Tax Compliance
Returns in Arrears
We were engaged by the client to bring his tax affairs up to date. These were relatively complex and because of this, he had continued to leave his tax return unattended to. HM Revenue & Customs had issued the standard £100 penalties in January and July, as his tax return form had not been submitted on time. In addition, they had confirmed his tax liability which meant they had estimated the tax that was due and were seeking to collect this.
At a meeting with our client, we went through the entries required on his tax return form. Where possible, he signed authority letters which enabled us to obtain information direct from third parties. This was important, as the time scale was now critical because HM Revenue & Customs were threatening penalties of £60 per day.
Once we had collated all the information, we prepared and submitted the tax return form as a matter of urgency. It transpired that our client had no tax liability and therefore the fixed penalties were reduced to nil.
We now work closely with our client to ensure that his taxation affairs are kept up to date, and where possible, obtain the tax return information direct on his behalf. The client has the peace of mind to know that his tax affairs are dealt with, which of course leaves him free to concentrate on his own business.
Unclaimed Allowances
We were approached by a client to assist him with the completion of his tax return form. He received a substantial salary and had a small amount of investments.
On receipt of his tax return documentation, it was clear that he undertook business mileage in his own car. His employer reimbursed him for this business mileage at the rate of 9 pence per mile. When we completed his tax return form, we included an expense claim in respect of his business mileage. An individual may claim 40 pence per mile for the first 10,000 business miles and 25 pence per mile thereafter for business mileage undertaken in their own cars. If they are reimbursed by their employer at below these rates, they may make a separate claim for tax relief on the balance unpaid. For our client, this generated a tax refund of in excess of £1,700. In addition, we reviewed his affairs for previous years and obtained a similar refunds on his behalf.
Leaving the UK
We were approached by a client who was leaving the UK and she was concerned about the position in respect of her UK taxation affairs. She was letting her UK property in the UK in her absence.
We assisted with the completion of the appropriate forms notifying HM Revenue & Customs that she was leaving the country. In addition, we secured split year treatment for the tax year in which she left the UK. This meant that any income received by her during that tax year after she had moved overseas would remain outside the scope of UK tax. To avoid the letting agent witholding UK tax on rents, we completed the necessary forms on her behalf and secured HM Revenue & Customs' agreement for her to receive rental income gross. This of course significantly improved her cashflow position.
As a non UK resident for tax purposes, we now complete a tax return form for her each year to disclose details of her rental income and expenses. We obtain this information direct from her letting agent, and her mortgage lender. Therefore, our client's only concern is to notify us of any other sources of income that may arise in the UK and to sign her completed tax return form.