Individuals Stakeholder Group

Notes of meeting 2 October 2008 Churchill Room 100 Parliament Street London

Attendees

Nick Jones - Action for Blind People
Hashmukh Pankhania - CEMVO
Rosina Pullman - TaxAid
John Andrews - LITRG
David Malcolm - National Union of Students
Pippa Goldie - Royal London Society for the Blind
William Hayden - Community Legal Advice
Stuart Gibb - Community Legal Advice
Ron Alexander - DIAL Southend
Stephanie Alexander - Ron's PA
Dan Pickles - Channels and Change Team Leader
Derek Tilstone - Third Sector Team leader
Denise Secretan - Third Sector Team
Janet Davison - Third Sector Team
Andrew Edwards - Charity, Assets and Residence
Surjit Singh - Charity, Assets and Residence

Apologies

Jane Hurn - Northern Network of Gypsies and Travellers
Derek Munn - Stonewall
Kate Green - Child Poverty Action Group
Jackie Nowell - Citizen's Advice
Mervyn Kohler - Help the Aged
Pauline Leyshon - Connexions
Vanessa Stanislas - Disability Alliance
Roger Pugh - DWP
Nigel Purkis - One Parent Families
Frances Corrie - TaxAid
Sharon Palmer - RNIB
Ben Forsyth - SAIF
Gloria Mills - Trade Union Congress
Abby Maxwell - HM Treasury
Tracey Sisley - Office Third Sector
Martin Hodgson - LITRG
Jacqui Tribe - Money Advice Liaison Group

Item 1 - Welcome

Dan Pickles welcomed everyone to the fifth Individuals Stakeholder Forum, (ISF) and gave apologies on behalf of Jane Frost who was unable to attend. Dan reiterated the aims of the forum and extended his thanks for the contribution the group had made so far to helping HMRC in developing their thinking. Such as the Customer Charter workshops at the last ISF.

Some of the agenda items for today's event had been provided by the members and Dan hoped that this would continue in the future.

The minutes of the last meeting were agreed and there were no outstanding action points.

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Item 2 - Residence and Domicile

Andrew Edwards of Charity, Assets and Residence had submitted a one page document in advance of the meeting which outlined a number of changes to the tax rules regarding residence and domicile introduced in the 2008 Finance Act. The main points were:

• The changes introduced fall into four main categories:
  • Day counting changes which can determine whether or not you are resident in the UK for tax purposes.
  • Changes to personal allowances for remittance basis users whereby you no longer qualify for a personal allowance or the annual CGT exempt amount if you claim the remittance basis.
  • £30,000 charge for those claiming the remittance basis if they are resident in the current year and have been resident in the UK for more than 7 of the previous 9 years
  • Closing loopholes and dealing with anomalies in the remittance basis which were clearly unfair under the previous legislation
• There has been a lot of discussion about this legislation and the changes proposed
• The focus has been on getting the new legislation enacted and in place. The team are now focussing on production of supporting guidance for staff and customers.
• Will be looking to share that guidance with people who have an interest to test that it is sufficiently easy to read.
• Looking to produce specific guidance for groups like students and migrant workers e.g. migrant workers leaflet already produced by Individuals Customer Directorate.
• Also looking at opportunities through other channels e.g. messages in foreign language newspapers and magazines.

Andrew invited comments from the audience and a number of interesting points were raised:

• There was concern about the number of enquiries HMRC and the wider Third Sector might have to deal with as a result of these changes
• There was concern that we had not communicated the changes sufficiently to some of the key vulnerable groups that might be impacted by the changes, like migrant workers.
• There was also concern that our compliance programmes in the future might target some of these vulnerable groups.
• There was interest in seeing the emerging guidance and help in drafting it to meet the needs of all customers.
• Questions were raised about the content of the latest draft of the Migrant Workers leaflet and the extent to which the latest draft that had been seen met the needs of customers.
• Concerns were raised around clarity and communication from HMRC generally.

AP - Derek Tilstone to check if Third Sector can review Migrant Workers guidance before it is published.

AP - Derek Tilstone to check if Migrant Worker guidance is in leaflet format and if it is possible to print hard copies and how would be needed to distribute to Third Sector.

AP- Andrew Edwards to feedback to the forum within the next six months on progress with the guidance.

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Item 3 - Key Strategic workshops

The group then split into two breakout workshops, links to the briefing and outputs from these sessions are below:

NMW Customer Focus with Denise Gaston

• Individual Stakeholder Forum - DRAFT National Minimum Wage Brief
• NMW workshop at Individuals Stakeholder Forum - 2 October 2008

New Penalties with Mark Leech

• Individuals Stakeholder Forum - A new penalty system for errors in tax returns Brief
• New Penalties workshop at Individuals Stakeholder Forum - 2 October 2008
• New Penalties for Incorrect Returns Schedule 24 Finance Act 2007

Tribunal Reform with Tony Verran and Helen Latham

• Individuals Stakeholder Forum - Tribunals Reform in HMRC and internal reviews Brief
• Tribunal Reform workshop at Individual Stakeholder Forum 2 October 2008 - Views expressed in discussion by ISF members

HMRC Compliance Checks with Heather Jones

• Individuals Stakeholder Forum - HMRC Compliance Checks Brief
• Compliance Checks workshop at Individuals Stakeholder Forum - 2 October 2008

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Item 4 - Tax on Interest Campaign

Surjit Singh, from Charity, Assets and Residence outlined the campaign (that started on 24 November 2008) that aims to target pensioners who are non-taxpayers, and who could pay less tax by registering their bank and building society account(s) so that interest is received gross. The main points were:

• HMRC plans to run a campaign to increase awareness through advertising in regional and local newspapers, radio broadcasting, and distribution of a fact sheet. This will be targeted at pensioners.
• They would like to involve representative bodies in distributing the fact sheet to pensioners they see on a face to face basis
• Keen to take the views of representatives at the forum today.

Surjit invited comments from the audience and a number of helpful suggestions and points were made:

• HMRC had previously run a targeted campaign using internal data that repaid tax on bank and building society interest - would that not be a better way of taking this forward now?
• Surjit agreed that HMRC needed to make it clear to customers that the completed registration form R85 stays with the bank or building society and is not handed in to HMRC.
• Ivor Graham from HMRC agreed to share the work being done on the form P161 as it was thought there was scope for a targeted approach to help pensioners with this issue through that form.
• Surjit confirmed that as long as circumstances remained the same customers only needed to register their account(s) once.
• Students as well as pensioners may be in a position to register their account(s) and /or claim tax back, but needed to de-register their account(s) if their income increased.

AP - Ivor Graham will consult relevant members of the forum on the work being done with form P161.

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Item 5 - Summary and close

Dan Pickles wrapped up the event and thanked everyone for sparing their valuable time.

Dan reminded everyone that we are always keen to have feedback on how we run the day and how we might improve the event - please feedback any suggestions to: Janet Davison

Finally if anyone has any further comments or suggestions from the day then please feed these back through Janet Davison who will ensure they get to the right place.

AP - Customer Charter Team to provide an update for the next Forum.

AP - Third Sector organisations to provide subjects for workshops for future events.

AP - Denise Gaston to provide information on NMW and NIC's. See response below:

In respect of the April changes affecting the way NMW arrears are calculated:

The wording of the legislation is such that, as intended by BERR, the whole of the uplift will be treated as earnings and therefore liable to tax and NICs. This means that the uplift will be subject to PAYE. The monies received in return for work undertaken and would have been taxable/NICable if received at the proper time.

AP - Denise Gaston to provide NMW calculation. See response below:

From 6 April 2009 the way employers calculate and pay arrears of the NMW to workers is changing.

The new changes will require employers to pay arrears which will increase depending on the length of time they have been outstanding. The exact amount of an individual worker's arrears will be calculated using a formula set out in legislation. This aims to restore the purchasing power of wages that were not paid at the proper time. For each pay reference period the formula is:

Original underpayment
------------------------------ x Current NMW rate = Arrears.
Original NMW rate

From 6 April 2009 arrears must always be calculated in this way. It does not matter whether or not the arrears are for periods prior to that date.