Mayday penalties from HMRC
Thank you for taking the time to grab a cuppa, and to take a few minutes out of your busy day to find out what is happening at Tax Matters and in the world of tax generally.
I'm pleased to say that the tax team will shortly be welcoming a new team member on board, and I will be introducing them to you in the next few weeks. As you can imagine this is a very exciting time for me as I have been hoping to grow the team for some time, unfortunately, qualified tax professionals are few and far between (if you are ATT or CTA STEP qualified) then drop me a line I am already thinking about expansion later in the year.
In this week’s edition find out why the 1st of May is so important for some, what happened to an ex-England footballer when he didn’t pay his taxes and why it's been a record year for HMRC.
Mayday Mayday
Don’t worry this is not a distress call from a sinking ship, although it may be a cry for help from a worried taxpayer who has not yet filed their 2023 self-assessment tax return. The 2023 tax returns were due as of 31st January 2023 and for those not received, a penalty of £100 was raised. HMRC estimated that 1.1 million tax returns were unsubmitted as of 1st February.
So why Mayday? On the 1st of Ma,y a new late penalty regime comes into force, a penalty of £10 a day will be charged for the next 90 days, potentially resulting in an additional penalty of £900, combined with the earlier penalty, non-filers could be looking at an overall penalty of £1,000.00.
My advice would be to take immediate action and submit that tax return as swiftly as possible to reduce the daily penalty as much as possible. If you require any assistance, then please do not hesitate to contact me.
I must be doing something right, if you have a YouTube channel you probably know that the early days are difficult and getting any views can be quite difficult, and although I am not disappointed so far (early days) I was taken back slightly when I checked the other day to see that my capital gains video had hit over a hundred views in the first few days.
This has spurred me on to upload some videos throughout the week, in the meantime why not take a look at this and some of my other videos, LIKES COMMENTS or SUBSCRIPTIONS are very much appreciated.
From Fame to Shame
Former England and Liverpool footballer John Barnes has faced a ban as a company director following revelations that his company, John Barnes Media Limited, failed to settle substantial amounts in tax. Investigations by the Insolvency Service uncovered that between 2018 and 2020, Barnes' company neglected to pay over £190,000 in both corporation tax and VAT, with HM Revenue and Customs being its sole known creditor upon liquidation in 2023.
Barnes, has voluntarily accepted a disqualification undertaking, prohibiting him from serving as a company director for the next three-and-a-half years.
Mike Smith, Chief Investigator at the Insolvency Service, emphasised the significant impact of tax evasion on essential public services such as schools, hospitals, and infrastructure. Barnes, despite earning well over £400,000 in revenue between November 2018 and October 2020, failed to fulfill his legal obligation to ensure proper tax payments were made, resulting in no tax contributions during that period.
This disqualification serves as a warning to other directors, highlighting the consequences of neglecting tax responsibilities while directing funds elsewhere.
John Barnes Media Limited, established by Barnes in September 2012, provided media representation services during its operation. Despite generating a turnover of £441,798 between November 2018 and October 2020, the company failed to remit any payments to HM Revenue and Customs, despite filing returns indicating VAT obligations.
Insolvency Service investigations revealed a failure to pay £78,839 in corporation tax from August 2018 to January 2020, alongside an unpaid VAT amount of £115,272 between February 2019 and 2020.
The Secretary of State for Business and Trade accepted Barnes' disqualification undertaking, effective April 24, preventing him from engaging in the promotion, formation, or management of a company without court approval.
On the up
In the latest financial period, HMRC has seen unprecedented success, collecting £827.7 billion in tax—a remarkable 5% increase from the previous period. However, alongside this achievement, the prevalence of stealth taxes is becoming more apparent.
These stealth taxes encompass various personal taxes, including income tax, national insurance contributions (NICs), capital gains tax (CGT), and inheritance tax (IHT). Monthly tax receipt releases indicate a substantial contribution of £361 billion to the Treasury across these income streams for the year ending March 2024, marking another record-breaking figure, exceeding the previous year by almost £20 billion—a notable 5.8% surge.
For further details of tax receipts then please look at the official statement from HMRC
I hope you have enjoyed this edition of my newsletter, and found it both enjoyable and informative, if you have any suggestions or comments then please let me know it is always good to hear from you. In addition to the newsletter, I am also updating the website, so please take a look from time to time to see what is happening.
If I or the Tax Matters team can be of any assistance to you, your family or your friends then please do not hesitate to contact me at 01442 828006 or jreeves@taxmatters.tax