To comply with Article 31 of the Fourth Money Laundering Directive a new register for trusts is to be introduced. An on-line register will be introduced by HMRC. This will replace the current paper 41G form and ad hoc process for notifying changes. The new register should be up and running in June 2017.

Information to be held will include the identity of the settlor, the trustees, the protector if applicable, the beneficiaries and any other person with effective control over the trust. The directive also requires that the register holds the name, address, date of birth and NI number of all beneficiaries.

The information will have to be provided where there is a tax consequence of the trust – income tax, capital gains tax, inheritance tax or stamp duty land tax.

From the 2017/18 tax year, HMRC plans to collect potential underpayments within the tax year they arise, rather than the following year as previously practiced. This means that if an underpayment is identified during the 2017/18 tax year, HMRC will aim to adjust the tax code within the same year to collect the owed amount promptly.

Actual tax underpayments identified through P800 calculations for 2016/17 will also be collected in 2017/18. This shift advances the payment of tax, ensuring that liabilities are settled more promptly.

Safeguards to Protect Taxpayers

To prevent hardship, HMRC has implemented safeguards to restrict the amount of tax that can be collected through this method. One such safeguard is the ‘50% regulatory limit.’ This ensures that no more than 50% of an individual’s pay is deducted through PAYE adjustments. This limit is designed to prevent excessive deductions that could significantly impact an individual’s take-home pay.

Implications for Taxpayers

This proactive approach by HMRC means that taxpayers need to be more vigilant about their tax affairs. And that’s particularly within the current tax year. It’s essential to keep personal information up-to-date with HMRC to ensure accurate tax code adjustments. Regularly reviewing your tax code and understanding any changes can help prevent unexpected deductions.

How We Can Help

Navigating these changes can be complex. At Lewis Brownlee, we offer expert advice to help you understand HMRC’s tax underpayment collection methods and how they may affect you. For personalised assistance, contact us today. As leaders in the field of tax, we are always happy to see how we can help. Plus, we also offer a free introductory meeting. That way, you can find out what we do and how we do it before you commit. So, you have nothing to lose and potentially everything to gain. 

By staying informed and proactive, taxpayers can better manage their tax obligations under HMRC’s updated collection approach.

Under the Real Time Information (RTI) system, HMRC is making tax code changes more frequently based on employment and pension data reported by employers and pension providers.

These updates aim to reduce the number of overpayments and underpayments, ensuring that employees pay the correct amount of tax throughout the year.

How RTI Affects Tax Code Adjustments

Employers and pension providers submit real-time payroll data to HMRC every time they process payments. This allows HMRC to:

• Identify changes in income or employment.
• Adjust tax codes more frequently to prevent large discrepancies.
• Reduce unexpected tax bills at year-end.

While this should improve tax accuracy, frequent HMRC tax code changes may still lead to occasional errors. Employees should regularly check their tax codes to ensure they are correct.

Who Can Change a Tax Code?

It’s important to note that:

• Only the employee can request a tax code change if they believe it is incorrect.
• Employers and pension providers cannot make changes to tax codes on behalf of employees.
• Employees should contact HMRC directly if they notice an issue with their tax code.

This means taxpayers must stay informed and proactive in managing their tax affairs.

How We Can Help

Understanding HMRC tax code changes and ensuring accuracy can be challenging. At Lewis Brownlee, we help employees and pensioners resolve tax code issues and avoid unexpected liabilities. We pride ourselves on having leaders in the field of tax. So, whatever your tax concern, we are confident we can help. Plus, we offer a free introductory meeting so that you can meet one of our tax experts before you commit. It is important to know how we can help up front and we believe transparency is key to a healthy relationship. So, when you’re ready, we’re ready! Contact us today and let’s see how we can partner in your success!

Your personal tax accounts are accessed using a Government Gateway ID. Once set up, future access is by way of a two step verification – the Government Gateway ID and a code sent to the registered mobile or landline.

Some of the things you can do through your account include :-

• Check tax codes
• Check and update company car and medical insurance benefit details
• Check national insurance contribution records and state pension entitlement
• Pay a PAYE (P800) underpayment
• Notify a change of address

Instead of writing or phoning HMRC employees can access their Personal Tax Account online. This will allow them to view information about their tax affairs and tell HMRC online about any changes. So, concerned a change may affect the amount of tax you pay? You can now inform HMRC more easily.

Registration is through the gov.uk website.

Streamline Your Tax Affairs

Managing your taxes can often feel overwhelming, but HMRC’s Personal Tax Account offers a simple, secure way to take control of your tax information. Designed to provide employees with access to vital tax details, this account eliminates the need for tedious calls or letter-writing, putting everything you need at your fingertips.

Your account allows you to quickly check and update key details, from your tax code to company benefits, without waiting on hold for HMRC. It also provides valuable insights into your National Insurance contributions, helping you plan for your state pension more effectively. Whether you need to update your address or pay a PAYE underpayment, the account makes it fast and easy to stay on top of your personal tax affairs.

The Benefits of Going Digital

Gone are the days of long waits and complex processes. By registering for your account, you’ll gain access to real-time information about your tax situation, making it easier to ensure your records are accurate. This digital-first approach means fewer errors and quicker responses when notifying HMRC of changes.

How to Get Started

Setting up your Personal Tax Account is straightforward. All you need is a Government Gateway ID and a mobile or landline to receive verification codes. Start your journey to hassle-free tax management today by registering at https://www.gov.uk/personal-tax-account.

Empower yourself with instant access to your tax information—make your personal tax work for you!

If you run a payroll and you have an employee who is Scottish watch out!

A Scottish taxpayer is defined by where their main residence is, but at present HMRC is taking this to be the taxpayer’s correspondence address as reported to them.

If employees move they should update their address details with HMRC without delay. If Scottish tax rates apply to the individual the tax code will have an S in it. In 2017/18 the basic rate tax band will be £31,500 as against £33,500 in England, Wales and Northern Ireland. However this will not apply for savings income, dividend income or capital gains tax!

Also as NIC is not a devolved tax Scottish taxpayers will pay a 52% marginal rate on employment income between £43,000 and £45,000.

We may have mentioned this before – that is because it is has been a long time in actually being put into action.

The new scheme comes in from Spring 2017 but is being rolled out gradually. Main conditions to qualify are that the parents must be in work and earn at least £115 a week but not more than £100,000 each per year, that they must not be receiving free or subsidised childcare or childcare vouchers from your employer and that they have a child under the age of 12 (17 if they have disabilities).

The money must be saved in an on-line account to which the government will add an additional 20% and the money must be used to pay for childcare with a carer registered to receive a Tax-Free Childcare payment.

Contributions do not just have to be paid by parents.