Drive to help women boost their state pension

Women pensioners could boost their state pension or even be in line for a windfall payment under special terms. But they need to act quickly as the arrangement, which allows people to pay for missed National Insurance contributions, will be unavailable in less than two years.

Women who have gaps in their National Insurance record for years between April 1996 and April 2002 are entitled to buy back the missing years at a special rate. Any improvements in State Pension are backdated to when women first drew their State Pension and could result in a lump sum pay out.

Pensions Reform Minister, Mike OBrien, said:
"Generous rules enable women to boost their pension or to receive a backdated sum, typically about 1,400. Whilst making voluntary National Insurance contributions won't be suitable for everyone, we want to give people the right information to help them make a choice."

Malicious hotline calls disappoint HMRC

The taxman’s new evasion hotline has been flooded with calls making malicious and unfounded allegations, MPs have been told. Dave Hartnett, acting Chairman of HM Revenue & Customs, said he was “disappointed by the quality” of calls to the line aimed at catching tax cheats, but added that the call figures for the current year showed an improvement.

One woman made 68 calls to report her husband, none of which resulted in an investigation, the House of Commons Public Accounts Committee was told. The all-party committee of MPs was told that 28,000 people were investigated each year for tax evasion. Hartnett denied claims by chairman Edward Leigh that the chances of their being caught were “virtually nil”. “We are getting better and better at catching people,” Hartnett argued. However, he conceded that only two cases per thousand were successfully prosecuted. “It is a low number and we do have plans to increase it,” he said.

He added that since it had been set up, the tax evasion hotline had received 120,000 calls, resulting in 2,000 completed investigations. But according to a National Audit Office report, the hotline had proved the least cost-effective tax fraud detection method. The tax retrieved by the hotline amounted to just double the cost of operating it, the committee was told.

Watch out if you are investigated!

The ordinary taxpayers, who can't afford high cost legal eagles to protect them from overzealous tax investigations, are going to face a tough time in the future with HMRC.That is the view of Nichola Ross Martin, Accounting Web's UK Tax Editor, who spoke at recent tax conference at the ICAEW in London about new HMRC powers.

She is quoted as saying:"Unrepresented taxpayers will not stand a chance under HMRC's new penalty regime.Many accountants are in for a bit of a shock too. It was an unhappy coincidence that shadow home secretary, David Davies happened to chose the same day to resign his parliamentary seat on account of 'the insidious erosion of civil liberties in the UK'.

" The new tax penalty system allows abatements/reductions from a statutory maximum penalty, by decreasing penalty charges according to taxpayer behaviours. However, HMRC will be required/allowed to pass subjective judgement on the affairs of taxpayers.This subjective judgement will be fraught with dangers.The taxpayers themselves will be expected to know if they need professional help or not in their tax affairs, they will then also be responsible for the selection a suitably qualified accountant. HMRC's Compliance Handbook is not easy reading, even for those who are tax specialists, and is designed to obfuscate rather than help.

A sure sign, if ever one were needed, that HMRC is loading the dice in its favour.

Frank Haskew of the ICAEW concluded that HMRC "is consulting but not actually listening" and that "there are diametric views as to what is actually a safeguard" within HMRC.

The dice are well truly now loaded against the ordinary taxpayer.Just you watch Brown and his cronies running HMRC bleed us dry, as they desperately scrabble in the mud for extra tax revenues to prop up Brown's expensive failed economic model.

I will just reiterate all taxpayers should have some sort of tax investigation insurance policy in place. Contact me for details if you would like to join our scheme.

Tax Free Bicycles for employees

You can provide your employees with bicycles and associated safety equipment tax free to the business (and employee), provided that these remain the property of the employer, and that they are actually used to cycle to work.

Contact us for more details

Can you benefit from joining the VAT Flat Rate Scheme?

The VAT Flat Rate Scheme is a scheme introduced by HMRC to streamline their VAT checking procedures.

If your business has a turnover less than £150,000, you are eligible to apply. How it works is fairly simple - for your given businesss sector, you are assigned a flat rate percentage (for example, most IT contractors work at 13%).

Under this scheme, the VAT due on income is calculated as ( flat rate percentage ) X gross income.

However, it should be noted that your business cannot reclaim the VAT on business expenses (unless the individual item is greater than £2,000 net).

In addition, for the first year of VAT registration, HMRC allows a further 1% discount as an incentive, reducing the output VAT even further.

In summary, for many businesses, it is well worth registering for the flat rate scheme as it can reduce your VAT quarterly payment significantly. Please contact us for a free review to see if you could benefit from using the scheme.

Animal Farm

It would appear that HMRC are most definately fans of George Orwell - in particlar his work "Animal Farm"

In this book the animals take over the farm; the pigs then betray the other animals and impose a dictatorship, using the slogan "All animals are created equal but some animals are more equal than others" to justify their actions.

It appears to be with HMRC's proposed new rules with time bars on making claims for tax errors. HMRC are proposing to cut the number of years taxpayers will have to claim back any tax overpayments/overcharges.

Fair enough, maybe if the rule is also applies to HMRC's right to claim underpaid tax fromthe taxpayer. However, there is one small fly in the oinkment - HMRC don't intend to apply the same timebar to theri right to claim underpaid tax from the taxpayer.

When taxpayers are wrongly charged they currently have 6 years to claim back their money. HMRC want to cut the time to 4 years. They want of course to retain their right to reclaim underpaid tax for up to 6 years. Those who are most likely to suffer from tax overpayments are those on low incomes. This is because the system for extra allowances, tax credits and pensions is so complex that HMRC and taxpayers are more often than not at a loss to understand it!

Given the complexity and muddle of the tax system why is it that HMRC wants to cut back on the rights of taxpayers to reclaim overpaid tax yet not apply the same rules to itself? Hardly fair is it?

All animal are equal but some animals are more equal than others!



Thanks to Ken Frost http://hmrcisshite.blogspot.com