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HMRC agent line
As if the world wasn’t mad enough, the HMRC agent dedicated line is now ending calls which are left on hold for more than ten minutes.
I have been in practice for 20 years and this is the first time this has ever happened. Previously, the call was left on hold until it was answered, now I am told ‘we are very busy at present, so please call in another time’. How on earth does HMRC expect agents to work effectively?
Have other readers experienced similar problems recently?
Jonathan Freeman FCCA.
Non-resident property disposal
I prepared a property disposal capital gains tax form (PPDCGT) for a non-resident client which had to be done manually despite the client having a personal tax account.
The form was posted to HMRC on 19 July 2022 and I chased up in September when no response had been received.
I recently had a reply from HMRC that ‘all mail is worked in date order and we have not yet processed it, once it is processed we will write to you with the outcome’.
This is most unsatisfactory, especially given that payment of any capital gains tax due cannot be made by the client until the return is processed.
Stephen Kattau.
National Insurance contributions burden
Great article by Rebecca Benneyworth – ‘Never simple’, Taxation, 4 August 2022, page 10 – but what we all now need urgently is some advice as to how to assist our clients with 30 April or 30 June year ends to be able to afford the grossly unfair and unnecessary tax burden that the government is imposing.
A self-employed person with assessable income of £30,000 in 2022-23 and paying tax and National Insurance of £5,504.23 will see their tax rise to £7,167.98 (a 30.22% increase for the next five years). At a time when people are facing £4,000 fuel bills plus increased food bills plus increased mortgage repayments, will somebody please tell us how to prepare the self-employed for this and whether they will qualify for social security to pay the tax on an artificially enhanced unreal income?
Does social security work with the real income or the fictitious assessable income? Real income is £30,000 and fictitious extra income is £5,500. HMRC accepts that at least 528,000 self-employed people will suffer as a result.
In the main there is little scope for overlap relief when a business starts with little or no profit in the first few years. I am not going to start on the unnecessary costs of making tax digital, but it is clear that the combination of all these costs will destroy thousands of businesses.
While all the self-employed know that extra tax would one day have to be paid when they got to retirement, that would be at a time when no National Insurance would be due and there would be no higher rate tax either as income would lessen in retirement.
My clients cannot sleep at night with the worry of it all. They have all written to their MPs, but without any helpful or understanding response.
The additional tax can be reconciled as follows:
Old tax: £5,504.23
New tax: £7,167.98
Increase: £1,663.75
National Insurance rate: 10.25%
Income tax rate: 20% (personal allowances already used and not in higher rate)
Total effective rate: 30.25%
1,663.75/30.25% = £5,500
In other words the taxpayer will be taxed on £5,500 extra profit each year. That is based on a 30 April year end so profits which will be subject to the catch up charge will be £30,000* 11/12 = £27,500 – spread over five years this is an extra £5,500 profits charged per year.
Alan G Poole.
