Tag: HMRC

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.

HMRC: Time to get ready for Self Assessment

HM Revenue and Customs (HMRC) is reminding Self Assessment customers to check that they have the correct information in order to complete their tax return.

The deadline for 2020/21 tax returns is 31 October 2021 for those completed on paper forms and 31 January 2022 for online returns.

While the end of January is more than three months away, HMRC has already seen thousands of people filing their returns – more than 63,500 customers filed their tax return on 6 April, the first day of the tax year. Customers can file before the January deadline but still have until 31 January to pay.

Any customer who is new to Self Assessment must register via GOV.UK to receive their Unique Taxpayer Reference (UTR). Self-employed individuals must also register for Class 2 National Insurance. 

HMRC is encouraging customers to register early so that they can access guidance and be aware of what they need to do. This includes record keeping, knowing when the filing and payment deadlines are, and the potential for a first tax payment to include a payment on account.

This year, customers will also have to declare if they received any grants or payments from COVID-19 support schemes up to 5 April 2021 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

HMRC recognises that some customers may be worrying about paying their tax bill. Customers can access support to help pay any tax owed, and may be able to set up their own affordable monthly payment plan online by using HMRC’s self-serve Time to Pay facility. Customers should contact HMRC for help if they have concerns about paying their bill.

HMRC’s Myrtle Lloyd, Director General for Customer Services, said: “We want to help people get their tax returns right by making sure they are prepared and have everything they need before they start their Self Assessment.

“If anyone is worried about paying their tax bill, support is available – search ‘time to pay’ on GOV.UK.”

The fastest way to complete a tax return is online via a customer’s Personal Tax Account. They will need their UTR to access their tax return, as well as details of their income or earnings and other financial records.

Detailed information on what documents are needed for Self Assessment are 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. 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: Don’t Get Caught Out!

HMRC urges small motor businesses and car enthusiasts to be aware of post-Brexit changes and prepare themselves ahead of January 2022

HM Revenue and Customs (HMRC) is urging small businesses and enthusiasts in the automotive sector to be aware of post-Brexit rules when sending and receiving parts from Europe or travelling across Europe to attend events, to ensure they don’t get caught out.

New rules have been in place since January this year and while larger VAT-registered businesses will have familiarised themselves with the changes already, smaller businesses such as independent garages and specialist parts retailers may not be fully aware of the changes to import and export rules and how they apply.

Likewise, for motor hobbyists who may want to order a specialist part from the EU to restore a classic car, or wish to travel across Europe to a rally, many would not have had to navigate the changes until recently.

With rallies, classic car exhibitions and festivals in full swing, including the upcoming Classic Motor Show in Birmingham and then, further afield, the Auto e Moto D’Epoca in Italy, enthusiasts are being encouraged to check they understand the new requirements.

HMRC has produced guidance to help people identify the best way to navigate the changes.

There is also an Online Trader Tool  to ensure small businesses don’t get caught out by unexpected charges or unnecessary delays, as well as highlighting processes they can follow.

The guidance also provides information needed to ensure small businesses are prepared ahead of next January when full customs declarations and controls will be introduced.

If small businesses are also moving parts or equipment between Great Britain and Northern Ireland, they can register with the free Trader Support Service.

https://youtu.be/OZ6or0d6Cxk

Katherine Green and Sophie Dean, Directors General, Borders and Trade, HMRC, said: “With the lifting of travel restrictions and more events being held, we want auto enthusiasts to be able to continue to enjoy their cars, motorbikes and campervans like they always have.

“However, we know that many people would not have anticipated that the changes introduced at the beginning of the year would impact them, which is why we urge them to make sure they understand the new obligations by using the guidance available to them – on Gov.UK, from one of our YouTube videos or through our customer forums. Getting used to the new processes now will stand them in good stead ahead of January.”

HMRC: Working Tax Credit customers must report changes to working hours

HM Revenue and Customs (HMRC) is urging Working Tax Credit (WTC) customers to check if they need to update their working hours if these have reduced as a result of coronavirus.

During the pandemic, WTC customers have not needed to tell HMRC about temporary short-term reductions in their working hours as a result of coronavirus – for example if they were working fewer hours or were furloughed. It is one of several measures HMRC introduced to help those facing uncertainty around their hours.

If a WTC customer’s hours temporarily fell because of coronavirus, they have been treated as if they were working their normal hours.

Customers do not need to tell HMRC if they re-establish their normal working hours before 25 November 2021, but from then, they must do within the usual one-month window if they are not back to working their normal hours shown in their WTC claim.

Myrtle Lloyd, HMRC’s Director General for Customer Services, said: “We introduced this measure last year to help support working families. It is vital that Working Tax Credit claimants who have benefitted from it update HMRC with their working hours if they have reduced, and they won’t return to their normal level before 25 November.

“Anyone who is no longer eligible for Working Tax Credit due to a change in their circumstances may be able to apply for other UK Government support, including Universal Credit.”

Customers should continue to tell HMRC about any permanent changes to their circumstances within one month – for example if they are made redundant, lose their job or their hours change permanently during this time.

This will ensure only those who are entitled to tax credits receive them, otherwise those ineligible or due a lower rate of payment will have to pay them back later.

Any changes can be easily reported online on GOV.UK, where customers can also check their current WTC claim details.

If customers receive tax credits they are not entitled to as a result of a change they will need to repay this money and may also have to pay a penalty if they do not let us know within one month. 

HMRC is also reminding claimants that Post Office card accounts are closing. From 30 November 2021 HMRC will stop making payments of Child Benefit, Guardians Allowance and tax credits into Post Office card accounts.

Child Benefit and tax credits customers who use Post Office card accounts to receive their payments will need to notify HMRC of their new bank, building society or credit union account details. HMRC is encouraging customers to act now so they do not miss any payments once their Post Office account closes. They can contact HMRC’s helplines (0345 300 3900 for tax credits or 0300 200 3100 for Child Benefit) or use their Personal Tax Account.

Christmas shoppers warned not to get caught out with extra charges

With just 100 days to go until Christmas (honestly – Ed.!), HMRC is urging shoppers to ensure they don’t get caught out by unexpected charges when buying from overseas traders.

Changes introduced on 1 January this year mean that some UK consumers buying presents for family and friends from EU businesses may now need to pay customs charges when their goods are delivered.

In the same way that consumers have previously had to pay charges when buying certain items from non-EU sellers, the same rules now also apply to goods being bought from the EU.

Shoppers buying stocking fillers or small items don’t need to worry about the changes. Only those buying excise goods – tobacco or alcohol – or ordering luxury items or presents in consignments worth more than £135, before discounts are applied, should be affected.

VAT will still apply on purchases made in consignments worth less than £135 but should be charged by the seller at the point of sale.

But anyone buying a more expensive product from abroad may need to pay import VAT, customs duty and/or excise duty when they receive their order. The amount due will depend on a range of factors, so to avoid surprises consumers should check with their seller to ensure they don’t end up over budget this holiday season.

To help shoppers, HMRC has produced diagrams to explain the various scenarios when buying from the EU. The government has also published easy to follow guidance for consumers to help everyone to understand the changes and when, why and how charges will need to be paid.

Katherine Green and Sophie Dean, Directors General, Borders and Trade, HMRC, said: “With 100 days until Christmas, we want to remind shoppers of the changes introduced since 1 January so that their present buying experience is as smooth as possible, and that online shoppers don’t inadvertently get caught out by any unexpected charges.”

Find out more about the new rules by checking on GOV.UK for a simple guide to the possible charges as well as essential information on how to dispute a charge, return unwanted goods and to get a refund on the charges paid.

Consumers can also find guidance on what may be required when sending or receiving items from friends and family living abroad.

HMRC warns students of scams

University students taking part-time jobs are at increased risk of falling victim to scams, HM Revenue and Customs (HMRC) is warning.

Higher numbers of students going to university this year means more young people may choose to take on part-time work. Being new to interacting with HMRC and unfamiliar with genuine contact from the department could make them vulnerable to scams.

In the past year almost 1 million people reported scams to HMRC.

Nearly half of all tax scams offer fake tax refunds, which HMRC does not offer by SMS or email. The criminals involved are usually trying to steal money or personal information to sell on to others. HMRC is a familiar brand, which scammers abuse to add credibility to their scams.

Links or files in emails or texts can also download dangerous software onto a computer or phone. This can then gather personal data or lock the recipient’s machine until they pay a ransom.

Between April and May this year, 18 to 24-year olds reported more than 5,000 phone scams to HMRC.

Mike Fell, Head of Cyber Security Operations at HMRC, said: “Most students won’t have paid tax before, and so could easily be duped by scam texts, emails or calls either offering a ‘refund’ or demanding unpaid tax.

“Students, who will have had little or no interaction with the tax system might be tricked into clicking on links in such emails or texts.

“Our advice is to be wary if you are contacted out of the blue by someone asking for money or personal information. We see high numbers of fraudsters contacting people claiming to be from HMRC. If in doubt, our advice is – do not reply directly to anything suspicious, but contact HMRC through GOV.UK straight away and search GOV.UK for ‘HMRC scams’.”

In the last year (September 2020 – August 2021) HMRC has: 

·         responded to 998,485referrals of suspicious contact from the public. Nearly 440,730 of these offered bogus tax rebates   

·         worked with the telecoms industry and Ofcom to remove 2,020 phone numbers being used to commit HMRC-related phone scams 

·         responded to 413,527 reports of phone scams in total, an increase of 92% on the previous year. In April last year we received reports of only 425 phone scams. In August 2021 this had risen to 3,269

·         reported 12,705 malicious web pages for takedown

·         detected 463 COVID-19-related financial scams since March 2020, most by text message 

·         asked Internet Service Providers to take down 443 COVID-19-related scam web pages.

By June this year, more than 680,000 students had applied to university, and over 900,000 held part time jobs during the 2020-21 academic year.

  1. HMRC’s advice is:

Stop: 

·         Take a moment to think before parting with your money or information. 

·         Don’t give out private information or reply to text messages, and don’t download attachments or click on links in texts or emails you weren’t expecting.

·         Do not trust caller ID on phones. Numbers can be spoofed.

Challenge: 

·         It’s ok to reject, refuse or ignore any requests – only criminals will try to rush or panic you.

·         Search ‘scams’ on GOV.UK for information on how to recognise genuine HMRC contact  and how to avoid and report scams. 

Protect:

·         Forward suspicious emails claiming to be from HMRC to phishing@hmrc.gov.uk and texts to 60599. Report scam phone calls on GOV.UK. 

·         Contact your bank immediately if you think you’ve fallen victim to a scam, and report it to Action Fraud (in Scotland, contact the police on 101).

  1. Data about student university applications can be found here.
  1. Data on part-time student employment can be found here.
  1. Follow the National Cyber Security Centre’s steps on keeping secure online at CyberAware.gov.uk.
  1. Follow HMRC’s Press Office on Twitter @HMRCpressoffice

Thousands of teenagers missing out on Child Trust Fund cash

HM Revenue and Customs (HMRC) is today urging young people to check if they have a hidden pot of gold – in the shape of a Child Trust Fund (CTF).  

It is now one year since the first account holders started turning 18 and around 55,000 CTFs mature every month. This means their owners can withdraw funds or transfer savings into an adult ISA. Hundreds of thousands of accounts have been claimed so far, but many have not. 

CTFs were set up for all children born between 1 September 2002 and 2 January 2011 with a live Child Benefit claim. 

Parents or guardians set up these accounts with Child Trust Fund Providers – usually banks, building societies or investment managers – using vouchers provided by the government. If an account was not opened by the child’s parent, HMRC set one up on the child’s behalf. 

Between 2002 and early 2011, about six million CTFs were opened by parents or guardians, with a further million set up by HMRC. 

Economic Secretary to the Treasury, John Glen, said: “It’s fantastic that so many young people have been able to access the money saved for them in Child Trust Funds but we want to make sure that nobody misses out on the chance to invest in their future. 

“If you’re unsure if you have an account or where it may be, it’s easy to get help from HMRC to track down your provider online.” 

Some young people may not know they have a CTF – or some parents or guardians may have forgotten who they set the account up with. To help them find their accounts, HMRC created a simple online tool.  

Any young people unsure about whether or not they have a CTF should first ask a parent or guardian if they remember setting one up. Once they know who their provider is, they should contact them directly – and either request to withdraw the money or transfer the funds into an adult ISA or other savings account. 

For those who cannot access the tool, HMRC will provide alternative, non-digital routes to finding a CTF provider upon request. HMRC will send details of the provider by post within three weeks of receiving their request.  

The accounts were set up to encourage positive financial habits and a saving culture among the young account holders. HMRC is working with the Money and Pension Service (MaPS) and the CTF providers to continue to provide financial education to the beneficiariescation to the beneficiaries.   

At 16 years, a child can choose to operate their CTF account or have their parent or guardian continue to look after it, but they cannot withdraw the funds. At 18 years of age, the CTF account matures and the child is able to withdraw money from the fund or move it to a different savings account.

HMRC can help with childcare costs in Scotland as children head back to school

Families in Scotland may be eligible for Tax-Free Childcare to help pay for breakfast and after school clubs as children go back to school.

Families are eligible to save money on their childcare and benefit from a government top-up worth up to £2,000 every year, or up to £4,000 a year if a child is disabled. In June 2021, about 17,530 families in Scotland benefited from using Tax-Free Childcare, but thousands are missing out on this opportunity.

Tax-Free Childcare is available to eligible parents or carers who have children aged up to 11, or 17 if their child is disabled. For every £8 a parent or carer deposits into their account, they will receive a £2 top-up, up to the value of £500 every three months, or £1,000 if their child is disabled. Parents and carers can check their eligibility and register for Tax-Free Childcare via GOV.UK.

HMRC recognises that families’ personal circumstances have changed since March 2020 as more parents and carers are preparing to return to their workplaces. The 20% top-up is paid into the child’s Tax-Free Childcare account and is ready to use almost instantly, meaning parents and carers can use the money towards the cost of childminders, breakfast and after school clubs, and approved play schemes.

Myrtle Lloyd, HMRC’s Director General for Customer Services, said: “As your children head back to school this autumn, don’t miss out on the opportunity to receive your 20% top-up to help pay for their childcare.

“It is quick and easy to sign-up, just search ‘tax-free childcare’ on GOV.UK.”

Tax-Free Childcare is also available for pre-school aged children attending nurseries, childminders or other accredited childcare providers. Parents and carers, who are returning to work after parental leave, can apply for a Tax-Free Childcare account for that child before they need to start using it. Families can start depositing money 31 days before they return to work, maximising the potential government top-up saving.

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