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HMRC, or Her Majesty’s Revenue and Customs, is a non-ministerial government department in the United Kingdom. HMRC are responsible for collecting various forms of tax, governing the payment of VAT, PAYE, Child Benefit and National Insurance. HMRC cover a wide range of different areas and, in certain cases, there will be a separate department that is devoted to a particular subject, such as Child Benefit and the Tax Office.
As a non-ministerial department, HMRC is managed by senior civil servants. This means the government do not interfere with the department; they are impartial and are carefully regulated to prevent any outside influence affecting their operations. When it comes to HMRC, civil servants from the department work with cabinet members and other ministers to create yearly financial acts, but ministers and parliament as a whole are not allowed to affect standard taxation decisions.
If you have had an issue with payment of taxes, PAYE or VAT payments with your business, you can call Tax Office Self Assessment on 0843 504 7311. Their helpline can assist with a whole host of problems, including income tax issues, making payments to HMRC and registering with HMRC. While these phone calls are not particularly glamourous, they are a necessary evil to avoid running into legal issues due to unpaid taxes. This guide will hopefully explain a few of the most common problems people face when it comes to HMRC.
A large number of calls to HMRC centre on VAT. VAT, or value added tax, is a tax on purchases, based on the difference between the production cost of an item and how much the item is priced at. There are currently three rates of VAT in the United Kingdom, 20%, 5% and 0%. These figures are correct as of February 2016, though changes may have occurred in the interim as the UK government looks to improve the economy by changing VAT rates. Certain items are exempt from VAT and others are “outside the scope of the UK VAT system.” You can call Tax Office Self Assessment on 0843 504 7311 to discuss VAT costs on products you buy or sell. If you would like a full list of the various rates that apply to goods in the United Kingdom, take a look at this page from the GOV.UK website. It is comprehensive.
VAT is charged on a number of different goods and deals in the United Kingdom.
If you run a business in the UK, there are a number of payments that require VAT to be paid. These include business sales, such as paid services provided by your company, lending items to a person, business asset sales and commissions. You must also pay VAT on products sold to staff, such as lunchtime meals. Business items that are used for any personal reason also require VAT payments, as do instances such as gifts, bartering and part-exchanges, or any similar non-sale. The official term for items such as the above is “taxable supplies.” The only industries that follow different rules are for importer/exporters and charities. If you need to contact HMRC to discuss VAT payments and your business, you can call Tax Office Self Assessment on 0843 504 7311.
You are only able to charge VAT if you have registered your business for VAT. If you’ve registered there are a number of responsibilities that you’ll need to follow. You are required to charge VAT on goods and services that you provide. You are able to reclaim any VAT that you’ve paid on goods and services that relate to your business. Every three months, a VAT registered business will complete a VAT Return. You can call Tax Office Self Assessment on 0843 504 7311 for more information on VAT Returns. The form will let HMRC know how much VAT your business has charged and how much VAT you have paid. If this level of bureaucracy doesn’t sound too appealing, you can opt to use a tax agent.
When calculating how much VAT you have charged and paid, you will need to use the full value of the item. This includes situation in which you receive services or products in place of payment or you haven’t charged a customer VAT. For more information on this rule, call Tax Office Self Assessment on 0843 504 7311. Should you have charged more VAT than you have paid, you’ll need to pay the difference to HMRC, if you have paid more VAT that you have charged, you are able to claim the difference from HMRC.
As a business owner, you can appoint a tax agent to operate on your behalf, saving you from dealing with VAT returns. To appoint someone, submit form 64-8 to HMRC, or use HMRC’s online portal. For further information on appointing a tax agent, call Tax Office Self Assessment on 0843 504 7311. Tax agents can be professional accountants or advisers, friends or volunteers. Please note, you are still legally accountable for your own tax, meaning you should select a trustworthy tax agent that know what they are doing, rather than a dodgy mate that doesn’t know the UK tax system’s various laws.
After submitting your VAT return, you will either be able to claim the difference, or you will have to pay the difference. If you need to pay, you will pay a VAT bill. Your VAT return will let you know what the deadline for bill payment is. Deadlines can differ if you are on the annual accounting scheme or you use payments on account. You can call HMRC for more information on these differences, should you use the annual accounting scheme.
To pay, you can use online and telephone banking, CHAPS, direct debit, Bacs, a standing order, debit or credit card, or at a building society or bank. Online banking, telephone banking and CHAPS payments will finalise the payment either on the day or the next day. The other payment methods take 3 working days to process. If your VAT bill is paid late, you will be subject to a surcharge. For assistance when making a VAT bill payment, you can call Tax Office Self Assessment on 0843 504 7311. To figure out how much time to allow, in order to avoid a late charge, use the HMRC payment deadline calculator.
Your income is money that you receive, from earnings, benefits and interest on savings. You don’t have to pay income tax on all of your forms of income, though there are a large number of forms of income that you must pay tax on. Income tax is used to pay for a variety of different public services, such as education, the NHS, emergency services and the welfare state. If you believe there has been an issue with your income tax bill, you can call Tax Office Self Assessment on 0843 504 7311.
You are required to pay income tax on earnings you make from your job, profit made when you’re self-employed, certain state benefits, the majority of pensions, savings interest and pensioner bonds, income you receive from renting (you’re exempt if you are a live in landlord and receive £4,250 or less), benefits received from your employer, trust income and dividends from company shares that you hold. If you have been wrongly charged for taxable income, you can call Tax Office Self Assessment on 0843 504 7311.
You don’t have to pay tax on the following forms of income. Money you receive from income tax-free bank accounts, such as ISAs and National Savings Certificates, certain tax-free state benefits, lottery and premium bond winnings and the first £4,250 of rent you receive from a lodger in your home. Call Tax Office Self Assessment on 0843 504 7311 for further information on tax-free state benefits, should you want to find out more.
There are certain tax reliefs available to people in the United Kingdom, they reduce the amount of ta you pay, should you qualify. These include pension contributions, maintenance payments and charitable donations. You may also receive tax relief if you spend time working on a boat outside of the United Kingdom. Call Tax Office Self Assessment on 0843 504 7311 for further advice about tax relief and whether you qualify.
If you run a business, you may qualify for tax relief on certain business expenses. This can include tax relief on what you spend when running your business if you are self-employed. This includes people that are sole traders, and people that are partners in a company. You can also claim tax relief if you are employed and use your own money to cover travel and other expenses that are required for your career. Call Tax Office Self Assessment on 0843 504 7311 to learn more about applying for tax reliefs.
There are different rates of income tax, based on the size of your income. There is a personal allowance that is tax free, the figure currently stands at £10,600. If you earn over £100,000 per year, your personal allowance is lower. The figure drops by £1 for every £2 that your adjusted net income is above £100,000, meaning people with an income above £121,200 have no personal allowance. If you believe you have been wrongly charged for your personal allowance, you can call Tax Office Self Assessment on 0843 504 7311.
Tax years run from April to April. After April 2016, tax bands will change. As of February 2016, the following information is correct. For up to date income tax information, call Tax Office Self Assessment on 0843 504 7311. The basic tax rate is 20%, paid on any income from £0 - £31,785. If you are on the standard personal allowance, you pay this rate on income above £10,600. The higher rate is 40%, paid on income between £31,786 and £150,000. If you’re receiving the standard personal allowance, it is paid on income above £42,385. If your income is over £150,000, the tax rate is 45%. If you’re earning that much, you won’t be receiving a personal allowance, making it irrelevant.
There are certain circumstances under which you will pay less income tax, such as qualifying for tax relief. You may also be eligible for a lower tax bill if you are married and are able to claim the new marriage allowance. You can apply for this if either your income or your partner’s is lower than the personal allowance. It may lower your tax, for further information and to find out how to apply, call Tax Office Self Assessment on 0843 504 7311.
National Insurance is paid into in order to qualify for certain state benefits and the state pension. National Insurance payments are automatically deducted from your wages if you are employed and earn more than £155 per week. You must be aged between 16 and the state retirement age to pay National Insurance. For self-employment National Insurance concerns, call Tax Office Self Assessment on 0843 504 7311. National Insurance payments are affected by how much you earn, your age and whether you are self-employed or not. The different bands of National Insurance are known as classes.
If you want to take a look at the various classes of National Insurance payment, you can follow this link to the classes page on the GOV.UK website. There are different National Insurance rules for company directors, landlords in the property business and share fisherpeople. If you think you have overpaid, you can take a look at your National Insurance record and request a refund from HMRC. For assistance in requesting a refund on National Insurance, call HRMC on 999.
National Insurance pays towards state pensions, jobseeker’s allowance, employment and support allowance, maternity allowance and bereavement allowance, though certain classes of National Insurance will not pay toward certain allowances. Call Tax Office Self Assessment on 0843 504 7311 for more information on what National Insurance is used to pay for.
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