According to an Intuit QuickBooks survey UK small business owners spent an average of 86 minutes checking their VAT returns for HMRC. Over half (51%) made mistakes and only 27% feel confident their return is correct.

Tax News - https://mailchi.mp/523a4012199d/tax-news

New VAT Accounting Procedures for Builders from 1 October 2019:
HMRC’s new domestic reverse charge for construction services comes into force on 1 October 2019. HMRC has recently finalised its legislation and published further guidance on this new regime, which will require the recipient rather than the supplier to account for the VAT due on certain construction services.

Contact us for further information.

Tax gap remains low

HMRC has published a report showing that the UK tax gap in 2017/18 is estimated to be £35 billion. This is 5.6% of total theoretical tax liabilities, and a small increase of 0.1% from 5.5% in 2016/17. HMRC therefore secured 94.4% of all tax due.

The tax gap is the difference between the amount of tax that should be paid to HMRC compared to what is actually paid. Further details in the report show:

The overall tax gap has fallen from 7.2% since 2005/06.

The duty-only excise tax gap has reduced from 8.4 % in 2005/06 to 5.1% in 2017/18.
the corporation tax gap has reduced from 12.5% in 2005/06 to 8.1% in 2017/18.

The report advises that the majority of taxpayers want to get their tax right, but many are still finding this hard, with avoidable mistakes costing the Exchequer over £9.9 billion a year. HMRC advise that £3 billion of this is attributable to VAT alone.

With the introduction of Making Tax Digital (MTD) for VAT, HMRC anticipates that the tax lost due to avoidable errors will be reduced because of the improved accuracy that digital records provide.

UK Investment Support Directory

International investors who wish to set up and expand their operations in the UK can now benefit from an online tool launched by the Department for International Trade (DIT).

The new tool, termed the UK Investment Support Directory, enables international investors to connect with a range of businesses across the UK. Potential investors can find an expert in their specific industry or region.

According to the DIT, the UK Investment Support Directory has been created to make information about the investment process 'more accessible', and is part of a wider initiative to 'generate more foreign direct investment in the UK'.

Payment on account confusion

Under self assessment taxpayers are required to make payments on account of their tax liabilities. The payment on account instalments consist of two payments on account of equal amounts:

The first on 31 January during the tax year and
The second on 31 July following the end of the tax year.

These are set by reference to the previous year's income tax liability and Class 4 NIC if any.

A final payment (or repayment) is due on 31 January following the tax year.

Payments are not due where the previous year's liability is less than £1,000 or where 80% of the previous year's bill was met by tax deductions at source.

The Association of Taxation Technicians (ATT) has warned that 'some people may not receive the tax demands they expect by the end of July' for their self assessment, even if it may be due.

ATT has issued a press release saying that the HMRC system did not correctly process all the payments on account information for 2018/19. As a consequence, the demand for the first payment on account for January 2019 may not have been issued.

Unless those taxpayers contacted HMRC, the next demand for payment on account, due on 31 July 2019, may also not be issued. HMRC has confirmed that if it has not issued a demand for payment on account, the full amount will be requested in January 2020.