The UK tax system used to be relatively straightforward to follow. Everyone received a personal allowance and income in excess of this was subject to tax rates of 20%, increasing to 40% on higher earnings. In recent years, however, with the introduction of the additional tax rate of 50%, and the removal of personal allowances, navigating your way around the tax system and tax planning has become more complex.
We launched our tax service, in April 2010, following a number of articles in the press claiming that a large number of pension scheme members do not reclaim their higher rate tax relief on their pension contributions. At the time of launching our service pension scheme members were able to go back 5 years and obtain a tax refund for their unclaimed relief, this has now reduced to 3 years, however the refunds still mount up. We have recently submitted claims for three members of a group pension scheme who each received tax refunds of between £2K and £3K.
Not only can reclaims be made for higher rate tax relief on pension contributions but also higher rate tax relief on gift aid donations and tax relief on job related expenses such as professional subscriptions, trade magazines and business mileage. Business mileage reclaims are becoming more topical since the increase in HMRC approved mileage rates which many employers have not adopted. Employees are able to reclaim the difference between the HMRC approved rates and the amount they are reimbursed against their taxable income to generate a tax refund.
Whilst tax reclaims is part of the tax service we offer a large part of our tax service is managing our client’s self-assessment. Under self-assessment, the onus is on the taxpayer to complete and submit tax returns and tax assessments on time. Failure to self-assess or any inaccuracies on self-assessment can lead to stiff penalties or high rates of interest. As tax becomes more complicated and we are in the age of information technology where HMRC have easy access to information that is used to validate tax return submissions many clients are using this service.
The service includes preparing tax returns, ensuring all reliefs are claimed, advising, on a timely basis, of any tax payable, dealing with any refunds due, online submission of the return, ensuring tax codes are correct, checking statements and calculations issued by HMRC and providing timely reminders of filing and payment deadlines. This gives our clients peace of mind that their tax affairs are up to date.
We will also work with clients on income tax, capital gains tax and inheritance tax planning during the year. Over the coming months we’ll provide you with more articles covering the work we do including case studies
The initial point of contact for enquiries is myself, Christine Wallwork. Drop me an e-mail at christinewallwork@cullenfp.co.uk or call me on 0161 975 6723.
