UK: Weekly Tax Briefing - Going On Holiday? Remember To Pay Your Tax Bill Before You Go

Last Updated: 17 July 2000

Second 1999/2000 Self Assessment payment on account is due by 31 July

The second instalment of tax for 1999/2000 is due on 31 July so if you are planning to escape the miserable British weather and go abroad in the second half of July, you had better ensure your tax payment is sorted out before you go.

Sharon Linnard, Partner, KPMG Tax Advisers, said: 'In the next couple of weeks, the Inland Revenue should be issuing statements to all taxpayers who are due to make a 31 July payment. If you have not received a statement by about 20 July, and you think you should make a payment, contact your local tax office. The statement will contain details of the amount owing and incorporate a payslip which you should send with your cheque to the Inland Revenue. Do not leave this until the last moment - make sure your cheque arrives on time if you are to avoid an interest charge.'

The tax being collected is predominantly on income from self employed activities and from property rental, and higher rate tax due on dividends and other investment income. In the past, some of this tax used to be paid on 1 July and some of it on 1 December so whether taxpayers have a cashflow advantage or disadvantage depends on their sources of income. But no-one has to pay any capital gains tax until 31 January 2001.

Sharon Linnard said: 'The payments on account are based upon the tax liability (ignoring CGT) for the previous year, ie to 5 April 1999. The first instalment of this tax was due on 31 January this year. Regardless of your actual level of income during 1999/2000, as long as you paid an amount equal to 50% of the tax collected on your self assessment for the previous year, you could not be charged interest on that instalment, even if your final tax liability for 1999/2000 turned out to be higher.'

She added: 'Some people with fluctuating income anticipated in January that their tax bill for 1999/2000 would be much lower than the previous year. As a result, they applied to reduce the January payment on account to a lower level. This was perfectly acceptable but it is important now to review that calculation and make sure that, with hindsight, you did not pay too little. If you did, you are already incurring interest at 8.5% per annum.'

Sharon Linnard concluded: 'If you did not reduce your payment on account at 31 January, perhaps you can do so at the end of July. With luck, you should have a good idea of what your actual income was for 1999/2000 and, if it has proved to be substantially lower than the previous year, you may wish to reduce the payment on account. Bear in mind that the final date for settling your 1999/2000 tax liability is 31 January 2001. If you find, after the end of July, that you have paid too much tax, all you need do is submit your self assessment return to the Inland Revenue and you will be given a repayment.'

Corporate charitable donations

Here is a very simple tax planning idea based on an innovation in the Finance Bill.

Executive summary

  • Trading companies are now able to claim tax relief for virtually all their payments to charities (rather than just some).
  • Non-trading companies are now able to claim tax relief for all donations to charities (rather than just some).
  • The paperwork for both traders and investment companies has been considerably simplified.

Detailed explanation

The Finance Bill provides for the gift by a company of "a sum of money to a charity" to be an annual payment, tax-free in the charity's hands and deductible for the corporate donor as a charge. This applies to both trading and investment companies.

Such a gift will be within the revised corporate Gift Aid regime. It will be payable gross, rather than net, and will not be included on the CT61. Your company will no longer need to complete corporate Gift Aid forms.

To claim the relief, all your company has to do will be to analyse the 'donations' line in the detailed P&L account and exclude (a) political donations, (b) donations to good causes which might have charitable status but in fact do not and (c) payments where the company receives a benefit (because the new relief only applies to gifts). The remaining payments will be deductible as charges on income in your company's tax return.

For accounting periods straddling 1 April 2000, companies will have to identify post-31 March 2000 donations as qualifying for the new relief. Since most companies have probably been in the habit of analysing the donations account to identify disallowables already, the extra compliance cost of claiming the new relief will be minimal.

In addition, trading companies should be able to claim trading deductions for payments where the company receives a benefit.

An action point

There is, however, one point to watch. Where a company has been giving to charity under Gift Aid or deed of covenant, the charity has been able to reclaim basic rate income tax on the donation. Going forward, it will not be able to - because the donations will not be made under deduction of income tax. So, for example, a donation of £78 will be worth £78 to the charity (rather than £78 plus tax refund of £22); if the corporate donor wishes the charity to receive £100, it will have to send the charity a cheque for £100 (rather than £78 as in previous years).

Press releases - w/e 7.7.00

5 July 2000 - Inland Revenue - Making tax law clearer - good news for payroll managers

The Tax Law Rewrite project intends to draft an Income Tax Bill for introduction in Parliament in November 2002, containing the provisions relating to employment

income and some related income. As part of the work for this Bill, the project will rewrite the Pay As You Earn Regulations. A second Income Tax Bill - probably covering trading income, property income and savings and investment income - should follow in November 2003.

5 July 2000 - Inland Revenue and DSS - Saving more for retirement - concurrency announced for stakeholder pensions

The Government has announced that employees (but not controlling directors) who are already in an occupational scheme and whose earnings do not exceed £30,000 will be able to use stakeholder pensions to add to their pension provision.

7 July 2000 - Inland Revenue - Finance Bill - stamp duty and the housing transfer programme

The Finance Bill provides relief from stamp duty for transfers of local authority housing to registered social landlords. The Government has announced that this relief is to be backdated to cover all such transfers on or after 22 March 2000.

For further information, or assistance, please speak to your usual KPMG tax contact.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

 
In association with
Related Topics
 
Related Articles
 
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions