Author Archive: Muhammad Zia

Have you received a ‘remittance basis charge’ letter from HMRC?

Here’s what you need to know

HMRC has started sending out letters to high-net-worth taxpayers and their agents.

The letters will be sent to those who have been tax resident in the UK for 7 out of the last 9 years and 12 out of the last 14 years.

Why is HMRC writing?

These taxpayers have been identified as needing to pay the remittance basis charge (RBC) of either £30,000 or £60,000 – or alternatively move to the arising basis of taxation.

The letter explains the steps required and provides advance guidance when filing out 2021/22 Self-Assessment tax returns (SA109), making it clear than any amendments to a 2020/21 return should be done within 60 days. If no amendment is made, HMRC may open an enquiry to check the correct tax position.

The guidance is being clarified to make the Residence Domicile and Remittance Basis Manual (RDRM32220) clearer for taxpayers regarding the year count for remittance basis purposes.

It reinforces the position that as a taxpayer, you must be tax resident in the year of arrival, departure, and split year (or both) to count as a year of residence for remittance basis charge purposes.

The update ensures such years are accurately reflected in the year count and aids preparation of tax returns.

It is important to note that even if you are not liable to pay the RBC, if you have not declared any overseas income to HMRC, you must contact them to check if it needs to be declared to avoid being penalised.

Need help or advice?

If you are confused by HMRC’s latest guidance or need help and advice to prepare and submit your self-assessment tax return or calculate the correct remittance basis charge, please get in touch with the team at Rotherham Taylor today.

 

Have you renewed your tax credits?

According to HMRC, 323,700 customers are yet to renew their tax credits, with just one month left to do so.

Tax credits offer targeted financial aid to working families, so to ensure you receive what you are eligible for, it is crucial that you renew before the deadline of 31 July.

Failure to do so by this date will result in your payments coming to a halt.

How do you renew?

Tax credits can be renewed for free via GOV.UK by searching ‘tax credits’, or via the HMRC app.

Renewing online is a fast, simple process. By logging into GOV.UK, you can check on the status of your renewal, see that it is being processed, and know when to expect a response from HMRC.

The other option to consider is downloading the HMRC app on your smartphone. Through the app, it is possible to:

  • Renew your tax credits
  • Make changes to your claim
  • Check your tax credits payments schedule
  • Find out how much you have earned for the year.

To help, HMRC has provided a video to explain how tax credits customers can use the HMRC app to view, manage and update their information.

Have your circumstances changed?

If there is a change in your circumstances that could affect your tax credits claims, these changes must be reported to HMRC.

Circumstances that could affect tax credits payments include changes to:

  • Living arrangements
  • Childcare
  • Working hours
  • Income (increase or decrease).

It is also important to remember that tax credits will be replaced by Universal Credit by the end of 2024.

If you move from tax credits to Universal Credit, you could be at a financial advantage. To check this, you can use an independent benefits calculator.

For help and advice with related personal tax matters, please get in touch with our team today.