Good news for the self-employed
HM Revenue & Customs (HMRC) has started allowing self-employed workers to offset their mortgage interest and council tax against their annual income tax bill, an expense that accountants have historically believed to be off-limits. New guidance issued by HMRC clarifies the validity of writing off mortgage payments, council tax and even home insurance against income tax for the first time.
The number of higher-rate taxpayers doubles
The number of Britons paying higher-rate tax on their income has almost doubled since Labour was elected in 1997, official figures show. Almost four million are in the 40% tax band compared with just over two million when Gordon Brown became Chancellor, according to HMRC. The rapid rise is because the level at which higher-rate tax is paid has not kept pace with wage increases.
Ten pence tax rebellion continues
Despite unveiling a £2.7 billion package designed to compensate low-income taxpayers hit by the abolition of the 10p rate, a Labour-dominated committee of MPs slammed Gordon Brown for still leaving 1.1 million low-income households worse off. They warn him a fuller compensation package must be unveiled soon. In a bitter rebuke, the Commons Treasury Committee said Labour’s Budgets seemed to more about headlines than solving problems.
Tax evasion hotline a disaster
The taxman’s new evasion hotline has been flooded with calls making malicious and unfounded allegations, MPs have been told. Dave Hartnett, the acting chairman of HMRC, 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. 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.
New survey shows high tax a growing issue
More than four in five people feel they are paying more tax than they were five years ago. And almost three-quarters of the population resent the level of tax paid, says a survey by insurer Friends Provident.
Green Prince Charles takes advantage of tax breaks
Prince Charles invested heavily in new ‘green’ technology last year and as a result was able to cut his tax bill by over £100,000. Capital purchases include a converter for his Aston Martin to allow it to run on used cooking oil and installing woodchip boilers in his home. The Prince’s investment in green electricity supplies and a further reduction in travel-related emissions allowed him to claim that his household had generated 18% less CO2 than the year before.
Budget stealth taxes a thing of the past under Tories
‘Stealth’ taxes would be made illegal under the next Tory government, George Osborne, the shadow chancellor, has claimed. Under plans recommended by Lord Howe, a former chancellor, any changes to tax law with technical content will have to be published no later than the Pre-Budget Report at least four months before a Budget. A new joint Parliamentary committee would be established to improve scrutiny and an Office of Tax Simplification would streamline the tax code.
Clasper takes over at HMRC
The Cabinet Office has announced the appointment of Mike Clasper, CBE, formerly operational managing director at Terra Firma Capital Partners Ltd, as the new chair of HMRC. Mr Clasper will take up the post on 1st August 2008 and will be involved in the selection of HMRC’s first chief executive.
HMRC pays £155 million to shore up data security
The government will spend £155 million on improving data security after a devastating report into the loss last year of personal details of 25 million child benefit claimants said the incident was “entirely avoidable”. The report by Kieran Poynter, chairman of PricewaterhouseCoopers, is also scathing about weaknesses in the management structure of HMRC – formed after the merger of the Inland Revenue and Customs & Excise. Poynter lambasted HMRC’s “inadequate awareness, communication and training on data security”, and said there was no clear chain of responsibility for sensitive data.
£50 charge that “isn’t a tax”
Plans to tax people about £50 if they throw away too much rubbish are to go ahead – but it’s not really a tax at all, insisted Labour yesterday. “This is not akin to a tax. It’s technically a tax but … it does not behave like a tax,” said Joan Ruddock, the waste and recycling minister, in the Commons.
HMRC is believed to be scrutinising incentive schemes
HMRC is reviewing the tax paid by employers on incentive schemes, according to a report in Employee Benefits magazine. It is rumoured that HMRC is asking for detailed lists of staff who have received incentive vouchers or gifts, and their value, as well as the administrative payments made, to ensure the correct tax is paid.
£4 billion plus tax bonanza
The government has been given an unexpected £4 billion tax bonanza on the back of rising oil prices; although, as a result of the slowing economy, it will get less tax revenue in areas like stamp duty. The government makes 70p for every £1 spent on petrol.
New rules penalise taxpayers who overpay
The government is introducing changes which will drastically cut taxpayers’ power to reclaim overcharged tax. The changes, tucked away in the Finance Bill 2008, will allow HMRC to keep millions in overpaid tax and wipe its hands of any mistakes made more than four years ago. But while HMRC wants our right to reclaim tax cut to four years, it is retaining powers to clawback up to six years’ underpaid tax.
UK Treasury confirms delay of ‘foreign profits’ tax plans
The UK Treasury has delayed publishing its plans for changing the way foreign profits are taxed – proposals that drew sharp criticism from business leaders. The Chancellor of the Exchequer had said a consultation document on the foreign profits tax plans would be published before the summer. However, that has now been put back. A new date has not been set.
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