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Harris & Co
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Low taxes key to Brexit success
The Telegraph’s Roger Bootle says raising tax rates would be one of the best ways to undermine the chances of Brexit succeeding. He suggests any gains from Brexit will come from adopting a reformed regulatory system and a creating a business-friendly economy. “Accordingly, we should be thinking about lower taxes, not higher ones,” he adds. Elsewhere, Mark Littlewood, director-general of the Institute of Economic Affairs, writes in the Times that further devolution of tax powers after Brexit is required to counter “simmering resentment with the power of Whitehall.”
Source: The Daily Telegraph

Britain’s taxation system is an inefficient mess
Paul Johnson, director of the Institute for Fiscal Studies, says the UK’s tax system needs overhauling to cope with new demographic circumstances.
Source: Financial Times

AAT: Rethink needed on rent-a-room rule change
The Association of Accounting Technicians (AAT) has urged ministers to drop plans to change ‘rent-a-room’ rules which allow people to earn up to £7,500 a year tax-free from letting out a spare room. The AAT fears that a new “shared occupancy test” that will only offer tax relief to landlords present at the property during the rental period will add unnecessary complexity to the tax system. Phil Hall, AAT’s head of public affairs and public policy, said the reform would force landlords to complete a self-assessment tax return when they otherwise wouldn’t, and may reduce the availability of accommodation by deterring people from renting out spare rooms.
Source: Simple Landlords (06/08/2018)

HMRC’s contractor tax testing tool misleading
An investigation by advice website Contractor Calculator has found that HMRC’s “check employment status for tax” (CEST) tool is routinely misleading contractors and the self-employed. The online tool is supposed to provide clarity over employment status but in nearly half of cases it is falsely indicating that self-employed people fall inside IR35 rules. A FoI request by Contractor Calculator found HMRC had assessed only 24 tribunal cases as part of CEST testing. CEO Dave Chaplin commented: "HMRC is failing in its duty of care to make sure the right amount of tax is collected. It seems HMRC is trying to get the most amount of tax rather than the right amount. These people are being forced into false employment.”
Source: The Daily Telegraph (02/08/2018)

Rent a Room relief provides up to £7,500 tax-free income that can be received from renting out a room or rooms in an individual’s only or main residential property.
The government proposed scrapping or substantially amending the relief in a recent public consultation but announced earlier this month that it will be retained at its current level of £7,500 per annum.
There will now be a ‘shared occupancy test’ which means that relief can only be claimed when the landlord is present at the property during the rental period.
‘The shared occupancy test will effectively bring an end to rent-a-room relief for those renting their whole properties out or who rent out a single room whilst they are away,’ says the AAT.
Absent landlords will have to rely on the much lower £1,000 property allowance instead.
The move was prompted by concerns over the growth of peer-to-peer rental marketplaces such as AirBnB.

CIOT welcomes easing of MTD requirements
The CIOT has welcomed the legal status of HMRC’s “soft landing” intended to help taxpayers meet the IT demands of Making Tax Digital for VAT. Businesses who have a turnover above the VAT threshold will be required to comply with the Making Tax Digital for VAT rules from April 2019. A recent VAT Notice published by HMRC said that in the first year, businesses will not be required to have digital links between software programs. In this initial period, HMRC will accept the use of cut and paste, or manual transfer, as compliant for these VAT periods. John Cullinane, CIOT Tax Policy Director, said: “Most businesses want to comply with what the law requires them to do, and this approach from HMRC helps ensure that is the case.”
Source: Politics (28/07/2018)

Businesses struggle with tax compliance burden
Research from the British Chambers of Commerce and Avalara show that the vast majority of UK businesses feel the burden of complying with tax regulations has escalated in recent years, with three in four saying the cost had increased compared to five years earlier. According to the survey, 64% of businesses said that VAT created the biggest administration, a finding mirrored in the responses of firms across all sizes and sectors. The BCC is urging ministers to reduce the complexity of current tax regulations and facilitate additional support from HMRC for companies trying to stay compliant, with a particular focus on SMEs.
Source: The Scotsman (25/07/2018)

HMRC's 'aggressive' tactics resulting in judicial reviews
The number of taxpayers taking HMRC to the High Court rose by 36% last year, amid suggestions the Revenue is taking a more aggressive stance when pursuing individuals. Legal firm RPC said this has resulted in an increase in legal challenges by those who believe HMRC has overstepped the mark or acted in an unfair manner. HMRC faced 122 judicial reviews in 2017, up from 90 in the previous calendar year. Adam Craggs, of RPC, said HMRC was under political pressure to increase tax revenues, and this had prompted the organisation’s new approach. “HMRC’s increasing aggression and intransigence mean that judicial reviews are becoming far too common and are all too often the result of simple errors by HMRC and a dogged refusal to correct them,” he said.
Source: The Daily Telegraph (25/07/2018)

Britain has highest tax burden in nearly 50 years
UK businesses and households are struggling under the highest tax burden for 49 years with tax now hitting 34.3% of GDP. Each household is paying £28,000 tax on average, pulling in a total £776bn for the Treasury. Chief executive of the TaxPayers' Alliance John O'Connell said: "The increase of taxation and the introduction of new taxes have hit poorer families the hardest, leaving them with less and less at the end of the month. The funding models for social care and the NHS need real reform, not ever higher taxes. Instead of taking even more money away from families and businesses, the Government should consider cutting taxes, or reducing spending in other areas.” A report from the campaign group warned against further rises and outlined how tax cuts had increased receipts for the Treasury.
Source: Daily Mail (23/07/2018)

MPs seek to level playing field between banks and businesses
The All Party Parliamentary Group for Fair Business Banking is calling for the creation of a specialist financial services tribunal to rule on disputes between banks and small businesses. Writing in the Times, APPG chair Kevin Hollinrake, says the group also wants to see the legal rights of small businesses enhanced by extending the so-called section "right of action" in the financial services and markets act to small businesses. Meanwhile, representatives of small businesses damaged or destroyed by the £1bn HBOS Reading fraud have met Andrew Bailey, chief executive of the Financial Conduct Authority, to share their concerns that a compensation scheme established by Lloyds Banking Group has failed to deliver a fair outcome.
Source: The Times
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