contains excise goods, such as tobacco, alcohol or perfume.

  • Unlike other items, there is no lower threshold for customs charges when it comes to excise goods, so there will be charges due no matter the value or origin of your goods.
  • Shoppers buying excise goods will need to pay import VAT and excise duty. They may also need to pay customs duty (see tip 7 for more info).
  1. Check whether your order is worth more than £135, before extra costs, such as shipping and insurance are applied.
  • Shoppers buying stocking fillers or small value items, not including excise goods, don’t need to worry as goods sent in consignments worth less than £135 should not attract additional charges, as UK VAT is collected by the seller on behalf of HMRC at the point of sale. This also applies to goods being purchased from non-EU countries.
  • Anyone buying a more expensive product from abroad – over £135 – will now need to pay import VAT and may need to pay customs duty. The amount due will depend on a range of factors, including shipping and insurance costs so, to avoid surprises, consumers should consult their seller. 
  • Shoppers who already know they will need to pay import VAT should make sure their seller does not charge them VAT, otherwise they may be charged twice (see tip 5 for more info).
  1. Be mindful of new charges when sending or receiving gifts from an individual based overseas.
  • If you’re lucky enough to receive a gift from someone based in the EU and it is valued at less than £39 and it does not contain excise goods, it will be exempt from import VAT and customs duty. Above the £39 threshold, import VAT will be due and once the value of the gift reaches £135, customs duty will also be payable. You could also get charged a “handling fee” (see tip 5 for more info).
  • If you are planning on sending a gift to someone based overseas, you should check guidance published by the relevant customs authority to check their specific rules and charges.

5.    Be aware of how and when you could be notified of charges.

  • Anyone needing to pay customs charges will be contacted by the courier company and asked to pay the charges before they can receive their goods. Alternatively, the seller may arrange to pay any charges upfront on your behalf, but you should check with the seller to avoid any unwelcome surprises.

6.    Check the guidance available to you.

  • To help shoppers navigate these changes, HMRC has produced diagrams outlining three fictional scenarios about buying goods from the EU and has published a simple guide on GOV.UK, which also contains essential information on how to dispute a charge, return unwanted goods and to get a refund on the charges paid.

7.    Check with the seller whether the goods originated in the EU and whether they qualify for a “zero tariff”.

  • Customs duty won’t be due on goods if they meet criteria set out in the EU-UK Trade and Cooperation Agreement and a “zero tariff” can be correctly applied.
  • The “Rules of Origin” requirements mean that even if your parcel is valued above £135, if the goods you are buying originate in – or have been sufficiently worked or processed within – the EU, the seller confirms this and the zero tariff is claimed on the customs declaration, you will not need to pay any customs duties although import VAT will still be due.
  • If customs duty is due, the rate – or the Tariff – for each item can be found within the trade tariff tool but it’s recommended you check with your seller to find out exactly what you will owe.

For more information on the changes as well as finding crucial information about how to return goods and get a refund on charges go to GOV.UK

HMRC warns customers about Self Assessment tricksters

As HM Revenue and Customs (HMRC) prepares to issue emails and SMS to Self Assessment customers, the department is reminding them to be on their guard after nearly 800,000 tax-related scams were reported in the last year.

Fraudsters use Self Assessment to try and steal money or personal information from unsuspecting individuals. In the last year alone, HMRC has received nearly 360,000 bogus tax rebate referrals.

The Self Assessment deadline is 31 January 2022 and customers may expect to hear from HMRC at this time of year. More than 4 million emails and SMS will be issued this week to Self Assessment customers pointing them to guidance and support, prompting them to think about how they intend to pay their tax bill, and to seek support if they are unable to pay in full by 31 January.

However, the department is also warning customers to not be taken in by malicious emails, phone calls or texts, thinking that these are genuine HMRC communications referring to their Self Assessment tax return.

Myrtle Lloyd, HMRC’s Director General for Customer Services, said: “Never let yourself be rushed. If someone contacts you saying they’re from HMRC, wanting you to urgently transfer money or give personal information, be on your guard.

“HMRC will also never ring up threatening arrest. Only criminals do that.

“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, so if you are in any doubt whether the email, phone call or text is genuine, you can check the ‘HMRC scams’ advice on GOV.UK and find out how to report them to us.”

Criminals use emails, phone calls and text messages to try and dupe individuals, and often mimic government messages to make them appear authentic. They want to trick their victims into handing over money or personal or financial information.

Customers can report suspicious phone calls using a form on GOV.UK; customers can also forward suspicious emails claiming to be from HMRC to phishing@hmrc.gov.uk and texts to 60599.

HMRC has a dedicated team working on cyber and phone crimes. They use innovative technologies to prevent misleading and malicious communications from ever reaching the customer.

Since 2017 these technical controls have prevented 500 million emails from reaching HMRC’s customers. More recently, new controls have prevented 90% of the most convincing SMS messages from reaching the public and controls have been applied to prevent spoofing of most HMRC helpline numbers.  

HMRC is also reminding Self Assessment customers to double check websites and online forms before using them to complete their 2020/21 tax return.

People can be taken in by misleading websites designed to make them pay for help in submitting tax returns or charging to connect them to HMRC phone lines.

Customers who are in any doubt about whether a website is genuine should visit GOV.UK for more information about Self Assessment and use the free signposted tax return forms.

HMRC: Self-Assessment tax return

More than 10.7 million customers completed their 2019/20 tax return by 31 January 2021 and 795,300 were from Scotland, HM Revenue and Customs (HMRC) has revealed.

The deadline to complete the 2020/21 Self Assessment tax return is 31 January 2022. Customers can complete it at any time up to the deadline but HMRC is encouraging them to complete it early to allow for more time to pay their tax bill or set up a payment plan.

Customers must complete a Self Assessment return if they:

  • earned more than £2,500 from renting out property
  • received, or their partner has received, Child Benefit and either of them had an annual income of more than £50,000
  • received more than £2,500 in other untaxed income, for example from tips or commission
  • are a self-employed sole trader whose annual turnover is more than £1,000
  • are an employee claiming expenses in excess of £2,500
  • have an annual income of more than £100,000
  • have earned income from abroad that they need to pay tax on

The 2020/21 tax return covers earnings and payments during the pandemic. Customers will need to declare if they received any grants or payments from the COVID-19 support schemes up to 5 April 2021 on their Self Assessment, as these are taxable, including:

  • Self-Employment Income Support Scheme
  • Coronavirus Job Retention Scheme
  • other COVID-19 grants and support payments such as self-isolation payments, local authority grants and those for the Eat Out to Help Out scheme

The £500 one-off payment for working households receiving tax credits should not be reported in Self Assessment.

Myrtle Lloyd, HMRC’s Director General for Customer Services, said: “Customers can beat the rush and send us their tax returns now. They have until the 31 January deadline to pay, which means they have longer to set up a monthly payment plan if they need one.

“Visit GOV.UK and search ‘self assessment’ to find out more.”

Even if customers submit their completed tax return now, they do not have to pay any tax owed until 31 January 2022.

HMRC recognises that some customers may be worrying about paying their tax bill. Customers can access support to help pay any tax owed on GOV.UK.

Various payment options include:

  • paying through a customers’ tax code (PAYE customers only)
  • Payment on Account
  • setting up an online monthly payment plan (self-serve Time to Pay)
  • pay by debit or corporate credit card
  • pay at a bank or building society

Visit GOV.UK for a full list of payment options and the eligibility criteria. Customers should contact HMRC if they have concerns about paying their tax bill.

HMRC urges everyone to be alert if they are contacted out of the blue by someone asking for money or personal information.

Customers should always type in the full online address www.gov.uk/hmrc to get the correct link for filing their Self Assessment return online securely and free of charge.

HMRC sees high numbers of fraudsters emailing, calling or texting people claiming to be from the department.

If in doubt, HMRC advises not to reply directly to anything suspicious, but to contact them straight away and to search GOV.UK for ‘HMRC scams’.

Below is a breakdown of the estimated number of Self Assessment returns received from customers for 2019/20 filers in Scotland’s local authority areas:

Aberdeen City                       34,300
Aberdeenshire                       54,800
Angus                       18,000
Argyll and Bute                       17,400
Scottish Borders                       23,300
Clackmannanshire                         5,800
West Dunbartonshire                         7,600
Dumfries and Galloway                       26,000
Dundee City                       15,100
East Ayrshire                       14,300
East Dunbartonshire                       18,900
East Lothian                       18,500
East Renfrewshire                       17,500
City of Edinburgh                       97,600
Falkirk                       18,300
Fife                       47,900
Glasgow City                       68,000
Highland                       45,900
Inverclyde                         7,900
Midlothian                       12,700
Moray                       15,200
North Ayrshire                       15,200
North Lanarkshire                       34,300
Orkney Islands                         5,600
Perth and Kinross                       29,800
Renfrewshire                       19,500
Shetland Islands                         4,400
South Ayrshire                       16,500
South Lanarkshire                       42,000
Stirling                       17,200
West Lothian                       21,300
Na h-Eileanan Siar                         4,500
TOTAL                             795,300

Time is running out for customers with Post Office card accounts

Around 24,000 HM Revenue and Customs (HMRC) customers with a Post Office card account have just three weeks left to update the department with new payment details before the 30 November deadline, or risk having payments paused.

From 1 December 2021, HMRC will stop making tax credits, Child Benefit and Guardian’s Allowance payments to Post Office card accounts. HMRC is urging account holders to contact them to update their bank account details to continue receiving payments without disruption.

Customers can choose to receive their benefits and credits payments to a bank, building society or credit union account. If they already have an alternative account, they can contact HMRC now to update their details.

Child Benefit and Guardian’s Allowance customers can use their Personal Tax Account to provide revised account details, change their bank account details via GOV.UK or by contacting the Child Benefit helpline on 0300 200 3100.

Tax credits customers can change their bank account details by contacting the tax credits helpline on 0345 300 3900. If customers cannot open a bank account, they should contact HMRC.

Myrtle Lloyd, HMRC’s Director General for Customer Services, said: “Time is running out for customers who have been using a Post Office card account to get payments from us. They need to give us their new account details now to avoid their payments being suspended.

“They can update their details online or by calling us, and they need to be very careful to avoid handing over personal details to fraudsters contacting them claiming to be from HMRC.”

If a customer misses the 30 November deadline, their payments will be paused until the customer notifies HMRC of their new account details.

The Money Advice and Pensions Service offers information and advice about how to choose the right current account and how to open an account.

HMRC has been contacting customers recently to urge them to take action.

HMRC urges everyone to be alert if they are contacted out of the blue by someone asking for money or personal information. Customers should always type in the full online address www.gov.uk/hmrc to access the correct HMRC contact information.

HMRC sees high numbers of fraudsters emailing, calling or texting people claiming to be from the department.

If in doubt, HMRC advises not to reply directly to anything suspicious, but to contact them straight away and to search GOV.UK for ‘HMRC scams’.

Selling online? Here’s what you need to know about taxes

With online shopping becoming more and more popular, e-commerce and online business start ups are growing at a rapid rate. In fact, according to the Business Data Group, the UK’s e-commerce start-up sector is booming at levels not seen before.

Its research showed that in the week before the UK’s COVID-19 lockdown was announced, more than 500 e-commerce start-ups were formed. Five weeks later, that figure had risen exponentially to almost 1,300 e-commerce start-ups per week – around 800 more than the same week in 2019.

If you own an e-commerce business, or you’re thinking about starting one, then there are special rules and regulations for operating. Here, Zoe Gibbons (above), partner and e-commerce specialist at Perrys Chartered Accountants, explains what you need to know about selling online:

Do online sellers have to pay tax?

Setting up as an online business is a great way to keep overheads to a minimum and benefit from flexible working arrangements. However, like any other business, an e-commerce business will be subject to paying taxes.

If you are self-employed, including as an online seller, then you’ll need to complete an annual self-assessment tax return to disclose any income and expenditure and submit it online to HM Revenue & Customs (HMRC).

However, there are some exceptions. For example, if you are selling items online and it is not part of a business activity, such as selling second-hand possessions on eBay, then you won’t need to pay tax. However, if you plan to do it regularly, this could count as a business even if you already have a job.

As of 2016, the Finance Act gave HMRC the authority to investigate selling sites of individuals who do not appear to be declaring income. This is assessed based on the following criteria:

  • Intention to make a profit as opposed to selling for fun or to raise emergency funds
  • Repetition of similar transactions over a short period of time
  • Borrowing money to fund transactions
  • Inability to prove items sold were pre-loved or used before being listed
  • Items sold at a fixed price in a similar way to other retailers
  • Limited time between purchase and selling of items
  • Modification of items in order to sell them for profit

How much can you sell online before paying tax?

If you’re hoping to make a small amount of money from selling online, then the good news is HMRC currently allows for £1,000 to be earned in sales before any tax is payable.

However, even if you’re selling online on platforms such as eBay, Depop and Gumtree, and you’re not a registered business, once you pass the £1,000 earnings threshold you may be liable for tax as a self-employed individual.

What taxes do online businesses need to pay?

Depending on how your business is set up, the following taxes may apply:

  • Income Tax
  • Corporation Tax
  • National Insurance
  • VAT
  • Employers’ PAYE
  • Business rates

It is recommended that you seek the advice of a professional accountant for any e-commerce business tax related matters.

Is there an online sales tax?

In March 2020, HMRC introduced the Digital Services Tax – a 2% tax on the revenues of search engines, social media services and online marketplaces, which derive value from UK users. The majority of businesses affected by this tax are large multi-national enterprises, such as Amazon, Facebook and Google.

However, the UK Treasury is also investigating the options for introducing an online sales tax in response to the recent shift in shopping patterns and online consumer behaviour. Currently, it is considering a 2% online sales tax on e-commerce sellers and marketplaces.

This could mean that e-commerce businesses will need to pay 2% of tax on their online sales to UK customers.

Do you pay taxes when selling online to other countries?

If you sell goods online to customers who are overseas, then other considerations will apply. For example, your goods may require accompanying documentation and could be subject to customs duty and sales tax on arrival at their destination.

If you are in any doubt, then you should seek the assistance of a qualified accountant who has experience dealing with e-commerce businesses.