Welcome to the April newsletter that brings you the latest news, updates and information on tax, financial and accounting matters that may affect you or your business.
We start this month with a piece about HMRC having done a U-turn on the proposed closure of its tax helplines which will remain open as usual for now. This about-turn is a reflection of its move towards greater self-service versus a public requirement for human advisers. You can check the status of your NI contributions online - find out how below - a very useful thing to do if you believe you have any payment gaps. If you haven’t already, and it’s relevant to your financial situation, there’s still time this month to register for Marriage Allowance. It is well worth reading through our article on tax on savings interest, especially if your total income is less than £17,570. We conclude, as always, with some useful deadlines that apply for April and May 2024.
HMRC has been forced into an embarrassing climbdown on plans to close the Self-Assessment, VAT and PAYE helplines from early April until September this year. HMRC has now confirmed that these helpline changes have been abandoned following feedback from many concerned stakeholders, including MPs, accountants and members of the public. This means that the helplines will remain open as usual for the time being.
However, these moves indicate that a significant shift towards online self-service options will become the norm in the longer term. HMRC has also said that they will continue encouraging customers to self-serve where possible and access the information they need more quickly and easily by going online or to the HMRC app, which is available 24/7.
HMRC’s Chief Executive said:
‘Making best use of online services allows HMRC to help more taxpayers and get the most out of every pound of taxpayers’ money by boosting productivity.
Our helpline and webchat advisers will always be there for those taxpayers who need support because they are vulnerable, digitally excluded or have complex affairs.
However, the pace of this change needs to match the public appetite for managing their tax affairs online.
We’ve listened to the feedback and we’re halting the helpline changes as we recognise more needs to be done to ensure all taxpayers’ needs are met, whilst also encouraging them to transition to online services.’
There is an online service available on HMRC to check your National Insurance Contributions (NIC) record online. The service is available at https://www.gov.uk/check-national-insurance-record
In order to use this service, you will need to have a Government Gateway account. If you do not have an account, you can apply to set one up online.
By signing in to the 'Check your National Insurance record' service you will also activate your personal tax account if you have not already done so. HMRC’s personal tax account can also be used to complete a variety of tasks in real time such as claiming a tax refund, updating your address and completing your self-assessment return.
Your National Insurance record online will let you see:
In some circumstances it may be beneficial, after reviewing your records, to make voluntary NIC contributions to fill gaps in your contributions record to increase your entitlement to benefits, including the State or New State Pension. If you would like to discuss this further, please do not hesitate to be in touch.
The marriage allowance applies to married couples and those in a civil partnership where a spouse or civil partner does not pay tax or does not pay tax above the basic rate threshold for Income Tax (i.e., one of the couples must currently earn less than the £12,570 personal allowance for 2024-25).
The allowance works by permitting the lower earning partner to transfer up to £1,260 of their personal tax-free allowance to their spouse or civil partner. The marriage allowance can only be used when the recipient of the transfer (the higher earning partner) does not pay more than the basic 20% rate of income tax. This would usually mean that their income is between £12,571 and £50,270 during 2024-25.
For those living in Scotland this would usually mean income currently between £12,571 and £43,662.
Using the allowance, the lower earning partner can transfer up to £1,260 of their unused personal tax-free allowance to a spouse or civil partner. This could result in a saving of up to £252 for the recipient (20% of £1,260), or £21 a month for the current tax year.
If you meet the eligibility requirements and have not yet claimed the allowance, then you can backdate your claim as far back as 6 April 2020. This could result in a total tax break of up to £1,256 if you can claim for 2020-21, 2021-22, 2022-23, 2023-24 as well as the current 2024-25 tax year. If you claim now, you can backdate your claim for four years (if eligible) as well as for the current tax year.
HMRC’s online Marriage Allowance calculator can be used by couples to find out if they are eligible for the relief. An application can then be made online at GOV.UK.
If you have taxable income of less than £17,570 in 2024-25 you will have no tax to pay on interest received. This figure is calculated by adding the £5,000 starting rate limit for savings (where 0% of the interest is taxable) to the current £12,570 personal allowance. In addition, there is a Personal Savings Allowance (PSA). This allowance ensures that for basic-rate taxpayers the first £1,000 interest on savings income is tax-free (effectively allowing qualifying basic-rate taxpayers to receive up to £18,570 in tax-free interest per year). For higher-rate taxpayers the tax-free personal savings allowance is £500. Taxpayers paying the additional rate of tax on taxable income over £125,140 cannot benefit from the PSA.
It is important to note that if your total non-savings income exceeds £17,570 then the starting rate limit for savings is unavailable. There is a tapered relief available if your non-savings income is between £12,570 and £17,570 whereby every £1 of non-savings income above a taxpayer's personal allowance reduces their starting rate for savings by £1.
Interest from savings products such as ISA's and premium bond wins do not count towards the limit. Taxpayers with tax-free accounts and higher savings can still continue to benefit from the relevant PSA limits.
Banks and building societies no longer deduct tax from bank account interest as a matter of course. Taxpayers who need to pay tax on savings income are required to declare this as part of their annual self-assessment tax return.
Taxpayers that have overpaid tax on savings interest can submit a claim to have the tax repaid. Claims can be backdated for up to four years from the end of the current tax year. This means that claims can still be made for overpaid interest dating back as far as the 2020-21 tax year. The deadline for making claims for the 2020-21 tax year is 5 April 2025.
1 April 2024 - Due date for corporation tax due for the year ended 30 June 2023.
19 April 2024 - PAYE and NIC deductions due for month ended 5 April 2024. (If you pay your tax electronically the due date is 22 April 2024).
19 April 2024 - Filing deadline for the CIS300 monthly return for the month ended 5 April 2024.
19 April 2024 - CIS tax deducted for the month ended 5 April 2024 is payable by today.
30 April 2024 - 2022-23 tax returns filed after this date will be subject to an additional £10 per day late filing penalty for a maximum of 90 days.
1 May 2024 - Due date for corporation tax due for the year ended 30 July 2023.
19 May 2024 - PAYE and NIC deductions due for month ended 5 May 2024. (If you pay your tax electronically the due date is 22 May 2024).
19 May 2024 - Filing deadline for the CIS300 monthly return for the month ended 5 May 2024.
19 May 2024 - CIS tax deducted for the month ended 5 May 2024 is payable by today.
31 May 2024 - Ensure all employees have been given their P60s for the 2023/24 tax year.