Tag: HMRC

Crack your Easter childcare costs with tax-free top ups 

With the Easter school holidays nearly here, HM Revenue and Customs (HMRC) is reminding families in Scotland not to miss out on UK Government help to pay for childcare. 

Tax-Free Childcare can pay for any approved childcare for children aged 11 or under, or 16 if the child has a disability. More than 26,000 families in Scotland used the scheme in December 2022.

Working families, where each parent or carer earns up to £100,000 can use it, meaning for every £8 paid into an online account they will receive an additional £2 from the government. This means parents and carers can receive up to £500 every 3 months (£2,000 a year for each child), or £1,000 (£4,000 a year for each child) if their child is disabled.  

Whether children go to nursery, a childminder, attend breakfast, after school or holiday clubs, as well as out of school activities, Tax-Free Childcare could be used.

Opening a Tax-Free Childcare account is quick and easy and can be done at any time of the year. Families who have not yet signed up should check their eligibility and apply online today.

Victoria Atkins, Financial Secretary to The Treasury, said:  “Tax-Free Childcare provides extra help with childcare costs which could make all the difference to working families and make childcare expenses more manageable.

“I would urge families to go online today to find out how it can help you.”  

Myrtle Lloyd, HMRC’s Director General for Customer Services, said:  “Childcare is so important for working families, especially during school holiday time. Tax-Free Childcare provides financial support when it’s needed the most.

“Search ‘Tax-Free Childcare’ on GOV.UK to find out how it could help you.”  

A Tax-Free Childcare account can be opened online in just 20 minutes. Money can be deposited at any time to be used straight away, or whenever it is needed.

Unused money in the account can be withdrawn at any time. Go to GOV.UK to register and get started.  

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 can receive support until 1 September after their 16th birthday  

·         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.  

The UK 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.  

UK Government extends voluntary National Insurance deadline

The UK Government has extended the voluntary National Insurance deadline to 31 July 2023 to give taxpayers more time to fill gaps in their National Insurance record and help increase the amount they receive in State Pension.

This comes after members of the public voiced concern over the previous deadline of 5 April 2023.

The deadline extension was announced in a Written Ministerial Statement last week (7th March) and HM Revenue and Customs (HMRC) is urging taxpayers to ensure they don’t miss out.

Anyone with gaps in their National Insurance record from April 2006 onwards now has more time to decide whether to fill the gaps to boost their new State Pension. Any payments made will be at the lower 2022 to 2023 tax year rates.

As part of transitional arrangements to the new State Pension, taxpayers have been able to make voluntary contributions to any incomplete years in their National Insurance record between April 2006 and April 2016, to help increase the amount they receive when they retire. And after an increase in customer contact, the UK Government has extended the deadline l.to ensure people have time to make their contributions.

Victoria Atkins, The Financial Secretary to the Treasury, said: “We’ve listened to concerned members of the public and have acted.

“We recognise how important State Pensions are for retired individuals, which is why we are giving people more time to fill any gaps in their National Insurance record to help bolster their entitlement.”

Thousands of taxpayers with incomplete years in their National Insurance record could be financially better off in their retirement if they make voluntary payments to top up any incomplete or missing years.

Eligible taxpayers can find out how to check their National Insurance record, obtain a State Pension forecast, decide if making a voluntary National Insurance contribution is worthwhile for them and their pension, and how to make a payment on GOV.UK.

Taxpayers can check their National Insurance record, via the HMRC app or their Personal Tax Account.

HMRC: Taxpayers given more time for voluntary National Insurance contributions

The UK Government has extended the voluntary National Insurance deadline to 31 July 2023 to give taxpayers more time to fill gaps in their National Insurance record and help increase the amount they receive in State Pension.

This comes after members of the public voiced concern over the previous deadline of 5 April 2023.

The deadline extension was announced in a Written Ministerial Statement last week (7th March) and HM Revenue and Customs (HMRC) is urging taxpayers to ensure they don’t miss out.

Anyone with gaps in their National Insurance record from April 2006 onwards now has more time to decide whether to fill the gaps to boost their new State Pension. Any payments made will be at the lower 2022 to 2023 tax year rates.

As part of transitional arrangements to the new State Pension, taxpayers have been able to make voluntary contributions to any incomplete years in their National Insurance record between April 2006 and April 2016, to help increase the amount they receive when they retire. And after an increase in customer contact, the UK Government has extended the deadline l.to ensure people have time to make their contributions.

Victoria Atkins, The Financial Secretary to the Treasury, said: “We’ve listened to concerned members of the public and have acted.

“We recognise how important State Pensions are for retired individuals, which is why we are giving people more time to fill any gaps in their National Insurance record to help bolster their entitlement.”

Thousands of taxpayers with incomplete years in their National Insurance record could be financially better off in their retirement if they make voluntary payments to top up any incomplete or missing years.

Eligible taxpayers can find out how to check their National Insurance record, obtain a State Pension forecast, decide if making a voluntary National Insurance contribution is worthwhile for them and their pension, and how to make a payment on GOV.UK.

Taxpayers can check their National Insurance record, via the HMRC app or their Personal Tax Account.

Tax agency stopped from operating by HM Revenue and Customs

A company which charged taxpayers significant sums to make claims for tax refunds has been stopped from operating.

Tax Credits Ltd (TCL) can no longer trade as a repayment agent after HM Revenue and Customs (HMRC) found they had committed serious anti-money laundering breaches.

As a result of breaching the regulations, which are predominately designed to prevent businesses being exploited by criminals to launder money, it is now a criminal offence for TCL to trade as a tax repayment agent.

The move comes weeks after HMRC outlined greater protections for customers using repayment agents.  

Taxpayers can use repayment agents to make claims for repayment of tax, and while many customers are happy with the service they receive, a large number of taxpayers have complained about the lack of transparency in agents’ processes for signing up clients and high charges for using their services.  

Angela MacDonald, HMRC’s Deputy Chief Executive and Second Permanent Secretary, said:  “TCL have ignored their responsibilities under the anti-money laundering measures designed to protect us all from financial crime.  

“We will not allow a small number of bad actors to tarnish the reputation of the whole tax agent sector. 

“It is crucial taxpayers understand the entitlements they can claim directly from HMRC and are properly protected from the misleading tactics used by some repayment agents. The greater protections we’re bringing in will help to stop people unwittingly losing their hard-earned money to misleading agents.” 

Around 11,000 TCL clients, whose claims had been paused during investigations into TCL, will now receive their tax refund directly from HMRC. 

HMRC will contact all affected clients by the end of March to explain their refund. The refunds will be made automatically – customers do not need to contact HMRC to receive their payment.

In response to public concern, HMRC recently consulted on how to protect taxpayers using repayment agents and unveiled a package of measures last month, which included stopping the use of legally-binding ‘assignments’ as part of claiming an Income Tax repayment, improving agent standards and a requirement for repayment agents to register with HMRC. 

HMRC urges anyone thinking of using a tax repayment agent to carefully consider their options when appointing a tax adviser to act on their behalf. Taxpayers are urged to do their research before committing to anything, and are reminded that they, not the tax agent, are ultimately responsible for their own tax affairs. 

Taxpayers are advised to be particularly careful when clicking on online ads as some unscrupulous repayment agents have made their customer sign-up pages appear to be mere requests for more information. 

Anyone who thinks they are owed a tax rebate can make claims direct with HMRC via GOV.UK; they can do this for free and will receive 100% of any refund. 

If a taxpayer can show a tax repayment agent has made an invalid claim with HMRC on their behalf, they can contact HMRC.

26,240 families in Scotland saved on costs with Tax-Free Childcare

More than 26,000 families in Scotland saved on childcare costs in December thanks to Tax-Free Childcare and HM Revenue and Customs (HMRC) is urging those yet to sign up not to miss out. 

The latest figures revealed by HMRC show an increase of 6,390 families in Scotland using the scheme compared to December 2021. 

Tax-Free Childcare is a financial support for working families with children up to the age of 11, or 16 if their child has a disability. The government top up can be used to pay for any approved childcare including holiday clubs, breakfast and after school clubs, child minders and nurseries.  

A total of £41.5 million in government top-up payments were made to working families across the UK in December 2022 with each family saving up to £2,000 a year per child or £4,000 if their child is disabled. 

Families who have not yet signed up should check their eligibility and apply online today.

Opening a Tax-Free Childcare account is quick and easy and can be done at any time of the year.

Myrtle Lloyd, HMRC’s Director General for Customer Services, said: “We want to help families get the most out of their finances and Tax-Free Childcare can help pay towards their childcare costs. Search ‘Tax-Free Childcare’ on GOV.UK to get started.” 

For every £8 paid into the Tax-Free Childcare account, families automatically receive an additional £2. Families can save up to £500 every three months (£2,000 a year) for each child or £1,000 (£4,000 a year) if their child is disabled. 

More than one million families in the UK are entitled to some form of government childcare support and the government is encouraging those eligible not to miss out on their entitlements.  Families can find out more about Tax-Free Childcare via the Childcare Choices website. 

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

Give the gift of Marriage Allowance on Valentine’s Day 

Married couples are being urged to consider giving the gift of Marriage Allowance to their husband, wife or civil partner this Valentine’s Day, and save up to £252 a year.   

More than 2.1 million couples currently benefit from Marriage Allowance, but HM Revenue and Customs (HMRC) estimates that thousands more couples are missing out because they don’t realise they may be eligible, particularly couples where one partner has retired, has given up work to take on caring responsibilities, or is unable to work due to a long-term health condition.    

Customers earning less than £12,570 a year can transfer up to £1,260 of their Personal Allowance to their higher-earning partner, to reduce the amount of tax they pay. They can backdate their claim to include any tax year up to 6 April 2018, which could be worth up to £1,242 in tax relief. 

Couples can use the free Marriage Allowance calculator on GOV.UK to check if they are eligible for the tax relief.

Angela MacDonald, HMRC’s Deputy Chief Executive and Second Permanent Secretary, said: “We want every eligible couple to benefit from marriage allowance tax relief. Couples whose circumstances have changed – perhaps one of them has stopped working or taken a lower paid job – may not realise they are entitled to claim.

“It’s easy to find out what you may be due – search ‘Marriage Allowance calculator’ on GOV.UK to get started. By applying on GOV.UK, rather than through a third party, you get to keep 100% of the tax relief due.” 

Those who are eligible can apply at GOV.UK for free and keep 100% of their claim. Successful claims will result in a reduction in the amount of tax paid by the higher-earning partner.  

Couples could benefit from Marriage Allowance if the following criteria applies: 

·         they are married or in a civil partnership 

·         they do not pay income tax, or their income is below the Personal Allowance of £12,570  

·         their partner pays income tax at the starter, basic rate or intermediate rate – which typically means their income is between £12,571 and £43,662

Marriage Allowance can be cancelled on GOV.UK if a couple’s circumstances change.  

To find out what other UK Government support may be available, go to GOV.UK and search ‘Help for Households.’  

HMRC: Boost your childcare budget this half term 

As the February half term draws closer, families are being reminded that they can save up to £2,000 a year on childcare costs with Tax-Free Childcare. 

More than 24,900 families in Scotland used the scheme in September 2022 and benefitted from the government paying towards childcare costs. 

HM Revenue and Customs (HMRC) is encouraging families to find out more about Tax-Free Childcare and check their eligibility via Childcare Choices. 

Tax-Free Childcare can help working families pay for any approved childcare for children aged 11 or under, or, 16 if the child has a disability – whether the child goes to nursery, a childminder, attends breakfast or after school club, has holiday care or goes to an out of school activity. 

For every £8 paid into an online account, families will automatically receive an additional £2 from the government. Parents can receive up to £500 every 3 months (£2,000 a year), or £1,000 (£4,000 a year) if their child is disabled.  

Opening a Tax-Free Childcare account is simple and takes around 20 minutes. Money can be deposited at any time and can be used straight away, or whenever it is needed. Unused money in the account can be withdrawn at any time. 

Go to GOV.UK to register and get started. 

Victoria Atkins, Financial Secretary to the Treasury said: “Tax-Free Childcare can make a big difference to household budgets and I urge families to make sure they are getting the help they are entitled to.

“It is a simple process – go online today, set up an account and start making real savings on your childcare costs.” 

Myrtle Lloyd, HMRC’s Director General for Customer Services, said: “We want to help working families and by using Tax-Free Childcare, they can use the government top-up to make their money go further.

“Search ‘Tax-Free Childcare’ on GOV.UK to find out how it could help you.” 

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 1 September after their 16th birthday 
  • 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. 

Families can learn more about the childcare offers available to them and what support they’re entitled to by visiting Childcare Choices. 

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. 

HMRC: A record 11.7 million tax returns received on time

A record 11.7 million customers submitted their tax returns on time, HM Revenue and Customs (HMRC) has revealed.

On 31 January, 861,085 customers filed online to meet the deadline, some with minutes to spare. There were 36,767 customers who filed in the last hour before the deadline, but the peak hour for filing on the day was 16:00 and 16:59, when 68,462 customers submitted their tax return.

More than 12 million customers were expected to file a Self Assessment tax return for the 2021 to 2022 tax year. HMRC is urging customers who missed the deadline to submit theirs as soon as possible or risk facing a penalty.

Myrtle Lloyd, HMRC’s Director General for Customer Services, said: “Thank you to the millions of customers and agents who got their tax returns in on time.

“Customers who have yet to file, and who are concerned that they will not be able to pay in full, may be able to spread the cost of what they owe with a payment plan.

“Search ‘pay my Self Assessment’ on GOV.UK to find out more.”

The Self Assessment payment deadline was also 31 January. If customers are yet to pay any outstanding tax, HMRC is urging them to do so as soon as possible. There are many ways for customers to pay, including online, using the HMRC app, by bank transfer, or at their bank. Payment options are listed at GOV.UK.

Customers can plan ahead for their 2022 to 2023 tax bill and set up a regular payment plan to help spread the cost. HMRC’s Budget Payment Plan enables customers who are up to date with previous payments to make regular weekly or monthly contributions towards their next tax bill.

A Budget Payment Plan is different from payments on account, which are usually due by midnight on 31 January and 31 July.

Customers need to be aware of the risk of falling victim to scams and should never share their HMRC login details with anyone, including a tax agent, if they have one. HMRC scams advice is available on GOV.UK.

Self Assessment 2023 facts summary:

  • 12,060,872 Self Assessment returns due
  • 11,733,465 (97.3%) returns received by 31 January. This includes expected returns, unsolicited returns and late registrations
  • 11,399,465 expected returns received by 31 January (94.5% of returns expected)
  • an estimated 600,000 customers missed the deadline
  • 10,965,993 returns were filed online (96.2% of returns expected, following adjustments)
  • 385,296 paper tax returns were filed (3.4% of returns expected, following adjustments)

Unsolicited returns/late registrations are an estimate based on returns received by early January and previous filing behaviour.

Data is accurate at the time of publication but may be subject to future adjustments.

Anyone who has missed the 31 January deadline may face a penalty. The penalties for filing a tax return late are:

  • an initial £100 fixed penalty, which applies even if there is no tax to pay, or if the tax due is paid on time
  • after 3 months, additional daily penalties of £10 per day, up to a maximum of £900
  • after 6 months, a further penalty of 5% of the tax due or £300, whichever is greater
  • after 12 months, another 5% or £300 charge, whichever is greater

There are also additional penalties for paying late of 5% of the tax unpaid at 30 days, 6 months and 12 months.

More than 600,000 self-employed to miss self-assessment deadline?

Handelsbanken Wealth & Asset Management research shows self-employment is changing

More than 600,000 self-employed people think they will miss the January 31st deadline for completing self-assessment tax returns and paying any money owed, new research* from Handelsbanken Wealth & Asset Management shows.

Data** from HM Revenue and Customs (HMRC) shows that a week before the deadline (January 24th), around 3.4 million had still to file returns for the 2021/22 tax year and it is expecting 12 million returns in total compared with 10.8 million for the 2020/21 tax year.

Handelsbanken Wealth & Asset Management’s research found young men aged 18-34 are most likely to believe they will miss the deadline, with 13% of them fearing they won’t respond in time.

The study highlights how the rising number of self-assessment returns reflects changes in the way people are employed. It found half (50%) of working adults say they are a PAYE employee with no additional income while, more than a quarter (28%) are retired, meaning that nearly a third (29%) – 9.4 million people –are self-employed in some capacity. Many will have PAYE jobs and self-employment income on the side, while some will be entirely self-employed.

Men (25%) are more likely than women (16%) to have an income stream from self-employment, while younger adults aged between 18 and 34 are much more likely to be self-employed at 40%, compared with older age groups. Just 20% of those aged 35 to 54 are self-employed to some extent, and only 10% of those aged 55-plus have additional self-employed income.

The West Midlands is the UK’s ‘capital of the side hustle’, with 21% of workers saying they are PAYE with additional self-employed income compared to 10% for the UK as a whole.

Overall, the West Midlands has the highest number of people who make money through self-employment, with 33% of adults needing to fill in a self-assessment tax return, ahead of London (32%) and the South West (28%).

The rise of the side hustle is partly down to the cost-of-living crisis, but is also being driven by people deciding to follow their passion alongside their PAYE employment.

More than a third (35%) said they became self-employed to do something they are passionate about, while around a quarter (24%) did it to supplement the income they receive from their main job, due to the pandemic and cost-of-living crisis. Job satisfaction is more important to younger people, with 24% of those 18-34 saying they became self-employed because they were not enjoying their job, dropping to 21% for 35–54 and just 10% for the over 55s.

Mark Collins, Head of Tax at Handelsbanken Wealth & Asset Management said: “While tax doesn’t have to be taxing, as the old HMRC adverts say, filling in self-assessment forms becomes a little more complicated when people have a range of income streams from different sources.

“There is plenty of help available from HMRC however there is the possibility of a £100 fine for being late with further penalties kicking in after three months. This highlights the importance of seeking advice, being organised and keeping a close eye on your tax records, including business income and outgoings, throughout the year.”

Anyone struggling to complete forms can visit GOV.UK to access a wide range of resources including guidance, webinars and YouTube videos.

One week left to file for fewer than 3.4 million Self Assessment customers

Millions of customers still to file their Self Assessment tax return with one week left until the deadline

With one week to go until the deadline, HM Revenue and Customs (HMRC) is urging fewer than 3.4 million customers to get their Self Assessment tax return done.

More than 12 million customers are expected to file a tax return for the 2021 to 2022 tax year and pay any tax owed by 31 January deadline. To date, almost 8.7 million customers have already filed their tax return.

Last year, more than 10.2 million customers filed their tax returns for the 2020 to 2021 tax year by the deadline on 31 January 2022.

Anyone who is yet to start their Self Assessment, or needs help completing it, can visit GOV.UK to access a wide range of resources including guidance, webinars and YouTube videos. Customers are encouraged to check online for help before calling HMRC during what is the busiest time of the year.

Myrtle Lloyd, Director General for Customer Services, said: “Time is running out for millions of people who still need to file their Self Assessment and pay any tax owed.

“There’s no need for customers to call us, they can save time and search ‘Self Assessment’ on GOV.UK for a wealth of information and resources to help them complete their tax return.”

Customers can pay their tax bill in around 60 seconds via the free and secure HMRC app. The app can also provide useful information for those yet to complete their tax return including their National Insurance number, Unique Taxpayer Reference and any PAYE information.

Customers who are unable to pay what they owe in full, may be able to set up a payment plan, allowing them to spread the cost into manageable monthly instalments. Self Assessment customers can use self-serve Time to Pay 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

For customers who pay their current estimated tax bill via Payment on Account, the first instalment for the 2022 to 2023 tax year is due on 31 January.

A full range of payment options is listed on GOV.UK.

Anyone who files their tax return or pays any tax owed after 31 January may face a penalty.

HMRC will treat those with genuine excuses leniently, as it focuses on those who persistently fail to complete their tax returns and deliberate tax evaders. The penalties for late tax returns are:

  • an initial £100 fixed penalty, which applies even if there is no tax to pay, or if the tax due is paid on time
  • after 3 months, additional daily penalties of £10 per day, up to a maximum of £900
  • after 6 months, a further penalty of 5% of the tax due or £300, whichever is greater
  • after 12 months, another 5% or £300 charge, whichever is greater

There are also additional penalties for paying late of 5% of the tax unpaid at 30 days, 6 months and 12 months.

Customers need to be aware of the risk of falling victim to scams. Check HMRC scams advice on GOV.UK.

Find out more about Self Assessment.