General

It is not unusual for taxpayers to find themselves in a position where they disagree with a tax decision issued by HMRC. There are a number of different options open to taxpayers seeking to use the review and appeals process.

Note, that there is a separate procedure to be followed by taxpayers that make a complaint about HMRC for issues such as unreasonable delays, mistakes and poor treatment by HMRC’s staff.

It may be possible to make an appeal against a tax decision. You can appeal to HMRC against a penalty, for example for:

• an inaccurate return
• sending in your tax return late
• paying tax late
• failing to keep adequate records

There is normally a 30-day deadline for making a claim, so time is of the essence. HMRC will then conduct a review, by using HMRC officers that were not involved in the original decision. A response to an appeal is usually made within 45 days but can take longer for complex issues.

If the taxpayers do not agree with HMRC’s review, there are further options available which include making an appeal to the tax tribunal or using the Alternative Dispute Resolution (ADR) process. The ADR uses independent HMRC facilitators to help resolve disputes between HMRC and the taxpayer.

HMRC continues to warn of the ever-present problem of fraudulent phishing emails, suspicious phone calls and texts. These unwanted emails, phone calls and texts are being sent from around the world as HMRC and other agencies continue to combat the problem.

These messages aim to obtain taxpayers personal and or financial information such as passwords, credit card or bank account details. The phishing emails and texts often include a link to a bogus website encouraging the recipient to enter their personal details.

For example, taxpayers who completed their tax return for the 2022-23 tax year by the 31 January 2024 deadline might be taken in by an email, phone call or text message offering a tax rebate.

Recipients of phony messages should avoid clicking on any links. HMRC asks that phishing emails and bogus text messages are reported. The emails can be sent to HMRC by email phishing@hmrc.gsi.gov.uk or by text message to 60599.

HMRC responded to 207,800 referrals from the public of suspicious contact in the past year to January – up 14% from the 181,873 reported for the previous 12 months. More than 79,000 of those referrals offered bogus tax rebates.

HMRC is clear that they do not email, text or phone a customer to tell them that they are due a refund or ask them to request a refund. Taxpayers receive repayments into their chosen bank account, and can see any transactions in their online HMRC account and in the HMRC app. 

Self-employed taxpayers should notify HMRC as soon as practicable when they begin working for themselves. HMRC must be officially notified by 5 October following the end of the tax year so that a self-assessment return can be issued on time and to avoid any unnecessary penalties.

HMRC’s guidance says that you are probably self-employed if you:

• run your business for yourself and take responsibility for its success or failure;
• have several customers at the same time;
• can decide how, where and when you do your work;
• can hire other people at your own expense to help you or to do the work for you;
• provide the main items of equipment to do your work;
• are responsible for finishing any unsatisfactory work in your own time;
• charge an agreed fixed price for your work; or
• sell goods or services to make a profit (including through websites or apps).

The newly self-employed should also register to pay National Insurance contributions (NICs) and monitor whether a VAT registration is required.

There is a £1,000 tax allowances for miscellaneous trading income that has been available to taxpayers since April 2017. This is known as the trading allowance.

The exemption from tax applies to taxpayers who have trading income of up to £1,000 from:

• self-employment;
• casual services, for example, babysitting or gardening; and
• hiring personal equipment, for example, power tools.

Where this £1,000 allowance covers all the individual’s relevant income (before expenses) the income is tax-free and does not have to be declared to HMRC.

The government published the Autumn Finance Bill 2023 on 29 November 2023. The Bill is officially known as Finance Bill 2023-24. The Bill contains the legislation for many of the tax measures announced in the recent Autumn Statement.

The Bill has now completed its passage through the House of Commons and the 1st reading at the House of Lords. This stage signals the start of the Bill's journey through the Lords. The 2nd reading of the Bill in the House of Lords is scheduled to take place on 21 February 2024.

The Bill is known as a 'Money Bill' which means that the further stages of the bill namely, the committee stage, report stage and third reading at the House of Lords are usually formalities. Once these steps have been completed, the Bill will receive Royal Assent and become an Act of Parliament.

Some of the many measures included within the Bill are:

• Making full expensing permanent for expenditure on plant & machinery.
• Extending the sunset clause for the Enterprise Investment Scheme and the Venture Capital Trust scheme to 6 April 2035. 
• Reforming the film, TV and video games tax reliefs to refundable expenditure credits.
• Expanding the ‘cash basis’ – a simplified way for over four million smaller, growing traders to use a simpler method of calculating their profits and pay their income tax.
• Legislating for more generous support for loss-making R&D intensive SMEs as announced in spring.
• Setting the rates of excise duty and certain environmental taxes.

The Autumn Finance Bill will be followed by the Spring Finance Bill 2024 which will be published after the Spring Budget which is taking place on 6 March 2024. This will cover any remaining tax measures needed ahead of April 2024 and will become the second Finance Act of 2024.

The Valuation Office Agency (VOA) is writing to some owners of self-catering holiday lets that are assessed for business rates. They are doing this because they need further information about the income and expenditure of these properties.

Last year, the VOA wrote to most self-catering holiday let owners in England and Wales to ask them to provide letting information about their property.

This information was used to determine if properties should be assessed for business rates or Council Tax.

If the VOA determined that your property should be assessed for business rates, you may receive another form which asks for additional information.

How The VOA will use your information

The information you provide will be used to calculate the rateable value of your property. Councils use rateable values to calculate business rates bills and determine if you are eligible for business rates reliefs.

The VOA are legally required to update the rateable values of all non-domestic properties, including self-catering holiday lets, every three years. This is called a revaluation.

They do this to make sure business rates bills are based on up-to-date information.

To value self-catering holiday lets, information is needed about your income and expenditure.

Provide the information within 56 days

Forms will be sent between February and August 2024.

If you receive a form from the VOA asking for information about your self-catering holiday let, it is important that you return it within 56 days of when it was issued.

If you do not, you may have to pay a penalty.

Check you have provided all the information the VOA have asked for before you return the form, even if you have previously shared information with the VOA. If you return the form and it is partially incomplete, you may still have to pay a penalty.

The government department active in the promotion of electric vehicles has published guidance regarding the costs, charging issues and infrastructure. We have extracted a few comments and reproduced them in this post.

Buying an electric vehicle

While a new electric vehicle (EV) costs more to buy up front, today most drivers in the UK (around 80%) will buy their cars on the used market. Industry intelligence suggests that some EVs on the used market are now similar in price to their petrol and diesel equivalents. The number of used EV purchases have grown by over 50% when comparing the first quarter of 2022-23, increasing the pool of used vehicles available.

The price gap for new cars has continued to decrease over the past few years. According to industry data, the purchase price premium of an EV – relative to an equivalent internal combustion engine (ICE) vehicle – has dropped from around 50% in 2020 to around 40% in 2023. With battery costs reducing and continued innovation, some external forecasts predict that some EVs could be around the same price to purchase as a petrol or diesel car by the end of the 2020s.

Company car tax

Many workplaces provide salary sacrifice schemes, which can reduce the cost of purchasing an EV. To support this, company car tax is favourable for EVs at only 2%. The government has confirmed that company car tax for EVs will increase 1% each year from 2025 to a total of 5% in April 2028. By contrast, the most polluting cars will pay 37% company car tax in 2028. EVs are also exempt from vehicle excise duty until 2025 and will continue to receive favourable first-year rates after this.

Battery range

According to the Society of Motor Manufacturers and Traders, the average electric range for new EVs launched in 2023 was nearly 300 miles, compared to 210 miles in 2020. Some on the market have a quoted range of over 300 miles, which is enough to travel from Exeter to Leeds. There are now more than 30 models available with a quoted 200-plus mile range.

With battery costs falling around 80% over the past 10 years and further decreases expected, the government expects to see increasing numbers of EVs with higher ranges.

Charging costs

Charging a medium-sized electric car at home can cost around half the price of filling up an equivalent petrol vehicle. Charging at home costs around 8p per mile while a diesel or petrol vehicle can cost around 13p to 17p per mile to fuel, as of January 2024. Some suppliers continue to offer tariffs enabling drivers to charge their EVs at under 3p per mile (such as an overnight tariff offered by Octopus Energy).

On average, Zapmap charging data shows that the cost of charging an EV on the public network is roughly equivalent to fuelling an equivalent petrol car.

Charging points

The number of public chargepoints is growing fast. In January 2024, there were more than 53,600 public chargepoints available across the UK, a 45% increase since the start of 2023. This puts us on a growth rate consistent with delivering at least 300,000 chargepoints by 2030, in line with our forecast charging demand.

Availability of public charging devices is expected to continue increasing. ChargeUK, the industry body for chargepoint operators, has committed to investing more than £6 billion in charging infrastructure before 2030 and doubling the number of chargepoints over the next 12 months.

The Government has launched a new account on WhatsApp Channels, allowing members of the public to subscribe to receive important updates to their phones.

As a trusted, verified account the UK Government channel will focus on reiterating important information which is relevant directly to the public in areas like updating on public services, news updates that affect a large part of the population or pointing to new guidance and public resources. 

Like any new communications method being used by Government – the UK Government channel will be continuously reviewed to ensure that it is being used effectively to provide timely and relevant information. Users can expect to regular updates from across government on a weekly basis.

Examples of other UK Government channel posts include:

• Reiterating public health advice like announcing winter flu jabs
• Deadline reminders like self-assessment tax return deadlines
• New information on extra support the public can receive, like cost of living payments and government-linked discounts and other benefits 
• Childcare support updates

The Government will also use the channel to share trusted and essential information from partner organisations like UK Health Security and Public Health England health alerts.

The channel will be a publicly run information service, similar to GOV.UK or official government social media accounts. It will not be used for political or campaign purposes and will be managed by government officials. 

Anyone with a WhatsApp account can follow the new UK Government WhatsApp channel by searching for ‘UK Government’ in the ‘Updates’ section of the app and choosing to follow the account.

The Chancellor of the Exchequer, Jeremy Hunt has confirmed that the next UK Budget will take place on Wednesday, 6 March 2024. This will be the Chancellor’s second Budget and will include the government's tax and spending plans as well as new growth and borrowing forecasts. Various pundits are suggesting that selecting a Budget date in early March leaves the possibility of a general election as early as May 2024. The next general election is required to take place by January 2025.

There may be a round of new tax-cuts and changes as the government works to attract voters and narrow the gap against Labour. Details of all the Budget announcements will be made on a special section of the GOV.UK website which will be updated following completion of the Chancellor’s speech.

The Budget will be published alongside the latest forecasts from the Office for Budget Responsibility (OBR). This forecast will be in addition to that published for the Autumn Statement and fulfil the obligation for the OBR to produce at least two forecasts in a financial year, as is required by legislation.

The OBR has executive responsibility for producing the official UK economic and fiscal forecasts, evaluating the government’s performance against its fiscal targets, assessing the sustainability of and risks to the public finances and scrutinising government tax and welfare spending.

Scotland’s Deputy First Minister and Finance Secretary, Shona Robison delivered her first Budget statement to the Scottish parliament on 19 December 2023.

The Finance Secretary said that the ‘Managing the cumulative impacts of the UK Government’s disastrous Autumn Statement, high inflation and ongoing economic damage from Brexit means we have had to make difficult choices and prioritise support for those who need it the most’. The measures announced for next year are expected to raise an additional £1.5 billion in Income Tax revenue, as compared to UK Government policy.

One of the measures announced to help tackle the constrained financial position was a new tax band called the advanced rate band which will apply a 45% tax rate on annual income between £75,000 and £125,140. In addition, 1p was added to the top rate of tax and the starter and basic rate bands were increased in line with inflation. There were no changes to the Starter, Basic, Intermediate and Higher tax rates and the Higher rate threshold will be maintained at £43,662.

The proposed Scottish rates and bands for 2024-25 are as follows:

The standard personal allowance remains frozen at £12,570. 

There were no changes to the land and buildings transaction tax (LBTT) rates for residential or non-residential property. The standard rate of Scottish landfill tax will rise to £103.70 per tonne and the lower rate to £3.30 per tonne from April 2024 maintaining alignment with the corresponding taxes in the rest of the UK.

The Budget measures are subject to final approval by the Scottish parliament.

The Welsh draft Budget for 2024-25 was published on 19 December 2023. The Budget sets out the Welsh government’s revenue and capital spending proposals, including detailed portfolio spending plans.

There have been no changes announced to the Welsh rates of Income Tax (WRIT) which will continue to be set at 10p for 2024-25. This means that the rates of Income Tax paid by Welsh taxpayers will continue to be the same as those paid by English and Northern Irish taxpayers in the new tax year.

This draft Budget does not include any proposed changes to the current Land Transaction Tax (LTT) rates. Two consultations on the future of LTT will, however, be launched at a later date. The Welsh government has also confirmed that the Landfill Disposals Tax (LDT) rates will continue to mirror the UK landfill tax rates in 2024-25.

The Welsh Government confirmed that they will cap the increase to the Non-Domestic Rates (NDR) multiplier in Wales to 5% for 2024-25. This is lower than the 6.7% increase which would otherwise apply from the default inflation of the multiplier in line with CPI. Retail, leisure and hospitality ratepayers (RLHRR) in Wales will receive a 40% non-domestic rates relief for the duration of 2024-5. The RLHRR scheme will continue to be capped at £110,000 per business across Wales.

The plans outlined in the Draft Welsh Budget will be debated in Senedd Cymru, the Welsh Parliament. Following scrutiny of these plans by Senedd Cymru. The Welsh Government will publish the Final Budget 2024-25 on 27 February 2024.