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Needless Niggles in Tax

A list of unnecessary rules/laws that need correcting

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The requirement to exclude class 2 NIC from payments on account calculations. Generally, if someone is making POAs, they'll be paying class 2 NIC the following year too.

An age-old one, but HMRC still not automatically linking up self-employment on a tax return with class 2 NIC being payable.
 

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By Paul Crowley
22nd Sep 2020 12:48

If Class 2 not shown then client needs to complete CWF 1

It is the client that is wrong, not the system

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Replying to Paul Crowley:
By SteveHa
22nd Sep 2020 13:00

Quote:
It is the client that is wrong, not the system

Hmmm. Remember all the noises being made about joined up Government that came to absolutely nothing?

Thanks (4)
Replying to Paul Crowley:
By Paul D Utherone
22nd Sep 2020 14:10

Paul Crowley wrote:

If Class 2 not shown then client needs to complete CWF 1

It is the client that is wrong, not the system


Possibly, but in a joined up, 21 century system, one would hope that if a tax return is submitted with Self Employment or Partnership income that would be recognised, rather than completely ignored
Thanks (2)
By CazzyT
22nd Sep 2020 13:42

and repaying a CIS client but not deducting the Class 2 .... because it isn't due until 31/01.

Clients receiving £000's back and then being asked to pay £150 a few weeks later

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Replying to Justin Bryant:
ALISK
By atleastisoundknowledgable...
22nd Sep 2020 19:15

Shocker.

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By Donald MacKenzie
25th Sep 2020 10:13

One big change that would help us all is getting rid of the 5th of the month cut off for PAYE and Self-assessment and going to calendar months.
Too easy to make a mistake and see, say, July CIS report as done but actually you have done the one to 5th July (basically June) and NOT done the July numbers.

Thanks (3)
Replying to Donald MacKenzie:
Character from Adam Sandler film "50 First Dates"
By 10sectom
25th Sep 2020 11:14

I am sure I read a few years ago that the tax year was going to change to 01-Apr to 31-Mar from the next year. It never happened of course. Did I dream this?

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Replying to 10sectom:
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By Tax Dragon
25th Sep 2020 11:49

Did you read it at the start of what would have been a new tax year on the changed system - 1st April?

Thanks (3)
By Paul D Utherone
25th Sep 2020 12:59

Not a rule or law, but the poorly worded & targeted "advice" letter that HMRC have apparently just sent to any taxpayer with POA due for 19-20 where there remained a balance outstanding on 1 Aug 2020.

The letter opens up with "...we didn't receive your payment by 31 July 2020..." and then asks for payment if it can be afforded, or gives advice as to revised due dates & penalties if not paid by then.

The problem? I checked two accounts this morning for clients who phoned / emailed in a panic as they had paid the POA on time.

The balances showing outstanding on their account? 30p for one, and 1p for the other. FFS!!!

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By John Isabel
25th Sep 2020 13:04

'High Income' Child Benefit Charge

1) whilst £50k isnt exaclt 'low income' it isnt all that 'high' either. Time for an uplift. £80k would be sensible
2) Should be on total family/household income. Why can some families earn 2 x £49,950 and get full CHB whereas others earn £60,000 (f/t) + £10,000 (p/t) and have to pay it all back.
3) I have one client who asked me if Child/Spousal maintenance was deducted from the income test (it isnt, obviously). He was quite miffed that he earns c£65k and has two kids with his new wife and gets no CHB wheras his ex wife gets full CHB for the kids they had together. I thought this was sour grapes until he told me he pays £nearly £800 per month to his ex wife and she works part time. As a result, of her income, tax credits , CHB and maintenance she actually has more net income than he does (after you take the £800 off that he pays her). The guy is a bit tiresome and i wouldnt normally feel too sorry for him but in this case i kind of do.

Thanks (1)
Replying to John Isabel:
paddle steamer
By DJKL
25th Sep 2020 13:22

Totally agree with 2, whilst it never impacted us re Child Benefit (our kids are getting on, one 26 the other 29 in a few weeks) I have certainly been a victim of finding it unfair that a couple earning £45k/£45k ended up with far more after tax income than the imbalanced £75k/£15k couple.

Bring back joint taxation of H & W (with a double basic rate band).

Also the skewed planning that arises, extra cash should go to my pension contributions rather than AVCs re my other half so they get 40% relief, why all Gift Aid payments go out in my name (Just got the form for the local RC Church my wife attends, I am on paper Church of Scotland yet I will do the GA), it is just all the nonsense, hoop jumping , messing about with who owns what.

Back when our bank accounts paid us interest and we had decent balances in same we even had all the deposit accounts in my wife's name, non ISA shares are still with her. There is even the retirement planning ensuring once I retire we escape HR tax, that involves monitoring pensions etc (At least whilst my wife's is a DB scheme mine , as a SIPP, is very flexible)

The whole thing is sheer madness, what is mine is hers and vice versa , yet without allocation planning we will end up worse off.(And at least I sort of know what I am doing with all this, for those with no financial background the whole thing can be very unfair)

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Replying to DJKL:
By SteveHa
25th Sep 2020 14:47

DJKL wrote:

The whole thing is sheer madness, what is mine is hers ...

Weirdly, my SO ends there. Perhaps it's a Welsh woman thing?

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Replying to SteveHa:
paddle steamer
By DJKL
25th Sep 2020 15:06

It was all my wordly goods I thee endow that was my downfall, well that and the fact that she likes clothes/hats/shoes and jewels and I am not fussed about any of these things (Though I do covet quality power tools , vinyl and a quality turntable and a better amp (happy with the speakers I already have) )

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Morph
By kevinringer
25th Sep 2020 13:16

1. Change tax year to 31 March and all tax months to end of calendar month.
2. Give agents access to the PTA and BTA.
3. Scrap the construction industry reverse charge before it starts.
4. Scrap MTD.

Thanks (3)
Replying to kevinringer:
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By John Isabel
25th Sep 2020 13:19

I'm hesitant to suggest (partly due to my own workflow) but perhaps even bring in mandatory 31 March financial year ends.

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Replying to John Isabel:
paddle steamer
By DJKL
25th Sep 2020 13:26

Feb/March are not great golf months, you need to change to say an August tax year end, ten months to file with July/August now with no work except pre year end tax planning.

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Replying to John Isabel:
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By Paul Crowley
25th Sep 2020 14:08

Been doing that for years for new commencement clients.
Wasted loads of time trying to get others in line, but overlap and 'I've been doing this for x years' a problem that is difficult to resolve.

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Replying to Paul Crowley:
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By John Isabel
25th Sep 2020 14:20

To be fair many of my clients have industry-specific year ends. My schools wouldn't like it - they tend to go for a year end that coincides with the end of term six, etc. My football clubs almost all have a year end of 31 May.

It isn't so bad for corporates, especially since CT rates have been relatively constant for a while.

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By Nebs
25th Sep 2020 14:30

Just two things we need rid of, clients and HMRC. Without those two this would be a great profession in which to work.

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Replying to Nebs:
Morph
By kevinringer
25th Sep 2020 14:47

I see the light

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