Uk Tax Conpliances

Question 1

Basics of self assessment

Answer 1

Onus is ok individual taxpayer to ensure that they declare their tax liability and pay right amount of tax

For most don’t need to compete self assessment unless make a capital gain, most peoples income is taxed under PAYE for employed

Self assessment covers the following

Income tax, class 4 NI contributions - paid as a % of income and capital gains

All dealt with by a single tax return covering the period of tax year from Apr 6 to Apr 5

Jfyi - vat returns now done quarterly

Question 2

Deadlines for submission

Answer 2

For a self assessment you are issued one on the 6 April following tax year in question. I.e 23/24 issues one 6 April 24. There is then a deadline when you need to return it, see below

For tax returns to be filled in and ‘returned’ for paper this needs to be 32 Oct 24

For paper this needs to be 30 Dec 24

Then first payment will be due 31 Jan 25

Question 3

Paying tax via self assessment

Answer 3

Income tax and class 4 contributions generally made in 3 instalments

31 Jan during tax year
31 July following tax year
31 Jan following tax year

Question 4

Late or unpaid tax

Answer 4

For any tax due 30 days after the date of the balancing payment is due i.e 3 march (31 Jan plus 30 days) 5% surcharge is levied with another 5% on any tax still unpaid after 6 months after payment due date

For kate submission of return
£100 penalty plus £10 per day up to max of £1000 if it remains outstanding after 6 months a further £300 or 5% if the outstanding tax (the higher) is due with another £500 or 5% due at 12 months

Question 5

Amendments and enquiries

Answer 5

Taxpayers themselves can amend their returns at any point in the 12 months after the deadline submission. So for an electronic submission for 2023/4 can be amended up to 31 Jan 26.

HMRC do not check the details of each return but check for obvious errors then sample a few for analysis. There more detailed checks are known as ‘comoliance checks’

Unless HMRC suspects fraud they have 12 months to review if think fraud time to investigate is unlimited

Question 6

PAYE and employer responsibilities

Answer 6

Employers will submit PAYE via real time information system RTI

Persons are given tax code, eg 125L means got full personal allowance

K tax code means no PA - if K100 1000 is double taxed

Each month employer deducts tax- NI and this must be submitted and paid via RTI within 2 weeks after the end of the tax month

End of each year the employer must submit following to employee and HMRC

P11d - benefit in kind received by 6 July

P60 - total earnings and relevant deductions by 31 may

Question 7

Tax mitigation

Answer 7

Tax evasion illegal, tax avoidance legal

Note offshore tax havens, withholding tax of 35% on these

The DOTAS regime - disclose of tax avoidance schemes of HMRC

All should be registered game if cat and mouse

Affluent and compliance team- 300 inspectors, deal with tax payers at ART band and those with wealth between 2.5 and 20 mil

General anti-buse rule: GAAR - how UK government manages abuse of tax, applied to number of different taxes.

Question 8

Business relief for AIM

Answer 8

100% if held for 2 years or more