Tag: HMRC

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.

Almost 65,000 customers use HMRC app to pay their Self Assessment bill

Almost 65,000 customers have paid their Self Assessment bills, totalling nearly £67 million, via the HMRC app since April 2022, HM Revenue and Customs (HMRC) has revealed.  

In December 2022, 14,170 customers paid via the app – the highest number of app payments in one month since the facility was launched in February 2022.  

The Self Assessment deadline for the 2021 to 2022 tax year is 31 January and HMRC is urging customers not to delay completing their tax return and paying any tax owed. For customers who need some extra help with their tax return, there are a wide range of resources available to help them complete it, including guidance online, webinars and YouTube videos. 

Customers are encouraged to check online for help before calling HMRC during what is the busiest time of the year. The HMRC app is a quick, free and secure way to view their National Insurance number, Unique Taxpayer Reference or make a payment. It only takes around 60 seconds to pay via the app. 

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. Since April 2022, 45,600 Self Assessment customers have set up a Time to Pay arrangement. In December, around 10,500 customers set up a plan, totalling more than £36 million in tax.  

Myrtle Lloyd, HMRC’s Director General for Customer Services, said: “We want to help Self Assessment customers meet their obligations and HMRC offers a range of options to help customers pay their tax return bill.

“To choose the option that suits them, customers can search ‘pay my Self Assessment’ on GOV.UK to find out more.” 

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

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. 

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. Customers who provide HMRC with a reasonable excuse before the 31 January deadline can avoid a penalty after this date. 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. Customers need to be aware of the risk of falling victim to scams. Check HMRC scams advice on GOV.UK. 

Illegal tobacco factory smashed

One of Scotland’s biggest ever illegal tobacco factories has been dismantled after a raid in West Lothian. 

The state-of-the-art factory, capable of evading millions of pounds of duty per year, was uncovered in an operation by HM Revenue and Customs (HMRC) and Police Scotland. 

The sophisticated set up included expensive machinery and insulation to hide noise and smells. 

Four tonnes of tobacco was recovered, worth an estimated £1 million in unpaid duty. Suspected counterfeit tobacco pouches were also found and seized. 

Joe Hendry, Assistant Director, Fraud Investigation Service, HMRC, said: “This was one of the largest and most sophisticated tobacco factories we have ever uncovered in Scotland.

“We will continue to work with our law enforcement partners to target anyone we suspect as being involved in the illicit tobacco trade. 

“The illicit tobacco trade steals money from our vital public services, undercuts legitimate businesses and can fund other crimes that harm our communities.

“We encourage anyone with information about the illegal sale of tobacco or alcohol to report it to HMRC online.”  

Detective Sergeant John Irvine, Police Scotland, said: “We will continue to work closely with our partners to disrupt, detect and deter anyone involved in the illicit trade of illegal or counterfeit cigarettes and tobacco.

“We know that due to perceived higher profit margins, criminals can turn to the illicit trade in tobacco, which in turn can lead to other forms of criminality.   

“If you have any information or concerns about illegal or counterfeit cigarettes or tobacco within the local community, please get in touch with HMRC or Police Scotland. Alternatively calls can be made to Crimestoppers on 0800 555 111 where anonymity can be maintained.”

Five people have been arrested and charged. Investigations are ongoing.

From pensioners to teenagers, HMRC reveals who files a tax return

HMRC has revealed that more pensioners filed a tax return for the 2020 to 2021 tax year compared to young people.

Overall, those aged 65 and over accounted for 16% of individuals who submitted a tax return, whereas 16 to 24 year olds made up 2.7% of total filers.

The new data is part of analysis by HMRC into the demographic data of the Self Assessment population.

The findings also show:

  • people aged 45 to 54 were the largest group of filers, accounting for 24% of all tax returns submitted
  • more than 294,000 16 to 24 year olds filed a return, making up 2.7% of total filers
  • 62% of those who submitted a return last year were men, compared to 38% who were women

The data also showed that almost 146,000 people submitted their tax return at the earliest opportunity between 6 and 11 April 2021.

More than 12 million people are expected to file a Self Assessment tax return for the 2021 to 2022 tax year. Anyone yet to submit theirs has until 31 January to complete it, pay any tax owed or set up a payment plan, or risk having to pay a penalty.

Myrtle Lloyd, HMRC’s Director General for Customer Services, said: “Time is running out for anyone who has yet to start their tax return – there is a wide range of guidance and webinars available online for those who need a helping hand. Just search ‘Self Assessment’ on GOV.UK to make a start.“

Payments are also due on 31 January and customers still have time to decide which payment option is best for them. For customers who are due a refund, they should include their bank account details in their tax return so that if HMRC needs to repay them, it can be done quickly and securely.

Customers can now use the free and secure HMRC app to make Self Assessment payments, as well as accessing information which they need to complete their tax return, including their Unique Taxpayer Reference (UTR), National Insurance number and employment history.

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

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

Customers need to be aware of the risk of scams as criminals use Self Assessment as an opportunity to commit fraud. Customers should check HMRC’s scams advice on GOV.UK.

Greater control for taxpayers using repayment agents

HM Revenue and Customs (HMRC) is changing the way taxpayers who use a repayment agent can receive overpaid tax to protect them and raise standards among repayment agents.

HMRC will introduce legislation to change the way repayment agents are paid for their services and better protect customers from the unscrupulous tactics used by some operators. This means stopping the use of legally binding ‘assignments’ as part of claiming an Income Tax repayment, which could only be cancelled if the agent and taxpayer both agreed to do so. This can be challenging for customers who become dissatisfied with their agent, or who simply wish to take over managing their own claim.

Under new arrangements, if a taxpayer chooses to use a repayment agent to reclaim overpaid tax and wants it sent to the agent, they will need to make a nomination, which they can cancel at any time. The new process will make it easier for taxpayers to stay in control of their repayments.

Angela MacDonald, HMRC’s Deputy Chief Executive and Second Permanent Secretary, said: “Taxpayers deserve better – we want to make sure they are better protected before choosing to enter into an agreement with a repayment agent. HMRC’s updated standards for agents will level the playing field and provide the benchmark we expect all repayment agents to meet.”

The changes follow HMRC’s consultation last summer on ‘Raising standards in tax advice: Protecting customers claiming tax repayments’. Responses to the consultation highlighted the need to improve agent transparency and standards with the overall aim of better protection for taxpayers.

As a result, HMRC is today also setting out the following measures:

  • updated standards for agents – applicable to all tax agents and include greater transparency requirements
  • a new HMRC registration process for repayment agents – to make the agent sector more transparent so customers better understand what they are signing up to

Victoria Atkins, Financial Secretary to the Treasury, said: “For too long taxpayers have been left in the dark as a result of misleading and opaque agreements with repayment agents.

“These new measures will ensure those who are entitled to claim a tax repayment or relief can do so freely and easily – whether they choose to do this themselves or by using an agent.

“This Government is making it easier to navigate the system for all taxpayers using an agent to claim money that’s owed to them.”

Victoria Todd, Head of the Low Incomes Tax Reform Group, said: “We welcome these additional steps, which show HMRC recognises the important role they play in consumer protection.

“Refund companies have a legitimate role in the tax system, but the practices of some of these companies in recent years have been unacceptable. The proposed changes will hopefully address problems around the use of assignments, increase transparency for taxpayers and set clearer standards for these companies’ behaviour. 

“Alongside this, it is important that more effort goes into raising awareness of refunds and ensuring it is as simple as possible for taxpayers to access them. We look forward to working with HMRC on the detail of the proposals.”

These changes form part of the government’s commitment to tackle problems in the repayment agent market, which is currently an unregulated sector.

Responses to HMRC’s recent consultation overwhelmingly supported the need for improving standards in the repayment agent sector.

The updated HMRC standard for agents includes:

  • greater evidence of customer consent. This aims to ensure that taxpayers better understand the agreement they’re entering into
  • stricter transparency rules, including introducing a 14-day ‘cooling off’ period for customers after entering into an arrangement with an agent, and an obligation on agents to ensure all communications and advertising material are fair, clear, accurate and do not mislead or conceal material facts

Further details on the approach to registration for repayment agents will be set out in due course.

If taxpayers think they are owed a tax rebate, they can claim directly from HMRC via the free and secure service on GOV.UK and will receive 100% of the money owed.

It’s a cracker! 3,275 file tax returns on Christmas Day

As millions of people enjoyed Christmas festivities this year, for 3,275 people Christmas Day was the perfect time to file their Self Assessment tax return, HM Revenue and Customs (HMRC) has revealed. 

A total of 22,060 customers went online to submit their form for the 2021 to 2022 tax year between 24 and 26 December, and 141 opted to file between 23:00 and 23:59 on Christmas eve, meaning they could enjoy celebrations knowing their tax return was complete.

The breakdown of figures for those who opted to file during the festive period are:

  • Christmas Eve: 8,474 tax returns were filed. The peak time for filing was between 11:00 and 11:59, when 888 returns were received. 
  • Christmas Day: 3,275 tax returns were filed. The peak time for filing was between 12:00 and 12:59, when 319 returns were received. 
  • Boxing Day: 10,311 tax returns were filed. The peak time for filing was between 12:00 and 12:59, when 953 returns were received. 

The deadline to file and pay any tax owed for the 2021 to 2022 tax year is 31 January 2023, and HMRC is urging customers to submit their tax return on time or they may face a penalty.

Myrtle Lloyd, HMRC’s Director General for Customer Services, said: “We are grateful to those customers who have already filed their tax returns. For anyone who is yet to make a start, help is available on GOV.UK, just search ‘Self Assessment’ to find out more.”

Once customers complete their tax return, if they owe tax, they can find out about the different ways to pay including via the HMRC app at GOV.UK.

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

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

People need to be aware of the risk of falling victim to scams and must never share their login details which can be used to make fraudulent claims. Check HMRC scams advice on GOV.UK.

Find out more about Self Assessment.