17 Jan 2014 09:45am

The latest tax update

Our look at the technical updates and notices in the tax world over the last fortnight

ICAEW responds on paperless self-assessment

The ICAEW Tax Faculty has taken HMRC to task over the short time given for consultation on its digital strategy and the necessary legislative changes to enable paperless self-assessment

In its response, it complained that the one-month period – which spanned the Christmas holidays – was too short for wide consultation with ICAEW members. “We would therefore welcome the opportunity to provide further input on the practicalities of the proposals going forward,” it says.

Having said that, the faculty does support HMRC’s proposal to send communications to self-assessment online taxpayers who choose online rather than paper as a preferred means of communication – with qualifications. For instance, it suggests that taxpayers should be given the option for online or paper delivery for each type of communication, rather than a blanket opt-in or opt-out.

It also points out that the option for paper communication will have to remain in place for the foreseeable future to continue to meet the needs of those who are less able to cope with digital communication or those – such as members of parliament – who cannot file their tax returns online for security reasons.

The faculty is concerned about the ability of the taxpayer to distinguish between genuine HMRC and phishing scam emails. “The use of the secure mailbox will assist but we suggest that the email/SMS should not contain a link to the government gateway or the secure mailbox as a matter of security and taxpayers should be advised of this,” it says.  

Finally, it backs the idea that HMRC should explore the use of social media channels for other means of electronic communication with taxpayers. 

Cyprus VAT rate change

VAT information sheet 1/14 explains that the VAT rate in Cyprus increased from 18% to 19% on 13 January 2014.

Provisional P35s – deadline reminder

HMRC has issued a reminder to employers who submitted a provisional P35 for 2012-2013 and paid tax and/or national insurance contributions on account in line with the special rules for intermediaries. They have until 31 January to submit an amended P35 and pay any additional tax/NICs due.

If HMRC does not receive an amended P35 and balancing payment by that date, the original P35 will be considered to reflect figures which the employer declares to be final and correct.

Stamp taxes and ECCNV securities

The Stamp Duty and Stamp Duty Reserve Tax (European Central Counterparty NV) Regulations 2012, SI No 9, have been laid before parliament and will come into operation on 30 January.

As well as revoking and replacing The Stamp Duty and Stamp Duty Reserve Tax (European Multilateral Clearing facility NV) Regulations 2011, they give relief from stamp duty and SDRT to certain transfers of, or agreements to transfer, traded securities or options made in the course of trading in those traded securities or options either on a facility or over the counter. To be eligible they have to involve the European Central Counterparty NV.

Extra-statutory concessions A4 and A10

HMRC has published details of The Enactment of Extra-Statutory Concessions Order 2014, which was laid before Parliament on 6 January.

The Order enacts extra-statutory concessions A4 and A10. A4 covers income tax exemptions relating to the payment or reimbursement of travel expenses of directors in certain situations. A10 provides relief from income tax on lump sums paid under foreign pensions schemes.

Company car and car fuel benefit calculator updated

HMRC has updated the company car and car fuel benefit calculator to include calculations for 2014 to 2015. This means the calculator now covers calculations relating to 2009/10 onwards.

The calculator enables employers and employees to calculate the “benefit in kind” of a company car and, if appropriate, the car fuel benefit. It also gives some indication of the income tax liable to be paid for the provision of these benefits.

Excepted estates – consultation

HMRC is consulting on the draft Inheritance Tax (Delivery of Accounts) (Excepted Estates) (Amendment) Regulations 2014. These will amend the 2004 regulations to make sure that the treatment of liabilities is consistent with Finance Act 2013 which restricts the deduction of liabilities for inheritance tax purposes in certain situations.

The deadline for comments is 7 February.

Special Scheme currency exchange rates

HMRC has issued a new VAT leaflet (VAT Info Sheet 16/13) setting out the currency exchange rates for the period ending December 2013 for non-EU businesses registered in the Electronically Supplied Services Special Scheme.

Other headlines

Millions of workers confused on tax 

Tax cuts benefit entertainment industry

HMRC payroll crackdown bears fruit

Riches leaves CIoT

BDO taxman joins UHY

KPMG takes on EY tax directors


Julia Irvine