A substantial package of measures to help and support businesses and individuals in their dealings with Government was set out by the Chancellor today.
The measures include:
– A 30 million pound package of increased support for small businesses running a payroll including expansion of the New Enterprise Support Initiative (NESI) helpline and doubling the number of Business Support Teams (BSTs) from April 2000.
– Improvements to the Self Assessment system including; easier and more convenient ways to pay; clearer self assessment statements; and, from April 2000, no longer asking up to 400,000 more people on lower incomes to fill in self assessment forms.
– A new page on the Inland Revenue’s website – Taxback – for savers on low incomes with bank or building society interest.
– Proposals for simplifying tax and National Insurance Contributions technical rules and procedures for employers, including proposals for common and appropriate powers for Inland Revenue officers.
– Measures to encourage small business to invest in Information and Communication Technology equipment and embrace E-commerce.
These build on the significant support available through Inland Revenue offices and helplines for people to get help or check that they have paid the right amount.
More support for small employers from April 2000
The Inland Revenue will spend 30 million poundsover the next two years to expand the range of help available on payroll issues.
Building on the successful introduction of the New Enterprise Support Initiative (NESI) which was launched last year the Inland Revenue will:
– Increase both the size and the scope of the work carried out by the helpline for new employers to offer a payroll support service over the phone.
– Double the size of the Inland Revenue Business Support Teams who will:
– offer new and small employers a visit by the Business Support Teams to talk the employer through various payroll issues
– offer a detailed ‘health check’ of an employer’s payroll systems to see whether they are robust and reliable, and that the employer understands how to use them properly
– offer further one-to-one visits to help where there is evidence that the new employer is getting into difficulty; and
– look to make effective links between the BSTs and the help and assistance that will be available from the Small Business Service (SBS).
Getting payroll records in order
The Inland Revenue offers a free service to all employers to ensure payroll records are in order. It is a fast and efficient method of ensuring that errors in employee’s personal details and National Insurance Numbers are identified and corrected before the employer needs to make the End of Year Returns.
Employers can ask for their payroll records to be cross-checked with Inland Revenue records. The Inland Revenue then pursues any discrepancies identified in this data with the individual employees directly, and appropriate amendments made. An employer whose records have been checked will have more accurate payroll records leading to fewer errors on End of Year Returns.
Self Assessment (SA) improvements
A number of improvements to ensure the Self Assessment system works efficiently and fairly were announced to day. These are the result of ongoing work the Inland Revenue is doing involving taxpayers and their representatives,
– Easier and more convenient ways to pay. – The Inland Revenue plan to mount national schemes as soon as possible to enable all SA taxpayers and employers to pay by Debit Card over the telephone or the Internet, or on account by direct debit if they want to
– Clearer forms and making statements easier to understand. – The first revised statements were issued in January following feedback from customers – with further refinements to be included in the June 2000 issues.
– Opening enquiry notices. – The Inland Revenue will be consulting with representative bodies on a revised version of the formal notice opening an income tax Self Assessment enquiry. This is to address concerns that the present version is unnecessarily ‘threatening’.
– Reducing the numbers of people who have to complete tax returns. – By raising the monetary threshold for bringing PAYE taxpayers with minor sources of income into Self Assessment, up to 400,000 people, about half of whom are pensioners, could be taken out of SA from this April if their tax affairs are up to date. The Inland Revenue will continue to keep the criteria for bringing people into Self Assessment under review.
The new Taxback website page is for savers with bank or building society interest who do not have to pay tax or who have very little tax to pay. It tells them how to work out if they may be eligible to claim back all or some of the tax that banks and building societies have to take off interest. Then it explains how to claim back any repayment of tax due. The new website page also provides information for non- taxpayers about how to tell their bank or building society not to take tax off in future. Useful telephone numbers are given for anyone who would like some help.
This is the first step in an Inland Revenue Taxback campaign that will run throughout the year 2000, culminating with a high profile theme week in the autumn. Other events are planned throughout the year. Details will be announced later.
The Inland Revenue have produced a new updated and clearer version of its “Income tax and pensioners ” leaflet. The new leaflet brings together in one place information that is likely to be of most interest and use to pensioners
Simpler National Insurance Contributions procedures for employers
The Inland Revenue will be publishing for consultation this Spring proposals for simplifying some of the aspects of National Insurance Contributions (NICs) that create complexity and worry for employers and their payroll administrators. These will include giving employers more time to deal with particular difficult payments and providing simplified arrangements for accounting for NICs paid on behalf of employees seconded abroad.
And the Inland Revenue will set out options for ensuring that its officers have common and appropriate powers for their examination of employers’ tax and NICs records.
Research and consultation
To help business and individuals to “get it right” it is important that Government identifies and addresses the conditions that lead to businesses and individuals not complying. A number of ongoing research and consultation exercises will help Inland Revenue and Customs and Excise to promote compliance and ease administrative obligations. These include:
– A joint 4 year programme of research by Inland Revenue and Customs and Excise to understand business compliance costs
– Commissioning two pieces of research on payroll, the first looking at the practical problems experienced by new and small employers and the second looking at the scope for Internet filing to reduce payroll costs
– Listening to and working with taxpayers and their representatives.
Further help for small business
The substantial package of further help to small business announced by the Chancellor today (REV/CE1), includes a number of measures to incentivise small business to make more use of IT to increase their efficiency and cut their costs. The measures include 100% first year capital allowances for small businesses that invest in Information and Communication Technology equipment (computers, software and internet-enabled mobile phones) over the next three years and a 60 Million pounds expansion of Government electronic services to help SME’s get on line and use online services. The Chancellor also announced an extension to the discounts available to small employers who file and pay via the Internet (REVxx) and the Inland Revenue published a Payroll Software standard today to encourage small employers to use accredited software to calculate their payroll.
NOTES FOR EDITORS
The Government is determined to do as much as possible to keep regulatory requirements on small business to a minimum and wherever possible to reduce them. The Inland Revenue and Customs and Excise will continue to offer small business and individuals practical help and support them in their dealings with Government.
It is particularly important to make it as easy as possible for businesses and individuals to claim their entitlements and to comply with their obligations under the law while keeping their costs to a minimum. If at any time people think they have not paid the right amount of tax or National Insurance Contributions for this or a previous year they should approach the Inland Revenue with the necessary evidence and claim the repayment.
More support for small employers
The outline of the expansion of the NESI helpline and Business Support Teams was announced on 11 November in a joint Inland Revenue/DTI Press Release.
Further details on today’s detailed announcement can be obtained from the NESI helpline – 0845 60 70 143.
Building societies, banks and other deposit-takers are required by law to deduct income tax from the interest they pay to savers. Tax is deducted at 20%. There are some exceptions.
Anyone whose income is below the taxable limit does not have to pay tax. People who can say in advance that their income will be below the taxable limit can register to get their interest paid without tax taken off. The majority do so. Many other people claim back the tax they are not due to pay. But some savers who are eligible to register or to claim tax back do neither. This campaign is aimed at raising awareness about Taxback and encouraging savers to take action to claim back tax and/or to register if they are able to do so. Representative organisations such as The Low Incomes Tax Reform Group, Age Concern and Help the Aged are being consulted, as well as the British Bankers’ Association and The Building Societies Association.
The Taxback website page can be accessed at www.inlandrevenue.gov.uk/taxback.
Getting Payroll records in order
To register for this service Employers should contact either Customer Account Services in Kings Lynn on 0155 36 66 866 or Customer Account Services in Newcastle on 0191 22 56 110 who can supply appropriate employers packs and advice on reference of data by paper or specific IT mediums.
Joint research programme
Inland Revenue and Customs and Excise have embarked on a 4 year programme of research to understand business compliance costs. This will cover the costs to business of dealing with VAT, Income Tax Self Assessment and Corporation Tax Self Assessment. The results of this research will help identify those areas of the tax system that are most burdensome to business and enable the Revenue Departments to look for ways of making improvements in those areas.
The Revenue, with the support of the DTI, has commissioned KPMG to undertake a major piece of research on the practical problems experienced by new and small employers. This innovative study will look at 200 employers at different stages of the annual payroll cycle. The aim of the research is to report in detail on what exactly employers find to be the main stumbling blocks, and what is preventing them from complying with their responsibilities accurately and on time. The results are expected in October and will be used to set in train a programme of work for the Revenue, aimed at providing employers with better information and guidance at the right time, and where practicable, simplified procedures.
Savings to Employers from Internet Filing
The Inland Revenue has awarded a small compliance cost contract to Bath University to study the scope for Internet filing to reduce employer compliance costs associated with the end of the year process for forms P14s and P35s. This study will concentrate on the opportunities for using Internet filing to produce faster validation of returns, certainty of receipt and other ease of use benefits which are expected to reduce compliance costs of employers using payroll software – and provide an incentive to manual filers to use the Internet. This study is expected to report during the autumn.
Listening to taxpayers
Correspondence and complaints about the system, statistical information from the annual customer surveys and feedback from bodies such as contact centres and regional consultation panels are to be brought together and evaluated centrally so that they can have a real impact on the planning of future services.
Working with taxpayers and their representatives
The Inland Revenue is co-operating with the main professional bodies of tax practitioners in an innovative exercise to improve the quality of their members’ tax work and so the service they give to their clients in preparing their self assessment tax returns. On a trial basis, where the Revenue identifies practitioners making persistent errors in their clients’ returns, they will, if the problem cannot be resolved by direct discussion, pass the name of the member and details of the matters of concern to the professional bodies to consider what help and support the member needs to improve their standards. It will not be possible for those bodies to identify individual clients from the information provided.
From April 2000 the Chartered Institute of Taxation (CIOT), the Institute of Chartered Accountants (England and Wales) (ICAEW), and the Inland Revenue will launch ‘Working Together’ – a scheme for strengthening local liaison between practitioners and Revenue offices. Building on established links they will introduce fast track mechanisms to identify issues at local level that could have a national impact. This will provide for quicker and more flexible resolution of problems.
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