12 Tax administration for individuals Flashcards
When is the tax return deadlines?
31st Oct, 31st Jan or three months after the issue of a tax return (latest)
What is the filing date?
31st Jan
What does a statement of account show?
Tax charges, charges of interest or penalties and any payments already made
When do HMRC correct errors on a return?
Within 9 months
When can the tax payer amend a return?
Within 12 months
When is the 1617 amendment date?
31st Jan 19
What can a tax payer do if they discover a error after the filing deadline?
Make a claim for overpayment relief
What is the time limit for notifying HMRC of charge-ability?
5th October (6 months after)
When can a determination be made?
Within three years of the filing date
How long does records need to be kept if your a business?
Must keep all their records until five years after the 31 January filing date.
What is the deadline for 1617 to keep records for?
31 Jan 2023
When should you keep P60s, P11Ds and bank statements for?
12 months after the filing date, the date on which the compliance check is completed, or impossible to start a check
When do you start making POA?
Tax liability is over £1,000
What is the exemptions for having to do a POA?
If more than 80% of the income tax liability for the previous tax year was met by deduction of tax at source
What are the POA for 1617?
Jan + July 17
What are POA required for?
Income tax and class 4
What are POA not required for?
Capital gains or class 2
How is the relevant amount made up?
Total tax less paye
What can interest arise in respect of?
POA, balancing payments, tax payable following an amendment
How is interest charged?
Daily basis from the date the tax was due to the date of payment
What are the penalties for paying late?
1 months - 5%
6 months - Additional 5%
12 months - Additional 5%
What is the basic rule on claiming loss relief for earlier years?
The tax liability for the earlier year is not adjusted. Instead, the tax reduction resulting from the claim will be set off against the tax liability for the later year.
How will HMRC tell you they are commencing a compliance check?
Written notice
When must the written notice be issued by HMRC?
Within 12 months
How many days does the tax payer have to appeal against a tax compliance check outcome?
30 days
If a taxpayer is not satisfied with the outcome of a compliance check, what can they do?
Request another officer to review, and/or refer to a independent tax tribunal
What are the two layers of the tax tribunal?
First tier and upper tribunal
What is the tax tribunal?
An independent body where cases are heard by independently appointed tax judges and/or panel members.
What does the first tier tribunal deal with?
Simple appeals, basic cases, standard cases and complex cases
What does a higher tier do?
Mainly, but not exclusively, review and decide appeals from the First-tier Tribunal on a point of law.
They will also deal with complex cases requiring detailed specialist knowledge and a formal hearing
What is the percentages for potential loss revenue for genuine mistake?
No penalty
What is the percentages for potential loss revenue for careless/failure to take reasonable care?
30% of revenue loss
What is the percentages for potential loss revenue for deliberate but no concealment?
70% of revenue loss
What is the percentages for potential loss revenue for deliberate with concealment?
100% of revenue loss
How can the maximum penalty be reduced?
Taxpayer informs HMRC, co-operates with HMRC and larger reductions given for unprompted disclosure.
Minimum penalties that vary based on?
- Behaviour
2. Whether prompted or unprompted
An unprompted disclosure of a careless error can reduce the penalty to?
0%
What is the penalty for late filing of the return after due date?
£100
What is the penalty for late filing of the return after 3 months?
Daily penalties of £10 per day (maximum 90 days), in addition to £100 fixed penalty
What is the penalty for late filing of the return after 6 months?
5% of tax due (minimum £300),
plus above penalties
What is the penalty for late filing of the return after 12 months but not deliberate?
Additional 5% of tax due (minimum £300)
What is the penalty for late filing of the return after 12 months but deliberate with no concealment?
70% of tax due
(minimum £300)
What is the penalty for late filing of the return after 12 months but deliberate with concealment?
100% of tax due
(minimum £300)
What is the penalty for fraud or negligence of reducing payments on account?
POA should less POA actually paid = Penalty
What is the penalty for failure to keep and retain required records?
£3,000 per tax year
What does an L code denote?
The letter L denotes that just the ordinary personal allowance has been given
What does a K code denote?
This indicates that the deductions such as benefits
What is the tax code calculation?
(Total allowances less total deductions) × 1/10
What’s the limit for paying PAYE quarterly?
£1,500
What is RTI penalty for 1-9 employees?
£100
What is RTI penalty for 10-49 employees?
£200
What is RTI penalty for 50-249 employees?
£300
What is RTI penalty for more than 250 employees?
£400
What is the penalty for being 3 months late with RTI?
5% of the tax and NI due
