Tax Return Deadline, Confession Time, Welsh Taxes, VAT on cars and Digital Tax

Sep 25, 2016   //   by Ralph   //   Latest News

Welcome to October’s edition of Accountant’s Corner. The mornings now certainly seem to have an autumnal feel to them despite the warmth of the sun during the day. Now the summer is over the days get busier for accountants as the first self-assessment deadline is at the end of this month. Below are a few items that have caught my attention over the last month.

Paper return deadline

As I alluded to above the deadline for submission of 2016 self-assessment tax returns on paper rather than electronically is at the end of October. If you are late then don’t send in the paper one and in order to avoid a £100 fine an electronic return will have to be submitted by the 31st January 2017.

Time for confession

If you have undisclosed income from offshore sources HMRC have launched the Worldwide Disclosure Facility (WDF). This will close on 30th September 2018. There are no concessions to using it – the due tax, interest and penalties, according to the type of tax and date of liability will have to be paid and potential criminal prosecution has not been ruled out.

taxWales has introduced its first tax in almost 800 years.

The Land Transaction Tax and Anti-avoidance of Devolved Taxes bill replaces Stamp Duty Land tax in April 2018. As this is some time away I will give details of the changes nearer the time. If you are considering a property transaction it may be worth finding out if the changes will affect you.

Victory for taxpayer re VAT on car

A taxpayer reclaimed the VAT on Land Rover Freelander as a commercial vehicle for her building business. HMRC denied the claim but lost at the tribunal as the vehicle was insured for business use only. Therefore the car was not available for private use. The taxpayer also had another car that she used privately. For small businesses it is difficult to pass the pool car test. It is insufficient for the car not to be used privately – it has to be unavailable for private use, which the insurance restriction confirmed.

Making Tax Digital

One of the biggest changes in the world of taxation is on the horizon and HMRC are consulting on the new Making Tax Digital system. The UK will become the most digitally advanced tax system in the world, and is all part of trying to increase the tax take by plugging the tax gap and ensuring people pay the correct amount of tax. This will mean that all but the smallest of businesses will have to submit information quarterly to HMRC electronically. This will not just be totals of different types of income and expenditure but each transaction. There will be a requirement to record these on a system that HMRC will have access to so that they can look at the data. There are six consultation documents that cover the various areas of the changes. It will affect most taxpayers who submit a tax return. Landlords with gross income over £10,000 per annum will also be required to provide HMRC with details quarterly. Quite what they will do with all of the data. My main concerns are whether their systems will cope with it, and the security of the data before it gets to HMRC.

Llangollen resident Ralph Robson FCCA can be contacted at the Wrexham office of TA Gittins & Company on 01978 264846 or on to discuss any of the above items or with any accounting or tax queries.

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