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HMRC Let Property Campaign

HMRC are currently allowing landlords of rental properties who have previously not declared rental income to come forward and make themselves known to HMRC.  If the landlord does this HMRC will offer the best available terms in relation to penalties on the undeclared income.  If the landlord fails to act and continues to ignore their responsibilities to disclose the rental income HMRC will take a tough approach once this campaign ends.  Please remember that even if rental income matches any mortgage payments a landlord must still report the source of income to HMRC.

National Minimum Wage October 2013

From 1 October 2013 the National Minimum Wages increases to £6.31 for employees aged 21 and over.  The 18 to 20 year old rate increases to £5.03 and the under 18 non-apprentice rate increases to £3.72.  If an employer does not pay the National Minimum Wage they will face penalties and arrears notices from HMRC.

 

Child Benefit

From the end of October HMRC will begin issuing letters to people who earn over £50,000 and live at an address where child benefit is received.  The letter will explain how the changes in the child benefit system will affect the taxpayer.  From January 2013 those earning in excess of £50,000 will still be entitled to child benefit on a sliding scale up to £60,000.  Beyond that the child benefit will be reduced to nil through a new tax charge.

PAYE Underpayments

HMRC has recently announced that approximately 6 million taxpayers are due tax refunds averaging £400 each, while another million will face tax underpayment notices of approximately £600 each.  This relates to the tax year 2007-08 and earlier.

If you receive an underpayment notice firstly check that the facts are correct such as sources of income for that tax year.  Then look at the information that HMRC would have had at the time to determine your PAYE code for that tax year.  It may be that in very specific circumstances an appeal under Extra Statutory Concession A19 may be appropriate.

If you receive an underpayment notice and wish to discuss the situation further then please let us know.

HMRC Business Records Checks

Initial feedback from the first trial checks carried out by HMRC on business records indicate that they are looking at:

  • the frequency with which accounting records are written up
  • the quality of any business mileage records
  • sequential numbering of sales invoices
  • a record of drawings for the self-employed

As these initial checks on tax payers’ records were carried out on a trial basis no mention of penalties was made.

Follow up letters sent out to the business proprietor indicated that HMRC may check again within three months to see if their recommendations had been followed.