Anna’s Accountancy Alerts – Week 5 (1st – 7th May 2023)

This week's Accountancy Alerts - Tax Middleman - National Insurance History Gaps - VAT Penalties

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HMRC takes action on tax middlemen

A Which? money investigation in January 2022 uncovered some firms charging fees as high as 48% of any rebates received, despite it being free via HMRC.

According to a survey of 4,000 people in November 2022, 18% of people have, at some point, been contacted by or used a third party tax refund company.

Rather than use a search engine for tax queries, the best and safest option is to go to gov.uk, where you will find lots of free advice and a step-by-step application process. If you have any questions, call HMRC general enquiries on 0300 200 3300.

Do you have any gaps on your National insurance record?

The window to fill any gaps in your National Insurance (NI) record going back to 2006-07 closes on 31 July 2023. Usually, you’re only allowed to make up any missed NI contributions going back six years, but for a limited period, men born after 5 April 1951 and women born after 5 April 1953 can pay for missed years dating back an extra 10 years.

You need at least 35 years’ worth of NI contributions to get the full new state pension (£185.15 a week in 2022-23) and 10 years’ worth to receive anything at all. Topping up with a full year costs £824 can add up to £275 a year to your pre-tax state pension (1/35th of the full rate of the state pension). Those with 10 missing years could pay £8,240 and get a boost of £55,000 over a 20 year-retirement.

Beware new VAT penalties​

HMRC is reminding VAT-registered businesses to file their VAT returns and pay on time ahead of new penalties being applied.

The first monthly returns and payments affected by the penalties are due by 7 March 2023.

The late payment penalties and points-based late submission penalties were introduced from 1 January 2023, replacing the VAT default surcharge, and apply to accounting periods which start after that date.

The penalties for late VAT returns also apply to businesses that submit nil returns and repayment returns. Additionally, changes have been made to how interest is calculated.​ See: VAT penalties and interest – GOV.UK (www.gov.uk)

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