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What has changed since the Budget?

  • For those born after 5 April 1948 the personal tax allowance is £10,000. It was also announced that from 6 April 2015 this would increase to £10,500.
  • The much publicised change to the taxation of salaried members of Limited Liability Partnerships is confirmed. Ongoing vigilance is required to ensure that salaried members’ tax status does not change from self-employed to PAYE by default.
  • All partnerships will be affected by new rules that will allow HMRC, in certain circumstances, to reverse profit or loss sharing between partners if one or more of the partners is a “non-individual” – for example a limited company.
  • From April 2014 employers can claim the new £2,000 Employment Allowance that can be used to set off against their employers’ secondary National Insurance Contributions.
  • From 27 March 2014 and ongoing throughout the 2014-15 tax year, a number of relaxations are being introduced to make the withdrawal of benefits from pension funds more flexible. Any person who is eligible to draw from their pension funds should now take advice as a matter of urgency to determine their best course of action.
  • The Annual Investment Allowance is increased from 6 April 2014 (1 April if a company) to £500,000 (previously £250,000). The new ceiling will apply until 31 December 2015 when the limit could reduce to £25,000. Careful planning is required as, clearly, this measure is intended to encourage businesses to bring forward capital investment during this generous tax relief window. Again planning is required as transitional measures may reduce your entitlement to relief if your business year end date straddles the 6 April 2014 (1 April if a company).
  • Loans provided by an employer to an employee, that are interest free or low cost, did not generate taxable benefits if they were below £5,000. From April 2014 this limit is increased to £10,000.
  • Child care support is increased to 20% of costs capped at a maximum total cost per child of £10,000. All age groups will be brought into this scheme by autumn 2015.
  • From 6 April 2014 the Private Residence Relief final period exemption for Capital Gains Tax purposes is reduced to 18 months, previously it was three years.

What has not changed since the Budget?


  • Entrepreneurs’ Relief 

As long as the ownership of your business is structured correctly, and for a minimum time period, then lifetime disposals not exceeding £10m will only be taxed at 10% for Capital Gains Tax purposes.


  • Cap on tax reliefs 

Don’t forget that certain tax reliefs are capped at £50,000 or 25% of your income. The reliefs affected are predominantly tax losses. There is no cap on charitable donations.


  • Loss of personal allowance 

Care should be taken if your taxable income is likely to exceed £100,000 in the current tax year. For every £2 your income exceeds £100,000 your Personal Allowance (PA) will be reduced by £1. For 2014-15, this means that your PA will be withdrawn completely if your income exceeds £120,000.


  • Carry back charitable donations 

It is possible to carry back charitable donations made in the tax year 2014-15 to the previous year, 2013-14. The claim to carry back must be made before or at the same time as you complete your tax return for the earlier year. The latest date you can make a claim is the statutory filing deadline. For the 2013-14 return this is 31 October 2014 if you file a paper return, or 31 January 2015 if you file your return electronically.


  • Inheritance Tax (IHT) lifetime gifts

It is still possible to make lifetime gifts of any amount to an individual as long as there are no strings attached. The amount of the gift that will be included in your estate for IHT purposes may gradually reduce over time. If you live for more than seven years after the gift was made, then it will be excluded completely from IHT. If the gift becomes taxable on your death, then any tax payable on it is reduced if you survive it by at least 3 years.


These are just a few of the existing planning matters that you could or should consider. However, everyone’s circumstances are different and if your financial affairs are complex you should consider a formal tax planning consultation, which we would be delighted to undertake for you.

HMRC is changing the way they charge interest on late paid PAYE

Employers should note that HMRC is changing the way they charge interest on unpaid PAYE from 6 April 2014. We have reproduced below HMRC’s recent Helpsheet:

 For the tax year 2014-15 onwards:

 HMRC will charge in-year, rather than annual, interest on all unpaid:

  • PAYE tax and Class 1 National Insurance, including specified charges (estimates HMRC makes in the absence of a PAYE submission)
  • Construction Industry Scheme charges
  • In-year late filing penalties, which start from October 2014
  • In-year late payment penalties, which will be charged automatically from April 2015

HMRC may also charge interest on underpayments that arise because of adjustments reported on Earlier Year Updates submitted in respect of tax year 2014-15 onwards.

For annual payments such as Class 1A and Class 1B National Insurance Contributions (NICs), HMRC will continue to charge interest on any amount which remains unpaid after the due date.

 Will HMRC also pay interest on overpayments in-year?

Yes. HMRC will apply repayment interest where an employer makes a payment and the charge is then reduced, and this results in an overpayment which is:

  • reallocated to a later charge
  • repaid

 How will interest be calculated?

 HMRC will charge interest from the date a payment is due and payable to the date it is paid in full.

 For 2013-14 HMRC will charge interest on any amount outstanding for month 12 starting from 19/22 April 2014. Interest will only be charged on any month 12 late payment amounts and not all outstanding late payment amounts for 2013-14.

 For 2014-15 HMRC will charge in-year interest each month on any late payment, starting from 19 May 2014.

Tax Diary April/May 2014


  • 1 April 2014 – Due date for Corporation Tax due for the year ended 30 June 2013. 
  • 19 April 2014 – PAYE and NIC deductions due for month ended 5 April 2014. (If you pay your tax electronically the due date is 22 April 2014.)
  • 19 April 2014 – Filing deadline for the CIS300 monthly return for the month ended 5 April 2014. 
  • 19 April 2014 – CIS tax deducted for the month ended 5 April 2014 is payable by today.
  • 19 May 2014 – PAYE and NIC deductions due for month ended 5 May 2014. (If you pay your tax electronically the due date is 22 May 2014)
  • 19 May 2014 – Filing deadline for the CIS300 monthly return for the month ended 5 May 2014.
  • 19 May 2014 – CIS tax deducted for the month ended 5 May 2014 is payable by today.
  • 19 May 2014 – The payroll forms P35 and P14s must be filed by this date – employers late in filing these forms may receive a penalty.
  • 31 May 2014 – Ensure all employees have been given their P60s for the 2013-14 tax year.

Budget highlights

We have reproduced two of the more surprising changes announced in the Budget notes published immediately following George Osborne’s presentation last week.

  1. HMRC to be given powers to raid bank accounts:

 “The government will modernise and strengthen HMRC’s debt collection powers to recover financial assets from the bank accounts of debtors who owe over £1,000 of tax or tax credit debts, have the financial means to pay, and have been contacted multiple times by HMRC to pay. A minimum of £5,000 will be left across debtors’ accounts. This brings the UK in line with many other tax authorities which already have the power to recover debts directly from an individual’s account, such as France and the US.”

 We hope that this does not include rights to recover unpaid tax on estimated assessments!

  1. A number of relaxations were announced that are intended to give tax-payers more control over their “pension pots”.
  • Increased Pension Flexibility – The government will legislate to allow those with a defined contribution pension to draw down after age 55- from April 2015, subject to their marginal rate of income tax.
  • Financial guidance – The government will ensure that, from April 2015, all individuals with defined contribution pension pots are offered free and impartial face-to-face guidance at the point of retirement and will make available up to £20 million in the next 2 years to develop this initiative.
  • Capped drawdown – From 27 March 2014, the government will allow people with defined contribution pension wealth more flexibility to access their savings by increasing the capped drawdown limit to 150% of an equivalent annuity.
  • Minimum income requirement change – From 27 March 2014, the government will allow people with defined contribution pension wealth more flexibility to access their savings by reducing the minimum income requirement for accessing flexible drawdown to £12,000, subject to their pension scheme rules.
  • Small pension pots – From 27 March 2014, the government will increase the amount for small individual pension pots that can be taken as a lump sum regardless of total pension wealth from £2,000 to £10,000.
  • Increase the number of small pots that can be taken as lump sums – The government will increase the number of small pension pots that can be taken as lump sums from 2 to 3.
  • Trivial commutation (small pension wealth) – From 27 March 2014, the government will allow people with defined contribution pension wealth more flexibility to access their savings by increasing the total pension wealth that people can have before they are no longer entitled to receive lump sums under trivial commutation rules to £30,000.

Clearly, these amount to significant changes in the way in which we can access our pension savings at retirement. Readers who are approaching pensionable age should consider their options carefully, and should certainly seek tax advice.

Budget Statement 19 March 2014

Personal Tax, Stamp Duty Land Tax and miscellaneous matters


 Personal Tax allowance

 The personal allowance for those born after 5 April 1948 will be:

  • For 2014-15 – £10,000
  • For 2015-16 – £10,500

 Income Tax rate bands

There was significant press commentary prior to the Budget announcements lobbying for an increase in the threshold at which tax payers are liable to the 40% Income Tax rate. The declared higher rate thresholds are:

  • For 2014-15 – £41,865
  • For 2015-16 – £42,385

If your income before allowances exceeds these amounts you will be paying 40% Income Tax on the excess (this assumes that you are only entitled to the basic personal allowance).

The threshold at which the 45% rate starts is unchanged at £150,000.

There were no changes to the basic Income Tax rate (20%), the higher rate (40%) and the additional rate (45%).

Transfer between spouses

As previously disclosed, from April 2015, a spouse or civil partner will be able to transfer part of their Personal Tax allowance. This inter-spouse transfer will only be allowed if both spouses/partners do not pay tax at the higher rates of income tax. Any transfer of allowance will, therefore, only benefit the receiving person at the basic rate of tax. Originally, the amount that could be transferred was to be limited at £1,000. In the Budget announcements this was increased to £1,050.

Tax-free childcare

The Budget 2014 confirms that the Tax-free childcare costs cap, against which parents can claim 20% support, will be increased to £10,000 per year for each child. This will mean that eligible parents can now benefit from greater support, worth up to £2,000 per child each year. At the same time the Government is rolling out Tax-free childcare more quickly than previously announced. From autumn 2015, the scheme will be rolled out to all eligible families with children under 12 within the first year of the scheme’s operation.

 Failed avoidance schemes

HMRC is to be given the power to give notice to taxpayers who have used avoidance schemes, and which are defeated in another party's litigation, that they should amend their returns or settle their disputes with HMRC accordingly. Taxpayers who decide not to settle their case will risk a penalty. This change will have effect from Royal Assent to Finance Bill 2014.

In a further twist, legislation will be introduced in Finance Bill 2014 to extend accelerated payment of tax to users of schemes disclosed under the Disclosure of Tax Avoidance Schemes (DOTAS) rules, and to taxpayers involved in schemes subject to counteraction under the General Anti-Abuse Rule (GAAR), so that the amount in dispute is held by HMRC while the dispute is resolved. Again, these changes will take effect from Royal Assent to Finance Bill 2014.

Debt recovery powers

The Government intends to modernise and strengthen HMRC’s debt collection powers to recover financial assets from the bank accounts of taxpayers who owe more than £1,000 of tax or tax credit debts, have the financial means to pay, and have been contacted multiple times by HMRC to pay.

 A minimum of £5,000 will be left in taxpayers’ bank accounts.

This brings the UK in line with many other tax authorities which already have the power to recover debts directly from an individual’s bank account, such as France and the US.

Stamp Duty Land Tax (SDLT) change

At present acquisitions of residential property, costing more than £2m, by certain “non-natural” persons are subject to an SDLT charge of 15% – these are transactions using so-called “corporate envelopes”.

The £2m threshold is being reduced to £500,000 for transactions where the effective date is on or after 20 March 2014. The present limit will continue to apply, subject to certain exceptions, where contracts were entered into before that date.

 Annual Tax on Enveloped Dwellings (ATED)

At present ATED applies to acquisitions of residential property using “corporate envelope” arrangements and with a cost exceeding £2m. Changes to the scope of this tax are to be proposed in the Finance Bill 2014. The changes are:

  • From 1 April 2015 a new band will be introduced to include properties with a cost exceeding £1m but not more than £2m. The ATED in this band will be £7,000.
  • From 1 April 2016 a further band will be introduced to include properties with a cost exceeding £500,000 but not more than £1m. The ATED in this band will be £3,500.

 Accordingly, from 1 April 2016, all affected properties with a cost exceeding £500,000 will be brought into this tax.

 Help to Buy scheme extended

The Help to Buy: Equity Loan Scheme is expected to help at least 74,000 households buy a new-build home by March 2016. To help a further 120,000 households purchase a home and to continue to support house building as the market improves, the Government will extend the equity loan scheme to March 2020.

The Help to Buy: Mortgage Guarantee Scheme will continue to support access to high loan to value mortgages until the scheme ends on 31 December 2016.

 Right to Build scheme

For people who want to build their own home, the Government will consult on creating a new ‘Right to Build’, giving custom builders a right to a plot from councils, and a £150 million repayable fund to help provide up to 10,000 serviced plots for custom build.

The Government will also look to make the Help to Buy: Equity Loan Scheme available for custom build projects.

Tobacco duty

Duties will increase by 2% above the rate of inflation from 6pm, 19 March 2014. This will add:


  • 24p to the price of 20 cigarettes,
  • 8p to the price of a pack of five small cigars,
  • 23p to the price of a 25g pouch of hand-rolling tobacco, and
  • 13p to the price of a 25g pouch of pipe tobacco.

 Alcohol duty

 The rates of beer duty will be reduced by the following amounts from 24 March 2014:

  • 6% for low strength beer (less than 2.8% alcohol by volume (abv));
  • 2% for the standard rate of beer duty (between 2.8% and 7.5% abv); and
  • 0.75% overall for high strength beer (above 7.5% abv).

 These changes will reduce the price of a typical pint (at each strength) by 1p.

The legislation will increase the duty rates for wine and made wine and sparkling cider of a strength exceeding 5.5% by the rate of inflation (based on RPI). This will add 8p to the price of higher strength sparkling cider and 6p to the price of a bottle of wine.

 Bingo duty

 The rate of Bingo duty is to be reduced from 20% to 10%. The rate reduction will have effect for Bingo duty accounting periods beginning on or after 30 June 2014.


 Business Tax


 UK Export Finance

 In an effort to support businesses expanding into export markets UK Export Finance’s (UKEF) lending capacity is to be doubled from £1.5bn to £3bn. The Chancellor also announced that the interest rates applied to this lending will be reduced by one third.

 Annual Investment Allowance (AIA)

In response to lobbying by numerous employer and business organisations, the Chancellor has agreed to extend the temporary increase in the AIA from 31 December 2014 to 31 December 2015.

 In a welcome move he has also doubled the amount that can be invested in qualifying assets from £250,000 to £500,000. The increase will apply from 6 April 2014 for unincorporated businesses and 1 April 2014 for companies.


 It has been confirmed that the Finance Bill 2014 will include legislation to counter the abuse of three aspects of partnership taxation:

  1. The disguising of employment relationships, and consequential reduction in employment taxes, in relation to salaried members of Limited Liability Partnerships (LLPs).
  2. The tax-motivated allocation of business profits or losses in all partnerships where the partners include individuals and companies.
  3. The tax-motivated disposal of assets through partnerships.

 The changes will take effect from 6 April 2014.

 Certain minor amendments have been made to the previously published draft legislation, but the details will not be made available until the Finance Bill 2014 is published together with revised guidance.

 VAT registration thresholds

 The registration and deregistration thresholds will be changed as follows from 1 April 2014:

  • The taxable turnover threshold, which determines whether a person must be registered for VAT, will be increased from £79,000 to £81,000;
  • The taxable turnover threshold which determines whether a person may apply for deregistration will be increased from £77,000 to £79,000; and
  • The registration and deregistration threshold for relevant acquisitions from other EU Member States will also be increased from £79,000 to £81,000.

The simplified reporting requirement (three line accounts) for the Income Tax Self-Assessment return will continue to be aligned with the VAT registration threshold. From 2013-14, small businesses are able to use the simpler Income Tax cash basis that simplifies the way in which small businesses can calculate their trade profits. The eligibility conditions for the cash basis are linked to the VAT registration threshold in place at the end of the relevant tax year.

 Employee share schemes

As announced in the Autumn Statement 2013, legislation is to be included in the Finance Bill 2014 to increase the maximum value of shares that can be acquired under all-employee Share Incentive Plans (SIP). From 6 April 2014 the individual limits under SIP will be increased to:

  • £3,600 on the “free” shares companies can award to employees, and
  • £1,800 on the “partnership” shares employees can purchase.

The Government are also adopting a number of changes recommended by the Office of Tax Simplification to simplify the tax rules and administrative processes for employee share schemes.

 Fuel Benefit Charge and Van Benefit Charge

The multipliers that affect the amount of benefit in kind charges levied for private use of fuel in cars and vans, and private use of a van, will be increased in line with inflation for 2015-16. The increase will be based on the September 2014 RPI figure.

 Business Premises Renovation Allowance (BPRA)

As announced in the Autumn Statement 2013, legislation will be introduced in Finance Bill 2014 to clarify the scope of BPRA and ensure that it is limited to building and renovation works and associated services.

Following consultation, the legislation has been revised to extend the time in which the works must be carried out to 36 months, and the proposal to limit qualifying plant and machinery to integral features has been widened to cover additional listed items. In addition a rule will be introduced preventing claims to BPRA being made if another form of State Aid has or will be received.

 These changes will have effect from 6 April 2014 for Income Tax, and 1 April 2014 for Corporation Tax.

 R & D tax credit for loss makings SMEs

The rate of R&D payable credit for loss-making SMEs is being increased to 14.5% from 11% for qualifying expenditure incurred on or after 1 April 2014. This will increase the rate of the cash credit payable to SMEs that conduct R&D, but do not have Corporation Tax liabilities.

 Enterprise Zones: Enhanced Capital Allowances (ECAs)

 The period in which 100% ECAs are available in Enterprise Zones is to be increased by three years until 31 March 2020.

 Theatre Tax Relief

 The Government is to consult on the creation of a new tax relief for theatrical productions and touring theatrical productions.


Savers and investors


Three significant changes were announced in the Budget to support savings and previously announced changes were confirmed:

 0% Income Tax band

From 6 April 2015 the maximum amount of an investor’s savings that can qualify for the starting rate of tax for savings will be increased to £5,000 (the limit set for 2014-15 is £2,880). In a surprising announcement the Chancellor also advised that the starting rate of Income Tax is to be reduced from 10% to 0%.

 This will be a welcome change for individuals who rely on savings income to make up their disposable income.

 Pensions flexibility

 Legislation will be included in the Finance Bill 2014 that will make the following changes, all effective from 27 March 2014:

  • reduce the minimum income requirement for accessing flexible drawdown to £12,000;
  • increase the capped drawdown limit to 150% of an equivalent annuity;
  • increase the total pension wealth that people can have before they are no longer entitled to receive lump sums under trivial commutation rules to £30,000;
  • increase the small pots limit, raising the size of a pension pot that can be taken as a lump sum regardless of total pension wealth, to £10,000;
  • increase the number of pension pots of below £10,000 that can be taken as a lump sum from two to three.

 Access to defined contribution pension savings

From April 2015, the Government will change the tax rules to allow people to access their defined contribution pension savings as they wish from the point of retirement.

Drawdown of pension income under the new, more flexible, arrangements will be taxed at marginal Income Tax rates rather than the current rate of 55% for full withdrawals. The tax-free pension lump sum will continue to be available. Those who continue to want the security of an annuity will be able to purchase one. Equally, those who want greater control over their finances in the short term will be able to extract all their pension savings in a lump sum.

 Those who do not want to purchase an annuity or withdraw their money in one go will be able to keep their pension invested and access it over time.

  NISAs, ISAs, Junior ISAs and CTFs

 A New Individual Savings Account (NISA) is to be made available from 1 July 2014. They will incorporate a number of changes:

  • The annual subscription limit for cash and stocks and share ISAs will be equalised at £15,000.
  • Restrictions on the movement of funds between stocks and shares and cash accounts to be removed.
  • Certain rules that determine the types of securities and other investments that can be held in an ISA are to be changed.

 From the same date, 1 July 2014, the annual subscription limits for the Junior ISA and the Child Trust Fund (CTF) are to be increased to:

  • Junior ISA – £4,000
  • CTF – £4,000

 Pensioner savings bonds

National Savings and Investments (NS&I) will launch a choice of fixed-rate, market-leading savings bonds for people aged 65 or over, available from January 2015. These will provide certainty and a good return for those who have saved all their lives and now mostly rely on their savings for income. Interest on the bonds will be taxed in line with all other savings income, at the individual’s marginal rate, meaning that pensioners who do not pay savings tax will be eligible to receive the interest tax-free.

For the purposes of costing this measure, the central assumption made is that NS&I will launch a 1-year bond paying 2.8% gross/annual equivalent rate (AER) and a 3-year bond paying 4.0% gross/AER, with an investment limit of £10,000 per bond.

 Premium Bond changes

Premium Bonds are one of the oldest and best known savings products, held by over 21 million people. Changes have been announced to the amount that can be invested and the prize structure. The main changes are:

  • the cap on investments in Premium Bonds will be lifted for the first time since 2003, from £30,000 to £40,000, from 1 June 2014. It will then be lifted again to £50,000 in 2015-16.
  • NS&I will also now offer two £1 million prizes per month, rather than one, starting from the prize draw in August this year.

 These changes will increase savers’ chances of winning the largest prize and allow people who want to save more through Premium Bonds to do so.

Social Investment tax relief

As announced at Budget 2013, legislation will be introduced in Finance Bill 2014 to provide a range of Income Tax and Capital Gains Tax reliefs, to provide incentives for investment by individuals in qualifying social enterprises. Income Tax relief will be available at 30% of the amount invested.

 These changes will have effect from 6 April 2014.

HMRC to use Mr Bean film makers

In a bizarre attempt to create positive PR for HMRC, Channel 4 has been given unprecedented access to HM Revenue and Customs as they pursue tax evaders and collect unpaid tax.

Tiger Aspect Productions, the production company behind Mr Bean, will be filming HMRC staff as they target the so-called high risk sectors: the building trade, health sector, off-shore bank account holders and high net worth individuals.

 No doubt HMRC are keen to improve their public image. The production company and Channel 4 are keen to examine the role of our tax collectors as the, perhaps, “unsung heroes” who endeavour to provide the money that pays for our public services.

 Nick Mirsky, Channel 4’s Head of Documentaries, said:

 “Money from taxation funds everything we value most about society, yet the team who collect it have often been viewed with mistrust and suspicion. What is exciting about this commission is that it offers unique access to a group of public servants on whom we are more dependent than ever to help make the nation's books balance.”

Treasury hungry for ideas

George Osborne is delivering his Budget speech Wednesday of this week. It will be interesting to see if his plea for ideas to help smaller businesses has received a sympathetic ear. Here’s what a number of organisations have requested:

British Chambers of Commerce

The BCC have made three recommendations:

  1. A £100m scheme to pay businesses £1,000 if they hire long term unemployed young people or take on an apprentice.
  2. A two-year extension to the Apprenticeship Grant for Employers Scheme.
  3. Increasing the tax relief available to investors using the Enterprise Investment Scheme, from 30% to 50%, for investors in businesses run by the under 24s.

Forum of Private Business

The FPB has appealed for help to support firms with rising costs. In particular:

  1. A fundamental review of business rates.
  2. Phasing out VAT on the fuel duty element of the pump price.
  3. Measures to speed up the movement of cash between businesses to counter late payment.
  4. The introduction of an export guarantee scheme.

Federation of Small Businesses

The FSB has requested a number of support projects to help smaller businesses:

  1. Set the Minimum Wage rates for a five year period and change the rate changes to the beginning of the tax year (April) rather than October. This would assist firms with formulating longer term planning objectives.
  2. The Chancellor is urged to fund new support schemes through the Community Development Finance Institutions – providing a source of funding when access to bank finance is not available.

Confederation of British Industry

The CBI has recommended:

  1. Incentives to invest in energy generation.
  2. Extending the Annual Investment Allowance for small firms beyond 2015. The present 100% tax allowance is due to end 31 December 2015.
  3. Introduce a new capital allowance for structures and buildings.
  4. A freeze on Air Passenger Duty.

Institute of Directors

The IoD has promoted the idea that no-one should pay more than 50% of their income in taxation. Their contention is that all direct taxes – income tax, employees’ National Insurance, and council tax – should be capped at 50% of income.

It will be interesting to see if any of these proposals are included in the Budget…

Reducing tax evasion and avoidance

Just in case you have missed the news – that HMRC are stepping up their campaigns to stop tax avoidance and evasion – you may be interested to read the following quotes from HMRC and the Treasury: 


The difference between the revenues that in HM Revenue & Customs’ (HMRC) view should come in, and the total actually collected by HMRC, is known as the ‘tax gap’. Tax evasion and tax avoidance by businesses and individuals contribute to the tax gap, along with error, failure to take reasonable care, non-payment, legal interpretation, the hidden economy and criminal attacks on the tax system.

The tax gap in the 2010 to 2011 financial year was estimated to be £32 billion – 6.7% of the total tax that HMRC estimates was due – and tax evasion and avoidance together accounted for £9 billion of this.


We are working to prevent evasion and avoidance, detecting it early where it arises, and counteracting it effectively through investigation and legal challenge.

We are investing in HMRC to prevent tax avoidance and evasion. In 2010 the government allocated HMRC £917 million from efficiency savings to reinvest in generating additional compliance revenues of £7 billion a year by 2015.

Prosecuting more people who break the law

HMRC is taking swifter legal action against those who don’t come forward and sort out their taxes. We are also allocating more resources to increase the pace and number of tax evasion cases being brought before the criminal and civil courts.

We are setting up local task forces to identify and deal with tax cheats, using criminal and civil powers.

We are prosecuting more people who break the law by evading tax. We have recruited an additional 200 criminal investigators to increase the number of people prosecuted for tax evasion from 165 in 2010 to 2011, to 565 in 2012 to 2013, and to 1,165 in 2014 to 2015.

Using data and new technology

We are investing in our ability to use data and new and advanced technology to identify fraud and evasion risks. We have already brought in an extra £1.4 billion of tax revenue by investing £45 million in these activities.

We are improving HMRC’s CONNECT analytical computer system, so that the department is better able to identify areas of compliance risk. This will allow HMRC to act swiftly in identifying and investigating fraudulent behaviour.”

In summary

For professionals advising clients about opportunities to minimise their tax payments and tax payers who are keen to take this advice HMRC’s activities in this area are creating problems. In many cases it is necessary to interpret the Government’s intention when it formulated tax legislation in order to counter the accusation that a particular tax claim is “artificial” and should be withdrawn.


We live in interesting times…

Small Business Rates Relief

According to you can get small business rates relief if you only have one business property and its rateable value is under £12,000.

Here’s a summary of the relief on offer:

Current relief on offer:

Until 31 March 2015 you’ll get 100% relief (doubled from the usual rate of 50%) for properties with a rateable value of £6,000 or less. This means you won’t pay business rates on properties with a rateable value of £6,000 or less.

The rate of relief will gradually decrease from 100% to 0% for properties with a rateable value between £6,001 and £12,000.

What if you have other properties?

You could still get small business rate relief if the rateable value of each of your other properties is less than £2,600.

The rateable values of the properties are added together and the relief applied to the main property.

Larger businesses

If your property has a rateable value below £18,000 (£25,500 in Greater London) you’re considered a small business.

Even if you don’t qualify for small business rate relief, your business rates will be calculated using the small business multiplier instead of the standard one. This is the case even if you have multiple properties.

The multiplier shows the percentage (pence in the pound) of the rateable value that you pay in business rates. You can view a list of current multipliers on the Valuation Office Agency (VOA) website.

Contact your local council to apply for small business rate relief.