Have HMRC really waived £100 fine for late self-assessment filing?

If you keep up to date with accountancy news, you may be aware of the rumours that HMRC have been waiving the £100 late self-assessment fine that is usually imposed by HM Revenue & Customs, if the filer has a “reasonable excuse”.

HMRC staff were asked to waive the £100 fine if people with mitigating circumstances appealed after paying up – this was all reported in an internal memo allegedly leaked to the Daily Telegraph.

It is estimated that up to 890,000 people could have potentially benefitted from the amnesty for missing the 31 January deadline as HMRC deals with a backlog of nearly a million letters from British taxpayers.

HMRC said it was trying to focus its resources on tackling major tax avoidance instead of "penalising people for trying to do the right thing".

However, previously, people who appealed the fine faced a two- or maybe even three-week investigation of their tax affairs before a decision was reached.

Leaked HMRC memo

The HMRC memo questioned the "lengthy" process, especially given that the "overwhelming majority of appeals" were actually accepted.

The alleged leaked document stated;

"Our penalty regime is intended to influence customer behaviour, but also be clear and cost effective, fair and proportionate.

"The current way of managing penalties does not meet these objectives, and so we have decided to take a more proportionate approach where a customer has filed their return late, and then appealed against their penalty.

"This means that in the vast majority of cases we will be accepting the customer's grounds for appeal, and we can cancel the penalty."

So, have HMRC really waived the £100 fine for late self-assessment filing?

It may be a hunch, but perhaps the recent act of goodwill could be something to do with a backlog of paperwork and the need for a less complicated appeals system?

In any event, don’t risk filing your self-assessment late - a spokesman for HMRC did add that despite the policy, nobody will be getting off the hook unless they've now sent in their return and "have a good reason for sending it in late".

Don’t take a chance – particularly when affordable help is at hand from Omni Chartered Accountants. Click here to contact us now, request a free of charge call-back from our website http://www.taxandaccountancysolutions.co.uk  or take our Accountancy Savings Challenge today!

What abolishing the  tax return means for your business

Digital tax accounts taxpayer easy guide 2015

It is nothing new for taxpayers or their agents who already use HMRC’s services to manage their tax affairs online. In fact, over 85 per cent of Self Assessment tax returns are already completed this way.

Digital tax returns to replace tax returns announced in 2015 Budget

The Government has announced their plans to update the tax system, by replacing traditional tax returns with digital tax accounts for millions of UK individuals and businesses.

From early 2016, around five million SMEs and ten million individuals will have access to their own digital tax account and by the end of the next Parliament, every individual and SME in the country will have one. But what does this mean  to you and your business?

At the moment, there is still some uncertainty as to the finer details and many sole traders and small businesses are concerned about the changes and how it will affect them.

Later this year, the government intends to publish its roadmap and further consult on the changes; some of these changes will require investment in new systems and changes to legislation.

What abolishing the  tax return means for your business

Digital tax accounts taxpayer easy guide 2015

• Businesses and individuals will be able to view and manage their tax information online
• Taxpayers will be able to see how their tax is calculated
• There will be options for paying securely online
• Taxpayers will be able to check how much tax they owe or need to be repaid online
• Businesses with more than one tax affair - like corporation tax, VAT and Pay-As-You-Earn (PAYE) - will be able to view their total liabilities across the board
• HMRC will already hold information on file along with third party data
• Those who pay tax through PAYE will have their National Insurance contributions, income tax, and pension position shown in their digital tax accounts, including any interest from banks and building societies

Although it is not exactly clear yet as to the timing or the implications, we will keep you informed with all of the latest news and developments. Losing the paper does not mean that you will no longer need an accountant – looking ahead and adapting your business to deal with any changes will be the key to making the transition smoothly. 

HMRC will be in receipt of real time data and information, it is going to be vital to ensure that all information entered is clear, correct and validated prior to updating your digital account.

In the meantime, if you would like to contact us please click here, or request a free of charge call back from our website. We are also available for online chat via @OmnitasTax or you can join in the conversation on Facebook.

10 ways to get the best value from your accountant

An accountant can sort out your tax return or your annual accounts and provide advice on a range of issues, but how do you get the best return on the fees you pay to an accountant? 

1.   Choose carefully

Look for accountants with experience of your type of business. Anyone can set up as 'an accountant', so look for chartered or certified accountants, whose qualified status is backed by membership of professional bodies. A large firm suggests reliability, but a smaller one may respond better to your needs. Ask prospective accountants how they can help your business.

2.   Explain your expectations

Your accountant will summarise terms and conditions in a letter of engagement. Put your expectations in writing, too. Describe the level of service you require, for example, how quickly you need queries to be answered. Ask to deal with a specific contact, to help build a close professional relationship.

3.   Ask questions

Check what other services your accountant can offer. These could include guidance on setting up your business, preparation of financial forecasts, help with loan applications, audits, investment advice and other suggestions for minimising your tax liability.

4.   Use your accountants’ contacts

Accountants specialising in your type of business can often suggest good trade contacts. Perhaps your accountant knows a supplier who can offer you a great deal or maybe they know of a potential investor.

5.   Keep talking

Communicate regularly with your accountant to get the best possible value from the relationship. Schedule quarterly meetings to review your firm’s performance; this will help you plan better for the future. Be sure to meet before producing your end-of-year accounts or tax return.

6.   Keep user-friendly records

If necessary, ask your accountant for advice about how best to maintain your financial records. If your books are easier to read, you will save them time, which should mean a lower bill. 

7.   Do the easy jobs yourself

To reduce your outgoings, take care of simple bookkeeping tasks yourself, possibly by using accounting software. You could then better focus your accountants’ efforts where they best serve your business.

8.   Delegate

If your time would be better spent concentrating on sales or product development, you could ask an accountant to take greater responsibility for your bookkeeping and payroll. This would free you up to make more profitable use of your time.

9.   Shop around

Armed with recommendations of good accountants, get a full breakdown of an accountant's charges and services. Work out which one offers you best value for money (and that's not necessarily the cheapest, of course). And, at least once a year, review the value for money you receive. If you believe you can get better advice and value elsewhere, go elsewhere.

10.   Seek advice

An experienced accountant can offer sound advice in a number of areas. For example, they could help with your business plan, help you estimate the cost of new projects or advise on the levels of investment needed to achieve your business development goals.

We understand that all clients are individual and as such have different needs – our cost effective but personal approach gets results and ensures that customers always get the best out of their accountant if they choose Omni.

For more information, call 01902 837 408 today, request a call-back or contact us.

Top 10 worst excuses for not filing or paying tax returns

HM Revenue and Customs have released their latest list of the 10 worst excuses people have given for filing or paying their tax return late (yes, seriously):

1.      My pet dog ate my tax return…and all the reminders

2.      I was up a mountain in Wales, and couldn’t find a post box or get an internet signal

3.      I fell in with the wrong crowd

4.      I’ve been travelling the world, trying to escape from a foreign intelligence agency

5.      Barack Obama is in charge of my finances

6.      I’ve been busy looking after a flock of escaped parrots and some fox cubs

7.      A work colleague borrowed my tax return, to photocopy it, and didn’t give it back

8.      I live in a camper van in a supermarket car park

9.      My girlfriend’s pregnant

10.  I was in Australia

Whilst it is possible to appeal the late filing penalty that HMRC will automatically levy for filing or paying late, unsurprisingly, none of the above led to a successful appeal.

Given the above exactly what does count as a ‘reasonable excuse’?

A “good” reason for consideration has to be something unexpected or outside of your control.

For example, if your partner died shortly before the tax return or payment deadline, or if you had an unexpected health issue resulting in a stay in hospital that prevented you from dealing with your tax affairs, it is likely that this would be considered.

Excuses such as bounced payments, a general lack of funds, difficulty using the HMRC online system or the lack of a reminder letter would not be allowed as reasonable excuses.

Clearly, the best way of avoiding a late filing penalty is to submit your tax return, and pay any tax due, by the 31 January. No surprises, really.

If you need assistance with your tax return, give Omni Chartered Accountants a call now on 01902 837 408 or contact us.

Self assessment tax return help

The self-assessment tax return is an unavoidable burden if you are liable for self-employed tax or have more complicated income tax affairs. Both self-employed business owners and company directors must complete self-assessment tax returns.

The right approach to your self-assessment tax return will minimise aggravation and can reduce the amount of income tax that you end up paying.

Our guidance will help you understand the key issues that need to be dealt with. For help with the specifics, talk to an accountant: professional expertise should save you time and money.

Registering for self-assessment

Who needs to complete a self-assessment tax return?

·         Recently self-employed

·         Have become a partner in a partnership

·         Are a company director

·         Have untaxed income (perhaps from rental property or complicated income tax affairs)

·         Have an income of £100,000 or more

·         Need to pay capital gains tax or have expenses to claim

There are a number of circumstances under which you may be required to complete a self-assessment tax return.

You can find out if you need to complete a self-assessment tax return on the HM Revenue & Customs (HMRC) website, or by giving Omni a quick call on 01902 837408.

Before you can complete your first self-assessment income tax return, you will need to register with an accountant or with HMRC. You should register as soon as your circumstances change but certainly no later than 5 October after the end of the tax year for which you need to submit a form.

Avoid HMRC penalties by filing your self assessment tax return by end of January!

Have YOU filed YOUR self assessment online return?

According to recent estimates, only seven million out of the twelve million individuals and businesses across the UK who were required to file their HMRC self assessment tax return have actually done so.

The online deadline is less than one month away.

Are you one of the five million that need to get their act together to avoid severe penalties?

Self assessment tax return penalties 2015

 The standard HMRC fixed penalty for failing to file your tax return is £100 – but don’t be fooled into resting on your laurels.

Daily penalties of £10 per day – with a maximum cap of £900 will also apply if your tax return is still outstanding 3 months after the deadline date.

Act now to avoid HMRC late self assessment filing penalties

We can help you make that all-important deadline – all you need to do is send us, where possible, your books and information that we need to prepare and file your self assessment with the HMRC on your behalf.

Our open pricing policy is competitive and a standard self assessment will cost just £95 at our current rates.

Get in touch today and act quickly – when you choose Omni Chartered Accountants, you know that you are in safe hands