Latest news with #CIOT
Times
a day ago
- Business
- Times
HMRC can't be bothered to send letters (unless you owe it money)
HM Revenue & Customs will stop sending physical letters to taxpayers in the latest move to 'modernise' and save £50 million a year. The tax office confirmed it would 'eliminate' outbound post unless it is revenue generating, cutting the number of letters it sends by 75 per cent by the 2028-29 tax year. The government promised an extra £500 million in funding over the next four years in Wednesday's spending review, with the aim of pushing at least 90 per cent of customer interactions online and making HMRC a 'digital-first organisation'. Lindsay Scott from the Chartered Institute of Taxation (CIOT), a trade body, said withdrawing physical letters prematurely 'risks further damaging customer service'. 'Plans to phase out post must be handled with care, with robust safeguards to protect those who are digitally excluded or lack digital confidence,' Scott said. This year, 70 per cent of the tax office's interactions with taxpayers were 'digital self-serve', but HMRC estimates that about a fifth of its customers, or seven million people, still need assistance to use its digital services. Last year, more than 300,000 filed their tax returns on paper. The department's previous attempts to digitise have also been widely criticised. Its Making Tax Digital initiative has cost at least £1 billion more in real terms than its initial £226 million budget when it was proposed in 2016, according to the National Audit Office, which scrutinises government spending. In 2023, it said the rollout for self-assessment tax returns was at least eight years behind schedule. The tax office has also come under fire for its track record with customer communications. Its webchat service, launched in 2015, connected less than half of the time, according to a report by the CIOT and the Institute of Chartered Accountants in England and Wales, a trade body, published in December. The report also showed taxpayers were satisfied with webchats 28 per cent of the time and the phonelines 56 per cent of the time, although HMRC's own satisfaction estimates are much higher. On the phone lines, callers spent an average of 23 minutes on hold in the last tax year and 34 per cent of callers gave up before they were connected in 2023 — more than double the target of 15 per cent or less. The investment announced on Wednesday comes as part of a wider push to revitalise the tax office, with an additional £1.6 billion in spending over the next four years also confirmed for reforming its technology and data infrastructure. The full spending package aims to raise £7.5 billion additional tax revenue a year by 2029-30, by digitising services and hiring an extra 7,900 staff to work on compliance and debt management. The government said it will use the extra revenue to 'fund vital public services'. HMRC said: 'Reducing the number of letters we send and communicating in different ways instead will provide a better service for our customers in line with modern-day expectations, as well as deliver savings of £50 million by 2028-29.'
Telegraph
10-04-2025
- Business
- Telegraph
‘Hypocrite' Nicola Sturgeon uses low tax loophole
Nicola Sturgeon has been accused of 'hypocrisy' after exploiting a loophole to avoid the higher rates of income tax imposed on Scottish workers by the SNP. The former first minister has updated her register of interests at Holyrood to state that she withdrew £10,000 from her company on Jan 31 this year. But she took the payment in the form of a dividend, meaning that the money was not liable for the higher rates of income tax she and her successors as SNP first minister have levied on Scots' wages, saving her £1,200. Dividends are taxed at lower rates by the Westminster Government, with the receipts going to the UK taxman instead of Revenue Scotland, the SNP's collection agency. The Chartered Institute of Taxation (CIOT) calculated that the move would have saved Ms Sturgeon £1,209.60 compared with being paid £10,000 as a salary, which would have been liable for Scottish income tax. In addition, the CIOT said Ms Sturgeon and her company do not have to pay employer or employee National Insurance on dividends. Although she has not done anything illegal, the Tories said ordinary Scots would be 'rightly livid at any Nicola Sturgeon hypocrisy'. She and her successors, Humza Yousaf and John Swinney, have argued there is a 'social contract' in Scotland whereby workers pay more income tax in return for 'free' benefits such as prescriptions and university tuition. The row erupted as Ms Sturgeon announced a special show at Edinburgh's Usher Hall, during which she will be interviewed and take questions from the audience. Tickets cost up to £73.95, including the booking fee, and her fans can pay an additional £75 to attend a 'meet and greet' with the former first minister before the show. Ms Sturgeon, who earns £74,507 as the Glasgow Southside MSP, set up her company in 2023 to deal with her 'artistic' earnings from outside Holyrood. She has since registered a series of payments to the firm, including £25,000 for appearing as a pundit on ITV's general election night coverage last year, and the first of four £75,000 instalments from publisher Pan Macmillan for her memoirs. However, the £10,000 dividend is the first large sum on her register of interests to be withdrawn from the company. When challenged previously, her spokeswoman refused to clarify whether she would pay Scottish income tax on any payments she received from the firm. About 1.5 million Scots earning at least £30,318 pay more income tax than if they lived elsewhere in the UK. There are six tax bands in Scotland, double the total south of the Border, and the top band is 3p higher. Craig Hoy, the Scottish Conservative Shadow Finance Secretary, said: 'Ordinary Scots will be rightly livid at any Nicola Sturgeon hypocrisy. 'Thanks to her government, they pay the highest taxes in the UK, yet the former first minister appears to be avoiding paying those same punitive income tax rates herself. 'So much for her commitment to 'progressive' taxation and those with the broadest shoulders bearing the heaviest burden.' The CIOT calculations for Ms Sturgeon's tax bill showed that a £500 dividend allowance would be deducted from the £10,000 lump sum. The remaining £9,500 would then be taxed at the dividend higher rate, which applies across the UK, of 33.75 per cent. This would leave Ms Sturgeon with a £3,206.25 bill on top of the income tax she pays on her MSP salary. However, if she had taken the £10,000 as a salary then Mr Sturgeon would have paid £1,178.10 income tax levied at the 42 per cent Scottish higher rate and a further £3,237.75 at the 45 per cent advanced rate. Her total additional income tax bill would have been £4,415.85 – £1,209.60 more than the charge for a dividend. The CIOT also noted that her company, Nicola Sturgeon Ltd, would have to pay corporation tax on its profits. This is collected at a UK level by HM Revenue & Customs. Ms Sturgeon's spokeswoman declined to comment. However, sources said that any payments made by the company to her would be fully declared in her register of interests and taxed in the appropriate way. Police Scotland announced last month that a long-running criminal investigation into Ms Sturgeon about the SNP's finances had been dropped. Peter Murrell, her husband and the party's former chief executive, has been charged with embezzlement. She announced earlier this year they had separated and were divorcing. Ms Sturgeon also disclosed she would stand down as an MSP at next year's Holyrood election, saying it was 'the time is right for me to embrace different opportunities in a new chapter of my life'. Her memoirs, titled Frankly, are scheduled to be published in August and 'personal insights into leadership, public service, and the challenges and triumphs that have shaped her journey' are promised at her Usher Hall show in October.
