The latest Clay Shaw Butler Money Matters column from the Carmarthenshire Herald
The latest Clay Shaw Butler Money Matters column from the Carmarthenshire Herald.
By Mark Jones, director of Carmarthen-based Clay Shaw Butler chartered accountants and business consultants.
The Office for National Statistics has announced that the UK tax gap fell in 2014/15 to its lowest ever level of 6.5%.
The press release confirms that the UK tax gap (the difference between the amount of tax due and the amount collected) is one of the lowest in the world.
HMRC have reduced the tax gap from 8.3% in 2005/06.
If the tax gap had remained at the 2005 to 2006 level of 8.3%, it would have grown to £47 billion and the country would have been £11 billion a year poorer.
HMRC believe that the tax gap has fallen, in part, due to digital reporting.
In particular Real Time Information reporting for the PAYE system has led to more accurate recording of information on payroll taxes, and the shift to VAT online has helped bring the VAT gap in 2014/15 to its lowest level of 10.3% (£12.7 billion).
The Financial Secretary to the Treasury, Jane Ellison said:
“This government is committed to tackling tax evasion and avoidance wherever it occurs.
“The UK has one of the lowest tax gaps in the world.
“By investing £1.8 billion since 2010 in boosting HMRC compliance capabilities, we've brought our tax gap down to its lowest ever level.
“And to make it even easier for people to pay the right tax in the future, we've invested £1.3 billion in new digital tools.”
Meanwhile, the government has announced that it is shelving plans to allow pensioners to sell their annuities for a lump sum.
Many experts had predicted that those who sold their annuities would be likely to get a poor deal and the government has decided not to take forward the plans to introduce a secondary annuities market because the consumer protections required could undermine the market's development.
It has become clear that creating the conditions to allow a competitive market to emerge could not be balanced with sufficient consumer protections.
The Economic Secretary to the Treasury, Simon Kirby, said:
“Allowing consumers to sell on their annuity income was always dependent on balancing the creation of an effective market with making sure consumers are properly protected.
“It has become clear that we cannot guarantee consumers will get good value for money in a market that is likely to be small and limited.
“Pursuing this policy in these circumstances would put consumers at risk - this is something that I am not prepared to do.
“The government has always been clear that for the majority of people keeping their annuity incomes will be their best option, estimating that only 5% of people who currently hold an annuity would take advantage of this reform.”
In other news, the following Tax Events are due on 19th November 2016:
PAYE, Student loan and CIS deductions are due for the month to 5th November 2016.
This deadline is relevant to employers who have made PAYE deductions from their employees' salaries and to contractors who have paid subcontractors under the CIS.
Employers are required to make payment to HMRC of the income tax, national insurance and student loan deductions.
Contractors are required to make payment to HMRC of the tax deductions made from subcontractors under the CIS.
Where the payment is made electronically the deadline for receipt of cleared payment is 22nd November 2016. In year interest will be charged if payment is made late. Penalties also apply.
You can find out more about money matters on the Clay Shaw Butler website (under our news for business section) -
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