Don't panic about penalties
If you receive a late filing penalty from HMRC, there is a one in three chance that it is wrong, and you can get it cancelled.

We know that HMRC cancels more than a third of the penalties it issues each year; it says this is because the taxpayer has  successfully claimed a reasonable excuse for late filing. However, a high proportion of the late filing penalties are issued incorrectly as the tax return was actually submitted by the set deadline.

We are expecting the HMRC computer to issue a large number of late filing penalties automatically for last year’s tax returns, as lots of paper returns were submitted after the paper filing deadline of 31 October 2017. These paper returns were necessary because the electronic route was blocked by HMRC’s computer, which couldn’t cope with ‘unusual’ combinations of income and allowances for the 2016/17 tax year.

Taxpayers who were forced to submit ‘late’ paper returns will have a reasonable excuse, but that has to be claimed, either with the return or by appealing against the automatic penalty.

We can help you submit an appeal against any late filing penalty you receive from HMRC.
Paying employees on sleep in shifts
Certain care workers undertake sleep-in shifts while on duty overnight. Such workers were commonly paid a flat amount for each sleep-in shift, which would be less than the hourly National Minimum Wage (NMW) rate.

An employment tribunal has now ruled such workers must be paid at least the NMW for time spent on sleep-in shifts. HMRC is enforcing that ruling with the penalties applied for periods from 1 November 2017. However, employers may be required to pay arrears of underpaid wages for sleep-in shifts from an earlier date, such as 1 April 2017.

If you are one of those employers, you should register for the government’s social care compliance scheme, which will give you further assistance to comply, such as:
• PAYE guidance on NMW arrears
• a template spreadsheet to record the amount of arrears paid
• a template letter to issue to workers when arrears payments need to be made
• guidance on what employee pension contributions are due in respect of arrears of pay

We can help you work out the tax and pension deductions due and submit the necessary updates to HMRC.
Clawing back child benefit
If your family receives Child Benefit and you are a high earner (£50,000 or more per year), you need to pay a special tax charge to claw back some or all of the Child Benefit received.

It is your responsibility to tell HMRC that you need to pay the High Income Child Benefit Charge (HICBC), as HMRC’s computer systems can’t match up claimants for Child Benefit and their high-earning partners or spouses. HMRC did write to a number of taxpayers in 2013 to tell them about the HICBC, but your family’s circumstances may have changed since then.

In order to assess how much of the HICBC you need to pay, HMRC will ask you to complete a self-assessment tax return. If you are sent a notice to complete a tax return, don’t ignore it as penalties will mount up if the return is not submitted on time.

Note: it is your own income, as the higher earner, which is taxed to claw back the Child Benefit, not the income of the person who receives the Child Benefit.

That person can elect to stop receiving Child Benefit by contacting the Child Benefit office by phone or post, or by accessing their personal tax account at The benefit claim will remain live so the payments can recommence, or be paid for earlier periods if the child still qualifies.

It is important to make a claim for Child Benefit for every child, as it is that claim which triggers the issue of a National Insurance number when the child reaches the age of 15 years and 9 months. The Child Benefit claimant also has their own National Insurance record updated with NI credits for years in which they are not earning and the child is aged under 12.
Advisory fuel rates
These are mileage rates which employers can use to work out how much to reimburse employees who use company cars for business
journeys, but who have paid for the fuel used on those journeys out of their own pocket.

The advisory fuel rates are reviewed by HMRC every quarter, with the new rates taking effect from the first of June, September, December and March. In view of the recent increases in the price of road fuel you would expect all the advisory fuel rates to rise, but they haven’t.

The pence per mile rates for the current quarter are:

Engine size              Petrol        LPG
1400cc or less         11p              7p
1401cc to 2000cc   14p             9p
Over 2000cc            22p           14p

Engine size                   Diesel
1600cc or less             10p
1601cc to 2000cc       11p
Over 2000cc                13p

HMRC can’t require you to use these advisory rates. If the fuel costs in your area are much higher than the UK average, or your company
vehicles have low fuel efficiency, your business can use its own mileage rates based on the actual fuel costs of your company vehicles.

When an employee uses their own vehicle for a business journey, you can reimburse them tax free using mileage rates of 45p per mile for any size of car for the first 10,000 business miles driven in a year, and 25p per mile for subsequent journeys. These mileage rates for personally owned cars haven’t changed since 2011.

Get in touch - If you'd like to find out more about how we can help you and your business pay less tax, generate more profits and create long-term wealth for you and your family, please get in touch now