• Any penalties and interest, e.g. those that have arisen due to late payment, late returns or incorrect returns • Loan charge in form of notional payments under PAYE regulations • Excess payments under the CJRS that are paid to businesses in error – overpayments relating to the CJRS are therefore classed as non-preferential debts
Further details relating to how HMRC will implement this change are available within the policy paper, and the relevant contact details are also included.
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Late filing penalties for Interest Restriction Returns 8 December 2020
HMRC has advised that, although it does not have the discretion to provide any extension to the statutory filing deadline for an Interest Restriction Return (IRR), which is 12 months following the end of the period of account, no filing penalty will be applied in scenarios where the reporting company had a reasonable excuse for missing the deadline. The IRR must subsequently be filed within an acceptable time after the reasonable excuse ends. HMRC has received queries relating to how it will interpret reasonable excuses where the filing deadline for an IRR is the same as that for company tax returns, and companies within the CIR group have requested deferrals to CT late filing penalties. An IRR can be filed using estimated figures, meaning that reporting companies should proceed with filing the IRR on time, if possible. To reduce the administrative burden on groups, HMRC will accept that where most companies within a CIR group have obtained a deferral to late filing penalties for their company tax returns, if the IRR is filed by the same agreed date, there is a reasonable excuse for the late filing. Where a reporting company cannot meet the IRR filing deadline, they should liaise with their Customer Compliance Manager (CCM) if they have one. Where the group does not have a CCM, and they believe they have a reasonable excuse for late filing of the IRR, they should include this information when they file the IRR. HMRC can then consider this prior to any late filing penalty being issued, which will reduce the administrative burden for both parties. When considering if there is a reasonable excuse for late filing of the IRR, HMRC has access to all of the relevant facts and circumstances.
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Tax avoidance: don’t get caught out – educational campaign from HMRC 11 December 2020
As recently published on CIPP’s News Online page, HMRC is running a ‘Tax avoidance: don’t get caught out’ educational campaign. This is aimed at contractors who are either self-employed or employed through an agency, and its aim is to advise them of how to identify a tax avoidance scheme, what the risks are of taking up such a scheme, and what to do when presented with one.
What is a tax avoidance scheme?
In a tax avoidance scheme, tax rules will be bended in an attempt to gain a tax advantage that was never intended.
It ordinarily involves contrived transactions that have no genuine purpose other than to artificially reduce the amount of tax that an individual is required to pay. It is not the same as effective tax planning but is often promoted in this way.
Tax avoidance does not pay, as the majority of schemes do not work. Anyone who utilises them ends up having to pay all the tax legally due, in addition to interest and potentially penalties as well. This is on top of fees paid to the person or business operating the tax avoidance scheme, so the end result is that they often find themselves paying more than they tried to avoid in the first place.
The Chartered Institute of Payroll Professionals
Payroll: need to know
cipp.org.uk
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