.png)
.png)
Time to pay
In an October 2020 press release, ‘Self assessment customers to benefit from enhanced payment plans’, (tinyurl.com/y2724s2r), HMRC said that taxpayers could pay tax due by 31 January 2021 by instalments. An online ‘self-serve’ application could be made by way of personal government gateway accounts. It seems that taxpayers have been having difficulty accessing this facility and HMRC has provided the following information:
‘In order to arrange a self-serve time-to-pay payment plan customers need to complete their 2019-20 tax return. They can fold in the July payment on account deferral, any outstanding balance for the 2019-20 tax bill and the January payment on account bill for the 2020-21 tax year into the payment plan.
‘The eligibility requirements are:
- they need to have no:
- outstanding tax returns;
- other tax debts; or
- other HMRC payment plans set up;
- the debt needs to be between £32 and £30,000; and
- the payment plan needs to be set up no later than 60 days after the due date of a debt.
‘There is a dedicated helpline that people can call, if they need to discuss their payment plan – self assessment payment helpline 0300 200 3822.’
Taxation magazine.
Wealth tax
I refer to the article ‘Wealth tax – worth the hassle?’ (Taxation, 3 December 2020, page 8) and am writing on this subject because the idea was floated a few years ago.
My opinion then was that this was one of the worst ideas ever and my views have not changed since. My objections are twofold. The first being that valuation can be extremely difficult and, in the case of high-worth individuals, can take a long time especially if a business is involved. Also, as regards the family home for example, I accept that a property in a street of identical houses presents no problem because there will be records of recent sales.
However, where I live it has become fashionable to buy a relatively older house, knock it down and replace it with something almost twice the size. Those newer houses sometimes sell for nearly twice as much as some of the smaller ones. So, for example, one of these larger houses has recently been sold for what I consider to be an extortionate figure but if a wealth tax was introduced would the valuer impose the same figure on his calculation of my assets?
Then again, if I were to sell my house soon after that valuation but at a considerably lower figure, would I receive a refund? And what would happen if the selling price was much greater?
My other objection is the principle that capital should not be used to fund expenditure which should come out of income. In this area it is not at all unusual for a couple to be worth in the region of £2m, so their annual wealth tax bill would be £10,000. Inevitably, almost all their wealth will be tied up in the family home and a business so where is that amount of money supposed to come from?
Further, in the event of the first death the survivor has only one allowance and so their annual bill would rise to £15,000.
As you may now imagine, I am not in favour of the idea at all.
David Turner.
