Chancellor Philip Hammond has commissioned the Office of Tax Simplification (OTS) to review the UK’s inheritance tax (IHT) regime, and outline ways in which the tax can be simplified.
In a letter to Angela Knight, Chair of the OTS, and its Tax Director, Paul Morton, the Chancellor acknowledged that the existing IHT regime is ‘particularly complex’.
He stated: ‘I would be most interested to hear any proposals you may have for simplification, to ensure that the system is fit for purpose and makes the experience of those who interact with it as smooth as possible.’
Mr Hammond suggested that the OTS’s review should focus on technical and administrative issues surrounding the tax, alongside practical issues related to estate planning and disclosure.
The review should also examine how existing gifts rules interact with the IHT system, and look at whether the current rules cause taxpayers to rethink their decisions in regard to transfers and investments, said the Chancellor in his letter.
IHT is currently charged at 40% on the proportion of an individual’s estate exceeding the ‘nil-rate band’ of £325,000. The residence nil-rate band (RNRB) also applies in addition to the nil-rate band, meaning that a family home can be passed wholly or partially tax-free on death to direct descendants, such as a child, grandchild, step-child, adopted child or fostered child.
A scoping document for the review into IHT will be published ‘in due course’, the OTS said.
Research carried out by Ipsos Mori on behalf of HMRC has suggested that self assessment tax return letters sent to taxpayers by the Revenue take ‘too long to get to the point’.
HMRC sought to discover whether the tone and content of its self assessment letters was correct, how easy the letters were to understand and whether they ‘needed more clarification’.
A lack of urgency was present within the letters, Ipsos Mori’s research found: recipients of the letters stated that they felt the communications took ‘too long to get to the point’. Many taxpayers said that they would have preferred the letter to outline clear action points early on.
The findings also revealed that individuals who received letters in regard to their self assessment tax returns avoided calling HMRC due to negative experiences dealing with it in the past.
In addition, taxpayers reported that the letters they received appeared to be ‘generic communications’, as opposed to ones containing information tailored to each customer’s specific circumstances.
HMRC stated that it will use the research in order to simplify the letters it sends to taxpayers.
The deadline for submitting your 2016/17 self assessment tax return online is fast approaching. Those who submit their return after midnight on 31 January will receive a penalty of £100, even if there is no tax to pay. Further penalties will be issued for continued payment failures.
As your accountants, we can advise you on any payments due. Please contact us for help with your tax and accounting needs.
The National Audit Office (NAO) has launched a new tax centre with the University of Birmingham, which will seek to inform improvements in the administration of the UK tax system.
The new body, termed the NAO – University of Birmingham Tax Centre, will provide economic, financial and legal evidence in order to achieve this.
It will also assess the UK tax gap; the impact of the government’s Making Tax Digital (MTD) initiative; and the issues of tax evasion and avoidance.
Co-founder of the centre, Professor Kimberley Scharf, stated that the centre will bring together the NAO’s experience in helping the government to improve public services and the University of Birmingham’s academic approach to tax.
Research on tax, both past and present, will be made accessible by the Tax Centre, and debate will be encouraged, enabling government bodies, academics and tax practitioners to discuss requirements and practical issues.
The Centre will be led by a Steering Committee, including members from both the NAO and the University of Birmingham.
HMRC has moved to block the sending of unsolicited scam text messages to taxpayers, the government has revealed.
It said that 90% of the ‘most convincing’ scam text messages claiming to have come from the tax authority were blocked before they reached individuals’ devices.
Within the scam text messages, criminals often make false claims, such as informing taxpayers that they are due a tax rebate. These messages tend to include a link to a website that is designed to collect victims’ personal information, or to infect their device with malware.
The government stated that it never contacts customers who are due a tax rebate by text message or email.
Commenting on the matter, Angela MacDonald, Director of Customer Services at HMRC, said: ‘HMRC is focused on becoming the most digitally advanced tax authority in the world, and a big part of that relates to keeping our customers safe from online scammers.’
‘As email and website scams become less effective, fraudsters are increasingly turning to text messages to con taxpayers.’
‘We have made significant progress in cutting down these types of crime, but one of the most effective ways to tackle it is still to help the public spot the tell-tale signs of fraud.’
Taxpayers who do receive scam text messages are urged to forward the information to 60599, or email email@example.com.
As the self assessment deadline draws nearer, HMRC has revealed that around a third of people have yet to file their tax return.
According to the latest figures, as at 24 January around eight million people had completed their tax return, leaving just over three million returns still to be submitted.
It is thought that some 840,000 people missed the filing deadline last year.
‘The seven-day countdown has now begun,’ warned Angela McDonald, HMRC’s director general of customer services. ‘Put a stop to that niggling feeling and do your self assessment now.’
Those who submit their return after midnight on 31 January risk incurring a £100 fine, even if there is no tax to pay. Further penalties are then issued for prolonged delays.
Last year, HMRC announced plans to reform the current penalty system for late or missing tax returns. Under the proposals, which are subject to consultation, taxpayers who miss the deadline would receive driving licence-style points instead of an immediate fine.
Taxpayers would only then be penalised once their points reached a specified level.
Please contact us for assistance with your tax affairs.
More than half (53%) of employers currently paying the apprenticeship levy would like to see it replaced with a ‘training levy’, according to a new survey carried out by the Chartered Institute of Personnel and Development (CIPD).
Of more than 1,000 employers questioned, just 17% of those paying the levy said they supported it, while four in ten claimed it would make ‘little or no difference’ to the training they provide.
The study also revealed that 46% of levy-paying employers will simply ‘rebadge’ their existing training in order to meet the requirements.
Introduced in April 2017, the apprenticeship levy is paid by employers with a pay bill of more than £3 million each year. The levy is 0.5% of the pay bill, although there is an annual allowance of £15,000.
The change was included as part of a package of measures to reform the funding of apprenticeships for all employers.
Commenting on the survey’s findings, Lizzie Crowley, Skills Adviser at the CIPD, said: ‘Our research shows that the straitjacket of the apprenticeship levy is forcing many firms to re-badge a lot of their existing training as apprenticeships, as they seek to claw back the levy they pay. In many instances this is not adding any additional value and is creating a lot of additional bureaucracy and cost.
She continued: ‘The government needs to seriously review the levy to ensure it is flexible enough to respond to employers’ needs and to drive the greater investment in high quality training and workplace skills needed to boost UK productivity.’
A survey carried out by American Express and Oxford Economics has suggested that UK small and medium-sized enterprises (SMEs) are feeling optimistic in regard to their role within the global economy.
The survey aimed to identify the key challenges businesses face in 2018, and outline the strategies and opportunities they will make use of over the coming year.
57% of businesses surveyed stated that they feel optimistic about the global economy and their role in it.
UK SMEs intend to go ‘back to basics’ this year, and will prioritise meeting their customers’ demands in order to drive growth. The research revealed that 45% of firms believe that this is crucial to revenue growth.
The survey also found that 41% of UK firms will use the advantages associated with being an SME to help accelerate growth in 2018.
Commenting on the matter, Jose Carvalho, Senior Vice President at American Express Global Commercial Payments, said: ‘Our research shows that the UK’s smaller enterprises are primed for success in 2018 by focusing on their special advantages, staying close to their customers and improving efficiency.
‘As an integral part of the economy, and the frontline of British business, SME optimism should instill confidence in other UK businesses and stakeholders.’