Working Together Issue 15

Contents

Business by Telephone - Update

It is the Revenue's strategy to conduct more business by telephone and we have established several telephone Contact Centres. The Contact Centres were designed to channel public calls out of local Offices and into specialist centres, where an extended service could be offered as an alternative to written correspondence. Contact Centre advisers do not have access to your clients' paper records or files but they can see their tax records on computer. An outline of the business that a Taxes Contact Centre can conduct was featured in Working Together issue 11.

We published two Statements of Practice about Business by Telephone on 1 September and expanded the range of business that may be conducted by telephone. Initially the extended services will only be available in our Contact Centres. However, as the Revenue is committed to expanding the number of Offices which will be served by Contact Centres, all our customers should see the phased introduction of these improved services over a period of time.

We will accept certain information by telephone from authorised third parties, providing that their identity can be satisfactorily verified. We will also provide specific limited information by telephone. Some agents complained that they had difficulty in contacting the Contact Centres on the public 0845 numbers, so we put in place, as a temporary measure, agent priority numbers.

A complete list of these priority numbers was published in Working Together issue 14 and we are pleased to offer some further numbers for two more Contact Centres below. Please only use these special numbers if you have an urgent issue and are unable to get through on the usual 0845 lines. The numbers are for agents' use ONLY. Please do not pass these numbers to your clients.

Taxes Contact Centre numbers Old service office name New service office name Agent priority access number

Blackpool

0845 3021478

0845 3021482

Preston
Blackpool
Chorley
Lancaster
St Annes

Worcester
Hereford
Ludlow
Evesham
Redditch

NW Lancashire

Worcester and Hereford

01253 503208

01253 503209

Lothians

0845 3021409

0845 3021484

Castle View
Lothians
Glenrothes

Edinburgh
Stirling
Falkirk
Hawick
Galashiels
Dundee
Perth
Dunfermline
Kirkcaldy

Lothians


Scotland South

Scotland East

0131 453 7220


0131 453 7230

Our figures show that well over 90% of telephone calls from agents can be handled at our Contact Centres; only a very small proportion of more complex calls need to be transferred to Area Offices.

During the recent peaks in New Tax Credits calls we were able to switch the overflow of calls from the New Tax Credit Contact Centres to the Taxes Contact Centres. This meant that, from time to time, one or two of our Taxes Contact Centres were unable to handle calls about tax issues. We know from your feedback that this caused difficulties so we have put in place a new system which means that the agent priority numbers will not be transferred out of their `home' Taxes Contact Centre to another one which cannot deal with the call.

Redesigned Revenue website

The Revenue's redesigned website was launched on 1 December 2003.

For tax advisers, we have introduced the Practitioner Zone, which you can access by clicking on the link on the top right-hand corner of the home page.

We welcome your views on the redesigned website and the Practitioner Zone in particular. You can use the on-line feedback form (www.inlandrevenue.gov.uk/comment/index) or contact the Working Together Team. Our contact details are shown below.

SA Online Agent Service - News

As we go to print we are completing our next release of Online Services for agents. Subject to final testing the following services will be released shortly.

You will be able to file Partnership and Trust Returns over the Internet as well as for individual clients.There will be no Revenue branded software product for the submission of Partnership and Trust Returns; your software vendor can advise you on the availability of their products to support this service.

Other improvements to our service include:

  • Viewing Statements of Account for Trusts as well as individuals
  • Search facilities by name and reference number for your client lists and the ability to download lists to your own software
  • Extending access to services to agents with overseas addresses
  • Improving email confirmations of receipt of Returns to include client Unique Taxpayer References (UTR)

In response to feedback from tax advisers about the complexities of dealing with the Government Gateway, we have simplified the registration process for agents to use our online services (SA, CT & PAYE). You will be able to register direct from the Practitioner Zone on our new website (www.inlandrevenue.gov.uk/practitioners), by selecting any of the services in the "Do it Online" menu.

You can also find out more about our services by clicking on the Practitioner Zone and then choosing the Electronic Business link from the drop down menu.

Online Services Helpdesk

The telephone number for the Helpdesk given on page 9 of Working Together 14 is wrong. The correct number is 0845 60 55 999. This has already been corrected in the Internet versions.

We apologise to you and our Helpdesk colleagues for any inconvenience.

Self Assessment Tax Calculations

We would like to draw your attention to two problems we have experienced with the issue of some SA Tax Calculations (form SA302) and their agent copies.

Tax Calculations are normally produced automatically when we have been asked to calculate the amount of tax for you, using your figures. Although the system has correctly computed the amounts of tax due and carried this into our operators' screens, unfortunately the Tax Calculations were not produced:

1. for a proportion of Returns processed between April and August 2003

and,

2. for Returns processed between the beginning of September and 14th October.

In both cases computer fixes were put in as soon as we were able to ensure that no new cases were generated.

For Returns in the first scenario, Tax Calculations have now been issued and are dated either 11/12th October or 18/19th October.

For Returns in the second scenario, Tax Calculations were issued in November and were dated either 2nd or 3rd weeks of the month, still providing the information in sufficient time before the payment date.

Calculations for Returns processed from 15 October were issued as usual.

The problem did not affect previous year Returns nor did it affect amended Returns. So where we have received and processed an amended Return, we will not now be issuing the Calculation related to the initial submission.

The problem has not affected the issue of SA Statements so in some cases your clients will have received their Statements before the Tax Calculation.

We are sorry for the inconvenience that these problems will have caused.

This note first appeared on our website on 22 October 2003.

Handling Your Clients' Payments

For various reasons, some tax advisers often use the wrong or another client's payslip when sending payments to the Revenue. This causes problems for the Revenue, tax advisers and their clients.

Every payslip has the reference number pre-printed in the box on the top left-hand corner and also in the scan line at the bottom. Although tax advisers amend the reference in the box in manuscript, our banking equipment reads the scan line along the bottom of the payslip. As a result of this, a significant number of payments are allocated to the wrong taxpayer, especially following the SA peaks in January and July. In addition, this can create an overpayment on the incorrect taxpayer's record that may be repaid.

This situation usually only comes to our attention when the taxpayer, who made the payment, receives a demand or statement and complains. Putting this right involves both the Revenue and you in a considerable amount of work and inconveniences the client, especially if an incorrect repayment has been made.

Please use the correct payslip for each individual client. If that is unavailable, please forward the payment either with a covering letter or compliment slip clearly showing the client's name and reference.

When you send payments for different clients at the same time please do not send a single aggregated payment. Instead, please send a separate identifiable cheque for each client as this saves inconvenience for everyone.

Enquiries Under Stamp Duty Land Tax

In the previous issue an overview of the stamp duty changes and the introduction of Stamp Duty Land Tax from 1 December 2003 was provided. In this issue we would like to concentrate on the enquiry regime that the modernised system will bring to stamp duty for the first time.

Process now - check later

Stamp Duty Land Tax is a tax on transactions, not documents. For transactions in land and buildings in the UK, completed on or after 1 December 2003 customers will no longer need to send in documents for stamping but will be required instead to complete and send in a land transaction return to our data capture centre in Netherton.

The enquiry regime to be implemented will mirror provisions already in place for other taxes administered by the Inland Revenue.

In line with other taxes Stamp Duty Land Tax will introduce the concept of 'process now, check later'. This will also apply to reliefs where you need to complete the land transaction return and relevant box to claim the relief. The obligation to retain the records remains with the client as the liable person.

We want everyone to pay the right amount of Stamp Duty Land Tax - no more, no less. We also want people to feel confident that:

  • Other taxpayers are paying what they should
  • We operate the tax system fairly.

In order to do this, we will enquire into some land transaction returns. This means that we will ask for further information to help us to understand the amount of Stamp Duty Land Tax paid or to confirm that a relief is due and to check that it is right. We want to make sure your client does not pay too much Stamp Duty Land Tax or too little. Either way, we will tell you if we find something wrong.

Random and risk based enquiries

A small selection of returns will be selected for review. Some enquiries will be selected at random and others will be selected on a risk basis. The overwhelming majority of transactions will be accepted and certificates issued without an enquiry.

Enquiry window

Inland Revenue will have a fixed time that they can start an enquiry - this is known as the enquiry window and is a period of 9 months:

  • After the filing date, if the return was delivered on or before that date
  • After the date on which the return was delivered, if the return was delivered after the filing date
  • After the date on which the amendment was made

Enquiries will also be conducted into self-certificates given to the Land Registries.

Any enquiry will start with a letter to your client (purchaser) with a copy sent to you, if you have completed the correspondence box on the land transaction return (SDLT1). At the end of the enquiry a letter closing the enquiry will be issued to your client and copied to yourselves, again where the correspondence box has been completed. (Question 59 page 5 of SDLT1).

Retention of records

In line with other taxes, records supporting transactions must be retained for six years. However, we are not expecting your client to keep any additional records than the records that they already retain.

An example of the types of records include the following, however this list is not exhaustive:

  • a contract/agreement for sale and any related side papers
  • details of any apportionment of consideration between the land transaction and other transactions (e.g. purchase of chattels/moveables)
  • any professional valuations that have been obtained
  • relevant instruments relating to the transaction, in particular any contract or conveyance, and any supporting maps, plans or similar documents
  • partnership agreements
  • completion documents
  • records of relevant payments, receipts and financial arrangements
  • deed of attorney, where you have the power of attorney in particular cases.

Interest and penalties

As well as the penalties and interest mentioned earlier for submitting the Land Tax Return late, a penalty and interest may be due if we find something wrong with a return. We can only seek penalties for incorrect returns if tax is underpaid and the error was due to negligence or fraud.

When calculating any penalty we will take into account:

  • The extent to which your client voluntarily disclosed anything that was wrong
  • Your client's help in concluding our enquiries, and
  • The seriousness of the errors or omissions.

Appeals

At present a stamp duty payer can only appeal against an adjudication directly to the High Court. Under Stamp Duty Land Tax there will be a range of appeals to both the General and Special Commissioners in line with other taxes with disputes about valuation being referred to the appropriate valuation tribunal.

The normal time limit for making appeals is 30 days.

Further Information

Further information on Stamp Duty Land Tax is available on our website at www.inlandrevenue.gov.uk/so

We are currently producing Code of Practice leaflets and enquiries, appeals and penalties leaflets specifically relating to Stamp Duty Land Tax and these will be available from the date of implementation. Details will be available on our website.

Self Assessment - Clients Who No Longer Need to File a Return

It has been best practice for Revenue staff to issue a letter to taxpayers if they are no longer required to complete a Tax Return. As a result of representations from Working Together partner representative bodies and feedback from tax advisers, fresh instructions have been sent to staff making the issue of such a letter mandatory.

From next year, the letter will be issued automatically by computer to both taxpayers and their tax advisers. This will also include details of the circumstances in which a Return would normally need to be completed.

Penalties for Late Filing of SA Returns

In our last issue we told you that our Receivables Management Service is forming specialist teams to begin penalty proceedings where there is persistent delay in submitting SA Returns.

A number of you contacted us to query whether the penalties would be reduced to nil if there was no tax to pay.

The article said: 'Charging daily penalties only reflects the failure to submit the Return, so they remain due whether or not there is tax to pay.'

Penalties which are charged under S93(2) & (4) Taxes Management Act 1970 (often known as fixed penalties) cannot exceed the tax liability for the year (S93(7) TMA). This section does not apply to (daily) penalties charged under S93(3)&(6).

Company Tax Return Form CT600

Version 1 of the main return form has been reprinted every year since it was introduced in 1999 to add new and amend existing items. There have also been many changes and additions to the Supplementary Pages and the CT600 Guide.

What We Are Doing

We have had many requests to revise the forms so that boxes again appear in numerical order. Apart from the usual consultation with representative bodies (including the accountancy institutes and associations) and third-party software houses, we have also consulted directly with some volunteer companies through the Small Business Service on proposals to

  • introduce a short form aimed at companies with relatively straightforward tax affairs
  • make improvements to the CT600 Guide.

Final drafts of the forms are now being shown to those who have helped us before we approve and publish the new Version 2 forms. We expect to make the new forms available shortly. There will be an announcement on the website and we will let you have more detail in a future edition of Working Together.

Which Forms to Use Now

Version 1 forms will stay in print until the new Version 2 forms are published. If you need to use a company tax return form before then, or even afterwards, Version 1 forms remain, and will remain, valid for use. Although we are improving the forms with Version 2 there are no new boxes you must complete which would make Version 1 redundant for accounting periods ending on or after 1 April 2003 so Version 1 forms can continue in use until the new forms are available.

As always if you need copies of company tax return forms you can either print a copy from our website or obtain from 1 to a maximum of 50 copies at one time from the CTSA Orderline by telephoning 0845 300 6555. Local Inland Revenue Offices no longer keep stocks of these forms.

Revenue Guidance Publications

The new International Manual was published on 17 October 2003. The new Manual includes brand new practical guidance for Revenue staff on transfer pricing and brings together updated guidance for Revenue staff on international issues, including double taxation relief and controlled foreign companies. Superseded guidance material is being deleted.

Any queries arising from the new Manual should be directed to:

    Jo Myers
    Revenue Policy International
    Victory House
    30-34 Kingsway
    London
    WC2B 6ES

    Telephone: 020 7438 7596
    Email: International Manual Queries

The Business Income Manual is to help people compute trading profits for tax purposes or check computations. It supplements the basic guidance in the Tax Return and Help Sheets. It is an expanded and updated version of material previously in the Inspectors Manual.

Self Assessment Legal Framework (or SALF for short) is an update to Self Assessment: the Legal Framework (known as SAT2), which was last published in 1995.

It updates the material from SAT2 and describes the Self Assessment system after 5 years of practical operation, following changes to the 1995 to 2002 Finance Acts and decisions made by the Special Commissioners about the meaning of the legislation in Taxes Management Act 1970.

Work has already begun on some early amendments, for example including references to the new legislation in Income Tax (Earnings and Pensions) Act 2003.

SALF will only be available on the Internet.

You can find all of these guidance publications at www.inlandrevenue.gov.uk/manuals

Form CT41G

Form CT41G is used to provide the Revenue with new company details.

In response to comments made at local Working Together meetings, form CT41G can now be downloaded from the Revenue's Internet site at:

wwww.inlandrevenue.gov.uk/ctsa/returns.htm

Working Together Issue 14

Many of you contacted the Team to point out that the first line of your address was missing on the envelope containing our last issue. Indeed many of you only received Working Together 14 through some impressive detective work by the Royal Mail. We would like to add our apologies to those of our mailing contractor. Thank you to those of you who contacted us.

Self Assessment - More on Payments

It is more than two years since we last published guidance about making payment. The approaching 31 January payment and filing deadline provides an ideal opportunity to refresh and update the payment guidance we issue to our customers:

    We accept payment by a range of methods but recommend you pay electronically. When you pay electronically your payment record is updated promptly so long as you provide accurate details of your reference number.

    The reference number you need to use is shown on the payslip at the foot of your Statement of Account. It is made up of 10 digits plus the letter `K' and looks like 1234567898K.

    There are a number of electronic payment methods you can use:

    • your bank or building society Internet banking service: enter details of your payment into your PC
    • telephone banking: telephone your bank with payment details
    • BillPay: use the Internet to pay by Switch, Visa Delta, Solo or Electron debit card. Please log on to www.billpayment.co.uk/inlandrevenue and follow the instructions. (You no longer have to register with BillPay to use this facility.)

    If you are unable to pay by one of the above methods you may find it convenient to pay by cheque or cash at your Bank or a Post Office. Paying at your bank or Post Office is safer and more efficient than payment by post because your payment is notified to us electronically.

    When you pay at the bank or Post Office please ensure payment is accompanied by your payslip. The payslip we issue as part of your Statement of Account is specially encoded with your details. This information tells our system who the payment is for. It is important to use the correct personalised payslip otherwise payment will go to the wrong taxpayer record.

    Where you decide to pay by post, please send it with your personalised payslip to the Accounts Office in our envelope. Please do not include payments with Tax Returns. And please do not leave payment so late that it has to be made to the local office. Paying direct to the Accounts Office, where computer records are held, will ensure your payment is recorded without any delay.

    If you post your payment please use the payment envelope we provide with the Statement of Account. Send us just the payslip and cheque, with no attachments, enclosures, staples or paper clips.

    Our aim is to process all cheques on the day of receipt so taxpayer records are updated the following day. The automated equipment which opens, sorts and processes cheque payments is most efficient when handling individual cheques each accompanied by a personalised payslip. And that is where you can help by ensuring that postal payments reach our Accounts Office without any additional material in the envelope.

    If you do not use the correct payslip, or include anything other than a cheque and payslip in our envelope it slows processing, delays updating your record and increases the potential for error.

Additional information for Tax Advisers

Where you post payments to the Accounts Office it is best to send a single cheque with a single payslip. But if you need to send a composite payment for more than one client on a single cheque, please ensure there is a separate personalised payslip for each taxpayer and not a paper schedule.

Where the composite payment is for a partnership, we need the individual personalised payslips so we know how to split the payment between the partners. Also please check that the individual amounts for each taxpayer add up to the total of the cheque. If the cheque and payslip amounts do not agree, this delays the updating of the records for all the taxpayers covered by the composite payment.

The payslip we issue as part of the Client's Account Information is specially encoded with your client's details.

There is more information about making payments on the Inland Revenue website www.inlandrevenue.gov.uk/howtopay/self_assessment.htm

If you wish to speak to one of our operators for more information, please telephone the Accounts Office on 01274 532007.

Self Assessment Tax Return Filing - Helpful Hints

To help us capture Tax Returns efficiently, please use these few tips:

  • Please do not use paperclips.
  • Please do not tag or staple several Returns together. There is a risk that only the top Return will be recorded as received.
  • Any correspondence that has no bearing on the Return, such as claims or correspondence relating to another year or requests for reductions to Payments On Account (SA 303), should be sent separately from bulk Returns. Please make sure that you use the correct postcode and reference on the correspondence. That way it will be dealt more quickly.
  • Please clearly mark any change of address on the front of Return.
  • If using a substitute Return please enter the client's name, address and UTR (Unique Taxpayer Reference). Please mark the Return clearly if it is a new Self Assessment customer and, if a new self-employment case, let us have the NINO. We recommend that you send the completed CWF1 to the National Insurance Contributions Office.
  • Always make sure you enter the exact UTR on the Return. The UTR is unique to each individual. In particular, make sure that you enter both the partners' and partnership UTR where appropriate when dealing with a partnership.
  • If a Tax Return contains a bar code, please do not use it for any client other than the one it was intended for. If you do, there is a risk that the Return will be recorded on someone else's record.
  • Send cheques separately from the Return and write the UTR on the back. The cheque will be dealt with more quickly.

Many thanks to Working Together colleagues in South Wales Area who submitted this article to us.

editorial

Working Together is a partnership with the CIOT, ICAEW, ATT, ACCA, ICAS and AAT. Although the material in this publication obviously reflects discussion and consultation with these bodies, the Revenue is solely responsible for its contents and for the views expressed in it.

contact details & back issues

Back issues can be downloaded from our featured area on the Revenue website www.inlandrevenue.gov.uk/workingtogether/publications/index.htm. If you would prefer a paper copy, please write to or email the address below. Working Together is covered by Crown Copyright. There is no objection to firms copying the publication for their own use. Anyone wishing to re-publish Working Together or extracts more widely, should write for permission to

Greig Rattray
Working Together Team,
5S South West Wing,
Bush House,
London WC2B 4RD

or e-mail: Permission to publish extracts from Working Together

 

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