BMG Accountants Weekly Tax Tips

WEEKLY TAX TIPS
31S T AUGUST 2018
Corporate returns
UTR number
When a new client arrives, they are often missing some vital details about their own
company. To get authorisation to act for the company, and to submit the CT return,
you need the company’s UTR number.
Most people have not memorised the UTR number for their company, and a
significant number are adept at losing all the relevant paperwork, so you ring HMRC
and ask for the UTR. From now on HMRC won’t provide you with the UTR over the
phone, citing shortage of resources and security reasons.
If you have the company’s name and registration number you can obtain the UTR
using the “find corporation tax UTR” facility on gov.uk. The UTR number will then be
posted to the company’s registered office. If this address is no longer used as it was
the address of the previous adviser, or the client’s former home, you will have to try
another approach.
Where the client has registered for online services with HMRC they can find the UTR
number as part of the business tax account (BTA), but of-course you can’t access
the BTA on their behalf. The final port of call should be Companies House website,
but you will need the company’s registration number, and jump through the other
security checks.
Filing accounts
HMRC provides free online service for filing the CT return plus company accounts,
and your new client may have imagined that they could use this service to meet
their CT filing obligations.
However, there are some significant restrictions on companies that are eligible to
use the HMRC free filing service. In particular if the company has rental income in
excess of £5,200 per year, other non-trading income of more than £1000, or is in
receipt of or pays royalties across borders, it can’t use that free filing service.
Before agreeing to take on the new client you should check whether your own CT
tax return filing software will submit the supplementary pages required for the
particular company.
Previous agent excuse
If the new client came to you because they were let down by their previous agent,
there may be penalties outstanding for late submission of earlier CT returns. You
can appeal those penalties on the basis that the client had the reasonable excuse of
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relying on a suitable qualified adviser. However, this may not be accepted by the
tax tribunal.
In Ben Associates Ltd the judge said that the company director should have taken a
more proactive approach to satisfy herself that the tax returns had been filed,
rather than relying on assurances from her accountant.
Find corporation tax UTR
Which companies can use free filing software
Ben Associates Ltd v HMRC (TC06621)
Advisory fuel rates
The advisory fuel rates are reviewed every quarter from 1 March, June, September
and December. From 1 September 2018 HMRC has introduced a new rate for purely
electric cars of 4p per mile.
Those employees who drive electric company cars will be delighted, as the cost of
charging an electric car at their home will be much less than that. However, the cost
of charging a vehicle at public charging points varies considerably from free to
30p/kh, which may work out as up to 7p/mile, depending on the vehicle model.
Rapid chargers tend to be the most expensive way to charge.
These advisory fuel rates only apply to vehicles owned by the company, where the
driver pays the cost of the fuel for business journeys. Where the company allows
the employee to charge a company owned electric vehicle for free at the company’s
premises, there is no benefit in kind as electricity is not defined as a fuel for car
benefit purposes.
As we explained in our newsletter on 11 July 2018, if an employee is permitted to
charge his own electric vehicle at work for free, there is also no benefit in kind
charge, with effect from 6 April 2018.
Advisory fuel rates applicable from 1 September 2018
Missing statements of account
In our newsletter on 19 July 2018 we warned you about HMRC issuing incorrect
statements of account, which could lead to taxpayers paying an incorrect amount as
the second payment on account due by 31 July 2018. Now we know that a number
of those statements weren’t issued at all.
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There could be several reasons for this. One is that the second payment on account
has been coded out in 2019/20, if it is within the coding limits. This can happen
even if the tax return included a cross in the box to say “do not code out”.
If the taxpayer paid the last payment on account online or by telephone, HMRC may
not issue a statement in June for the July payment, as it assumes the taxpayer will
consult his personal tax account (PTA), to find out how much tax is due. If the
taxpayer does look at their PTA they are unlikely to be much wiser, as the PTA lists
various amounts due but you can’t view history of those charges or payments.
As an agent you can see copies of statements issued to your client. Log into your
agent account in GOV.UK and load the client in SA, then go to the statements
section. The statement may have been issued to your client, but has been lost in
the post.
There is a known problem with the HMRC computer randomly removing the demand
for payments on account from the taxpayer’s account, if the 2017/18 tax return was
submitted before 31 July 2018. If this happens your client may be hit with an
interest charge for late payment, which you can appeal. If you have any strange
problems with taxpayer’s statements, the best place to report them is on the Agent
Forum. Detail of how to access the forum can be found on page 13 of Agent Update
issue 67.
Agent Update issue 67
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www.bmgaccountants.co.uk
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5/6 First Floor Offices
The Precinct
27 South Street
Newtownards
BT23 4JT
Telephone – 02891 812151
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Email – bill@bmgaccountants.co.uk

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