Self-Assessment Taxpayers get additional help through HMRC Time To Pay

UK taxpayers can now apply online for additional support from HMRC to help spread the cost of their self-assessment tax bill from an annual payment to smaller monthly payments.

In his Winter Economy Plan, Chancellor Rishi Sunak announced that taxpayers could pay amounts due on 31 January 2021 (including any deferred payment on account from July 2020, their balancing payment owed for 2019/20 and the first payment on account for the current tax year) in monthly instalments online through HMRC’s online Time To Pay system.

Interest will still be charged on the tax owed from 1 February 2021.

Taxpayers who wish to set up an arrangement must:

·         Have no outstanding tax returns, other tax debts or existing HMRC payment plans;

·         Have tax due of between £32 and £30,000;

·         Put the payment plan in place no later than 60 days after the due date of 31 January 2021.

Anyone who has larger amounts due or needs more than 12 months to settle their tax affairs will need to contact HMRC separately.

HMRC has also asked taxpayers to be aware of scammers claiming to be from HMRC who offer to help set up Time To Pay.

COVID-19 – Chiene + Tait: Business Continuity Plans

A statement from our Managing Partner, Carol Flockhart: 24 March 2020

This is an unprecedented time, with significant challenges both in people’s personal and work lives and the economy. We would like to reassure you that the safety of our people and the importance of continued client service are our two current operational focuses which means that we will continue to deliver our services to you in a way that protects both you and the Chiene + Tait team.

Working arrangements

We have implemented new health and safety and hygiene policies that follow all relevant governmental guidance. These include home-working policies, frequent cleaning, and sickness and self-isolation policies. Our people are able to work from home with remote access and with little disruption to communications

Meetings

It is our policy to host meetings via phone or video call until further notice. We will contact you in advance of any scheduled meetings to arrange a suitable method.

Correspondence

Whilst these current working arrangements are in place, please correspond with our team via email than by post for the time being, if possible.

Guidance and support

The UK and Scottish governments continue to announce initiatives to mitigate the impact of the situation – you can see our summary of them here.

We are also offering support to our business clients in the form of a free business diagnostic. Our Corporate Finance team can send you a questionnaire, have a subsequent telephone conversation to help you identify potential pain points for your business and identify the different government support available. More information is here.

There will be further developments to the COVID-19 situation and we aim to respond quickly and flexibly to make sure we continue to provide the level of service you expect from Chiene + Tait. We will, of course, continue to communicate any material changes or important updates to you.

We are here to help and want to ensure you are able to navigate this ever-changing situation as best you can. Please contact us if you have any questions or if you need any advice during this time.

Take care.

Carol Flockhart
Managing Partner

Land Promotion Agreements and hidden VAT charges – Iain Masterton discusses

Chiene + Tait VAT Director Iain Masterton is featured in the most recent LandBusiness magazine discussing the VAT treatment of Land Promotion Agreements (LPAs).

Iain conveys the attractiveness of rural land development to property developers – and how, in turn, this enables landowners to enter into LPAs with promoters when they wish to maximise their income. LPAs can be arranged in different ways so that the partnered promoter can aid the landowner with their return of the sale without the added pressure of obtaining planning permission or finding a buyer. As these agreements are flexible – and can be in place for many years – it is essential that landowners understand their VAT position so that the end VAT cost does not surprise them when the sale ultimately ends.

Iain confirms that it is important to understand what the LPA originally says. Often there is an initial understanding by the landowner about the right over land. This depends on if the land is opted to tax. If it is not, then the grant of any right over the land is exempt from VAT. However, for there to be a right over land, the agreement must make it clear that that is exactly what the promoter is acquiring. In some cases, the promoter is in fact not receiving the right to the land but instead an exclusive right to promote the land in question. This is a taxable supply of services. Due to this technicality, VAT errors can occur for landowners who have already received introductory or extension payments.

When a promoter is involved, they will be acting as an agent and therefore will charge a commission which will be subject to VAT. This would be non-recoverable to the landowner if the sale did not go through. This can be avoided if the land is taxed prior to the sale as the VAT could be recovered on the promoter’s commission and any other legal fees associated with the sale.

Iain concludes by stating that LPAs are beneficial to both landowners and potential buyers – as this can maximise returns and sell the land at an optimal time for both landowner and developer.  He would recommend, however, that the VAT aspects of these agreements are considered fully to ensure that there is no tax loss to landowners.

 

To read the full article click here.