Avoid misery of penalties
DAVID NICOLSON, tax manager at Ensors Chartered Accountants, warns of similarities between tax regulations and the ‘beautiful game’
AS WE all shut the blinds, open the beer and take the phone off the hook, ready to watch England in the World Cup (well, for at least three games, anyway), it occurred to me there are several similarities between “the beautiful game” and the tax system.
nPenalties – A new regime for penalties was introduced for inaccuracies in returns or other documents, where the due date for filing with HM Revenue & Customs (HMRC) was on or after April 1, 2009.
Penalties can be charged where the inaccuracy results in an underpayment or over-reclaim of tax. The penalty amount charged depends on the seriousness of the inaccuracy; i.e. whether careless or deliberate.
If the disclosure of the inaccuracy is made voluntarily by you, and is thus “unprompted”, the penalty will be lower than if HMRC discovers it. HMRC will give further reductions for helping to quantify any underpayment, and has acknowledged that not all inaccuracies will lead to a penalty, as they will be determined on a case by case basis,
The message is simple – ensure your tax affairs are in order, so you don’t “fall foul” of the penalty regime!
n Transfer Deadline – It is anticipated that, with a new Government in place that needs to reduce the national debt, the tax system will be subject to a dramatic overhaul, so ensuring that annual allowances and tax breaks (e.g. ISAs and pensions) are fully utilised should always be a winner.
- 1 WATCH: 'Unplayable' delivery from Suffolk bowler goes viral
- 2 New landlord hopes to make Suffolk pub 'centre' of village community
- 3 Seven players who could leave Ipswich Town this summer
- 4 Is this tearoom near Ipswich one of Suffolk’s best-kept secrets?
- 5 A14 westbound reopens after crash caused 7 miles of delays
- 6 Conveyor belt which carried pig carcases across Suffolk A-road is demolished
- 7 Mercedes and Vauxhall flip over after crash in busy Ipswich road
- 8 Boy, 10, asked to get in car by two men near Sudbury
- 9 Boss McKenna on Town's 'challenging and important' pre-season schedule
- 10 Queen's Platinum Jubilee Flypast to pass over Suffolk
If such investments are appropriate to your circumstances, beating the annual deadline can pay just rewards.
n Referee – Unfortunately for the majority of personal tax matters, we do not have a “live” referee watching us as we play the game. The referee looks at the tax return after it has been filed, and decides in retrospect whether a penalty can be charged.
Such are the workings of the Self Assessment tax system. The onus is very much on the individual to “get it right” first time, and ensure proper disclosures are made to fully protect your position.
n Which Country Can I Play For? – The issue of where an individual is considered resident for tax purposes has made the headlines recently. For people with financial interests in both the UK and abroad, and who believe themselves to be not resident in the UK for tax purposes, there are major issues to consider. A wrong decision could result in significant additional tax liabilities.
And, of course, if you need a coach, the Ensors Tax Team will be pleased to help. For your nearest office visit www.ensors.co.uk
This information is given by way of general guidance only, and no action should be taken solely on the basis of the information contained herein. No liability is accepted by the firm for any actions taken without seeking appropriate professional advice.