Chartered Tax Advisers
Old Bishops' College

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Smiling businessmen and women

  TAX E-NEWS - September 2016

Welcome to the September monthly tax newsletter.  These newsletters are designed to keep you informed of the latest tax issues.

Please contact us if you need further information on any of the topics covered.

Peter McDaid

(part 2)

In the first six months of this tax year there were a million incidents of financial fraud which is one every 15 seconds and this is an increase of 53% when compared to the same period last year.

I know this is not tax related but we do our best to advise our clients on all possible issues in relation to their business activities.

Following on from my final article in my August newsletter one of my clients has contacted me to say that he has just been scammed to the tune of £10,000.

An individual phoned him purporting to be from BT and was very well informed about his BT account, he was advised that his BT internet account has been hacked. The long and the short of it was that he followed instructions which somehow enabled them to take the funds from his bank account. When he informed the bank, it was found that the funds had been transferred into 3 different bank accounts and the money quickly extracted from those bank accounts. The bank (one of the big 4) could do nothing else and because it wasn't their fault did not accept liability and washed their hands of the whole matter. My client is a very intelligent and capable business person, who is also very street wise. He was taken in by a sophisticated scam and unfortunately there seems very little that one can do to redress the position.

Being very familiar with opening bank accounts and the hoops that one has to jump through and the identification documentation that has to be provided, one has to ask how the banks involved couldn't do more to track down the individuals concerned.

I have advised my client to report this to the Police action fraud department National Fraud & Cyber Crime Reporting Centre. I have no idea if this will do him any good as I suspect that like most government departments they are understaffed and underfunded and struggling to cope with the huge amount of fraud that is now happening. This is a tale of woe which must be taken as a lesson for us all. In the circumstances I would just like to recap on some of the main scams that are out there!

Vishing - This involves a fraudster making a phone call to a victim and they are posing as someone in a position of trust e.g. HMRC, bank staff, Police, your internet provider etc. They will appear to have a great deal of knowledge about the victim and will attempt to coerce the victim into:

- transferring funds to another bank account for purportedly safe keeping
- withdrawing cash and handing it over to the fraudster for investigation
- releasing personal financial information which can then be used to gain access to   their victim's finances.

Phishing - This is where victims receive e-mails directing them to websites where they are asked to provide financial information. These emails appear to come from a legitimate source but are purely designed to extract information and access and steal monies from the victim.

Courier Scams - This is where a fraudster arranges for your bank card to be collected by courier and also requests that you write down your pin number and hand it to the courier. To add credibility, the fraudster may even advise you to cut the card in half.

Investment/Boiler Scams - Where the fraudster offers an investment opportunity with an unrealistically high return. Remember if it sounds too good to be true it usually is.

Pension Liberation - This involves the transfer of an existing pension scheme to a brand new one which has the option of accessing the funds before the individual reaches the age of 55. This basically is not possible and can result in serious tax consequences.

There are numerous other scams out there and the problem is that some of them are very realistic. our advice is to take nothing for granted and never release any personal and financial information to third parties without making sure that you are 100% certain that they are genuine. Banks will never ask for your pin numbers and therefore you should never ever release this to anyone who asks for it.

FINANCE ACT 2016 - Summary of key measures (effective from 06 April 2016)
Changes on dividend taxation:
- The notional 10% tax credit on dividends is abolished.
- The first £5,000 of dividends received by an individual will not be taxable.
- dividends in excess of the £5,000 will be taxed at 7.5% (basic rate tax payer) 32.5% (higher rate tax payer) and 38.1% (additional tax rate payer).
- The tax payable on an overdrawn directors' loan account increased from 25% to 32.5%.

Changes to taxation on interest received:
Banks and Building societies will pay interest gross.
A personal savings allowance was introduced.
£1,000 interest tax free (basic rate tax payers)
£500 interest tax free (higher rate tax payers)
Nil interest tax free (additional tax rate payers).

Changes to capital gain tax
Capital gains tax rates are reduced
10% (basic rate tax payers)
20% (higher and additional rate tax payers)
The old rates of 18% and 28% still apply to residential property where the main residence exemption does wholly apply.

Changes to Stamp Duty Land Tax
An additional 3% charge will apply on top of the existing rates for the purchases of additional residential properties. There is an exemption when the main residence is being replaced. The rules are actually quite complex and advice should be sought.

Replacement Furniture Relief on Rented Properties
- The 10% wear and tear allowance on furnished properties is abolished.
- Tax relief is now given for the replacement costs of domestic capital expenditure such as furniture and white goods etc. on a like for like basis.


As set out in this month’s tax diary, individuals are required to notify HMRC by 5 October 2016 if they are not within Self-Assessment and receive income or gains on which tax is due.

Many employees without significant other income do not receive a Self- Assessment Tax return because their tax is collected under PAYE/RTI scheme. If for example, they start renting out a property or make a capital gain this would require HMRC to be notified of the chargeability of the tax liability arising

The six-month time limit ensures that the taxpayer can be sent a tax return in sufficient time to complete it within the normal return cycle for the year. Failure to meet the deadline means the taxpayer is liable to a financial penalty.

The maximum penalty is the net amount of tax due, but unpaid, at 31 January following the tax year in which the liability arises. This means that even if notification is made after the six-month time limit, the penalty can be eliminated if the taxpayer pays the full amount of the tax due on or before 31st January.


Date What's Due
1 October


Corporation tax for year to 30/12/15

5  October
Deadline for notifying HMRC of chargeability for 2015/2016 if not within Self Assessment and receive income or gains on which tax is due.
19 October
PAYE & NIC deductions, and CIS return and tax for month to 05/10/2016 (due 22 October if you pay electronically).

If you have any questions about this newsletter please contact us, we will be happy to help.