Tag Archives: Tax

Taxpayers may have a ‘get out clause’

HMRC may have exceeded time limit

Over the weekend, it was announced that about 6 million people have paid the incorrect amount of tax. Under the Pay As You Earn (PAYE) system, about £2bn was underpaid and £1.8bn was overpaid to HMRC.

Letters to taxpayers have begun to arrive today stating that they have paid the wrong amount of tax. However, taxpayers could find a way to not pay the underpaid tax. Under new tax rules, HMRC must issue demands for underpaid tax within 12 months of the end of the tax year in which it became aware that people had underpaid. This shows that incorrect tax due for the tax year ending in April 2009 may not be claim worthy due to exceeding the time limit. This could be a hurdle for HMRC and may need to be crossed if they are to receive their tax revenues.

                                                       

I feel that the tax system needs to be cleaned up and kept up to date sooner rather than later, because if these incorrect tax revenues are not settled it could cause problems for using the planned revenues for the current coalition government. The tax codes and amounts of tax need to be corrected to ensure this type of problem does not occur again. Tax payers need to ensure they are issued the correct tax codes and check their pay slips to ensure their employer and themselves are paying the correct amount of income tax every week/month. This will help keep them up to date and ensure they are not over or underpaying their tax.

Below is the article regarding this story:

HMRC may have missed time limit on tax bills

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Bankers face more taxes

Financial Activity Tax comes to Banks

Just weeks after George Osborne’s budget, where it looked good for banks, a new financial activity tax is to be implemented. This new tax is expected to raise £2.5bn and will be implemented upon bank’s profits and pay. On June 22nd 2010, the Chancellor outlined in the budget that the banks would benefit from taxes; however this news comes to a surprise and shows that it could raise more money to help reduce the deficit.

           

I feel the banks should face more scrutiny in the future, but this second levy shows that Mr Osborne is trying to lead the way in banker’s tax. As mentioned in the article, the Chancellor is hoping other countries follow suit in introducing such a bank tax. I know that banks need to pay the penalty for the current global financial crisis, but I feel this bank levy will not work and raise enough finances to help reduce the deficit. I feel Mr Osborne’s budget was unclear and does not show any transparency, which is currently needed by banks.

The link to the Guardian article is shown below:

Bankers warned of further tax on profits and pay

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Football Agents targeted by the Taxman

HMRC aims to clamp down on Agents

With the football transfer window closing today at 5pm GMT, English football clubs have been trying to do their last bit of transfer business of the January transfer window. With many football clubs making last minute buys, the only winners of the past have been the football agents.

On Thursday 28th January 2010, Her Majesty’s Revenue and Customs (HMRC), or the taxman to me and you, aimed to tackle the football agents in the tax paid on their fees. According to a report for the Barclays Premier League, clubs spent £70.7m on agents’ fees last season in 803 transactions. This large amount that football agents earn is a staggering amount, when in some cases; little ‘work’ is actually done on each transfer.

I think that the HMRC are right to clamp down on the fees that football agents earn. The 40% income tax rate paid by football agents is sufficient but, the taxman needs to clamp down on offshore payments. Tax havens can be very popular for football agents, leading to them not paying any UK tax. Therefore, the HMRC are right to target football agents’ income by investigating their earnings in more detail. 

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Gordon Brown losing Tobin tax argument

Another tax to repay the government’s losses reaching dead-end

Last weekend the G20 finance ministers met to discuss the global economic climate. Gordon Brown, the Prime Minister, proposed a new tax called Tobin Tax (or to me and you,’ Financial Transaction Tax’). It appears that the PM is losing is battle to create this tax and losing his battle to remain Prime Minister.

I believe that a new tax is not needed and not a feasible way to repay the debt that has burdened the government’s balance sheet. I feel this tax will not prevail and agree with the other G20 countries. In the article (which is linked below) it states that the PM has backing from a fund manager and states that the banks cannot assume trust to resume without significant change. However, I believe that the significant change cannot come in the form of Financial Transaction Tax. I think there are other forms of revenue for the government and Tobin Tax is not one of them.

Below is the link to the Accountancy Age article:

http://www.accountancyage.com/accountancyage/news/2252747/brown-losing-tobin-tax-argument

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