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.

HMRC have released more unusual excuses from taxpayers who failed to complete their self assessment tax return on time.
These include:

• 'My tax return was on my yacht…which caught fire' 
• 'A wasp in my car caused me to have an accident and my tax return, which was inside, was destroyed' 
• 'My wife helps me with my tax return, but she had a headache for ten days' 
• 'My dog ate my tax return…and all of the reminders' 
• 'I couldn't complete my tax return, because my husband left me and took our accountant with him. I am currently trying to find a new accountant' 
• 'My child scribbled all over the tax return, so I wasn't able to send it back' 
• 'I work for myself, but a colleague borrowed my tax return to photocopy it and lost it' 
• 'My husband told me the deadline was the 31 March' 
• 'My internet connection failed' 
• 'The postman doesn't deliver to my house' 

With the self assessment submission deadline of 31 January now past and an automatic penalty of £100 for failing to submit your return on time, please contact the team at Clay Shaw Butler if you need help bringing your affairs up to date.
The reasons above were all used in unsuccessful appeals against HMRC penalties for late returns.
Ruth Owen, HMRC Director General of Customer Services, said: “Blaming the postman, arguing with family members and pesky insects – it’s easy to see that some excuses for not completing a tax return on time can be more questionable than others. Luckily, it’s only a small minority who chance their arm.
‘But there will always be help and support available for those who have a genuine excuse for not submitting their return on time. If you think you might miss a tax deadline, get in touch with us - the earlier we’re contacted, the better.”
The deadline for sending 2015-16 Self Assessment tax returns to HMRC, and paying any tax owed, is 31 January 2017.
Self Assessment customers can now also submit their return via their Personal Tax Account, it takes five minutes to sign up for an account: www.gov.uk/personal-tax-account
More information on the latest excuses can be found at –
https://www.gov.uk/government/news/my-tax-return-was-on-my-yacht-which-caught-fire
If you are submitting your 2015-16 Self Assessment return online for the first time, you will need to register for SA Online.
Registering for online filing is simple – you can do it at: www.gov.uk/selfassessment
HMRC has previously announced that we will treat those with genuine excuses leniently, as they focus our penalties on those who persistently fail to complete their tax returns and deliberate tax evaders.
This remains the case, although the excuse must be genuine and HMRC might ask for evidence.
The 10 excuses listed above were all declined on the basis that they were either untrue or not good enough reasons.
Customers who provide HMRC with a reasonable excuse before the 31 January deadline can avoid a penalty after this date.
Help is available from the GOV.UK website at www.gov.uk/selfassessment or from the Self Assessment helpline on 0300 200 3310.
The penalties for late tax returns are: an initial £100 fixed penalty, which applies even if there is no tax to pay, or if the tax due is paid on time after three months, additional daily penalties of £10 per day, up to a maximum of £900 after six months, a further penalty of 5% of the tax due or £300, whichever is greater after 12 months, another 5% or £300 charge, whichever is greater.
There are also additional penalties for paying late of 5% of the tax unpaid at 30 days, six months and 12 months.
Follow HMRC’s press office on Twitter @HMRCpressoffice
In other news, there is a change that will impact residential landlords.
The amount of income tax relief available on residential property finance costs will be restricted to the basic rate of income tax.
This change will mean that landlords will no longer be able to deduct all of their finance costs from their property income.
They will, instead, receive a basic rate reduction from their income tax liability for their finance costs. The restriction in the relief will be phased in over a four year period as follows:

• in 2017/18, the deduction from property income will be restricted to 75% of finance costs, with the remaining 25% being available as a basic rate tax reduction; 
• in 2018/19, 50% finance costs deduction and 50% given as a basic rate tax reduction; 
• in 2019/20, 25% finance costs deduction and 75% given as a basic rate tax reduction; 
• from 2020/21, all financing costs incurred by a landlord will be given as a basic rate tax reduction. 

These rules do not apply to residential properties held in companies
In addition, rules may further restrict the relief which is due where the individual's property income or total income is less than the amount on which basic rate relief is due.
The computation is complex so please do get in touch with the team at Clay Shaw Butler if you would like to review your position.

You can find out more about money matters on the Clay Shaw Butler website (under our news for business section) -
http://www.clayshawbutler.com/news/latest-news-for-business
We have a strong and experienced team with great local knowledge all geared-up to helping you get the very best from your finances – whether that is as an individual or as a business.
We stay ahead of the game by putting great store by continual professional development for our staff.
With Investors In People status at Clay Shaw Butler, we care passionately about making sure our staff have all the tools they need to serve you, our customers.

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