UK Tax Compliance Flashcards
Who in the main falls under the self-assessment system?
Self-employed, company directors, those liable to higher or additional rate tax or in vestment income.
What tax is covered under self-assessment?
Tax on income
Class 4 NIs
Those paid be self-employed as a percentage of income
Capital gains tax
What are the HMRC looking to bring in?
Online tax accounts
How often will the online tax system be assessed and why?
Quaterly because VAT returns are quarterly and large companies do corporation tax quarterly.
How were the tax 23/24 tax returns issued? And when?
6th of April
A paper return for people who filled a paper return the year before.
A notice to complete an electronic return if filled electronically.
When do paper returns need to be submitted?
Before 31st October 2024.
When does payment need to be made for paper returns?
31 January 2025
What can be collected on paper returns if they are returned in time?
An underpayment of £3000-£17500 on a sliding scale depending on earnings.
Collected by adjustment to the following years PAYE.
Not available to those not paying PAYE and earning more than £6725 from self-employment.
What is the return date for electronic returns?
30th December 2024 if they want to receive underpaid tax from the PAYE tax code.
When is the payment date for electronic returns?
31st January 2025. Includes return date if not collecting under paid tax.
How long does someone have to submit a late return?
3 months
How much is estimated to have been lost from incorrect tax returns?
£8bn each year.
What are the payments on account?
Instalments for income tax and NIC4 made by
31st January during the tax year in question.
31st July following the tax year in question.
What is the balancing payment?
Instalments for income tax and NIC4 made by 31st January following the tax year in question.
Represents the tax paid on account from actual tax due.
Can involve a refund.
Paid with tax for next year and CGT.
Where will no payment be required on self assesment?
Liability for income tax for the proceeding year (net of tax deducted at source) is less than £1000 or where more than 80% full or gross income tax was deducted at source. (PAYE or deduction… no investment.
What is due on late payments and uder payments to the HMRC and overpayment from the HMRC?
Interest is broadly linked to the BOE base rate.
When are surcharges applied? And how much?
On tax remaining 30 days after (3rd march) and a further charge 6 months after.
5% for each.
When are surcharges applied? And how much?
On tax remaining 30 days after (3rd march) and a further charge 6 months after.
5% for each.
What are the charges for late submission of a return?
£100 penalty with £10 per day up to a maximum of £1000.
£300 or 5% the outstanding (which ever is higher) for 6 months, still no pay
£500 or 5% for 12 months.
What other charges are there?
Charges on carelessness, deliberately concealed resulting in underpaid tax or failure to keep adequate records.
When can a return be amended?
Any time up to 12 months from after the deadline for submission even when submitted early.
What is one of the more common reasons for submitting amendments?
Where an estimate was used and an accurate figure is used later.
What are compliance checks?
Samples the HMRC take to look for suspicious activity.
When should HMRC enquires usually be started?
Within 12 months of the date, they receive the tax return.
Fraudulent claims are open-ended.
