23
May

Can’t afford to pay your tax bill?

HMRC understands that taxpayers will sometimes experience difficulties with paying their tax bill and stress that taxpayers should make contact with them as soon as they realise that there is a problem. This is good advice as burying your head in the sand will only make matters worse.

Taxpayers should contact the Business Payment Support Service (BPSS) for practical advice and guidance. The BPSS was first launched back in 2008 and is available to all taxpayers (not just businesses). The purpose of the service is to provide support to those experiencing a wide range of tax problems.

The service offered by the BPSS depend on individual circumstances but could include:

  • agreeing instalment arrangements if you’re unable to pay your tax on time
  • suspending any debt collection proceedings
  • reviewing penalties for missing statutory deadlines
  • reducing any payments on account
  • agreeing to defer payments due to short-term cash flow difficulties

Any taxpayers that are having difficulties making VAT, Income Tax, National Insurance Contributions, Corporation Tax, and pay as you earn payments can contact the BPSS helpline on 0300 200 3835.

The BPSS will review the issues raised and look sympathetically at providing a practical solution. HMRC will not usually charge additional late payment surcharges in relation to specific arrangements made using the BPSS.

Read more

CGT base cost uplift on death

Special rules apply to assets when they are passed to a beneficiary after the death of the benefactor. In some cases Inheritance Tax may be due on the transfer. However, there can also be a hidden benefit known as a Capital Gains Tax (CGT) uplift on death (see details of the benefits below).

The CGT uplift mostly benefits a surviving spouse or civil partner. In this case, the transfer will be exempt from Inheritance Tax and the assets will be passed to the surviving spouse for CGT purposes at the probate market value. For example, a spouse may have invested in an investment property or portfolio of shares many years ago and built up a large, unrealised capital gain. The transfer of these assets on death will mean that the surviving spouse will be treated for CGT purposes as if they had acquired the assets concerned at the current market value on the date of their spouse’s death.

Planning note

The legislation only applies to assets, including shares, comprised in a person’s estate. There is no corresponding provision for assets which are the subject of a lifetime transfer. This ‘relief’ is obviously difficult to anticipate and proper planning must be put in place to ensure that assets qualify. It is important to take proper advice to consider any CGT and / or Inheritance Tax savings.

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    The Accountancy Practice is a Kent based firm specialising in small and medium sized businesses. We provide a friendly, professional service and regard our smallest client as important as our largest.
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