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June 2017 Tax News & Updates
Welcome to our monthly newswire. We hope you enjoy reading this newsletter and find it useful. Please contact us if you would like to discuss any matters further.
VAT payments and surcharges
The penalty surcharges imposed when VAT is paid late can have a perverse effect, as they encourage the taxpayer to pay VAT owing for later periods in preference to paying debts outstanding for earlier periods. However, the HMRC computer automatically allocates payments against the oldest debt first, which can disadvantage the taxpayer.
IHT Planning
People don’t want to think about their death, or the IHT potentially payable, but they will consider the cost of the care they may need, as that is an issue that many have addressed for an older relative. The talk of “dementia tax” to pay for social care may also prompt people to think about their net wealth.
Information notices
HMRC have extensive powers to request information from taxpayers, but the law is designed to ensure the taxpayer understands what he must supply and when. This structure is necessary because the taxpayer can suffer a penalty if he does not comply with an information notice from HMRC.
LISA planning
A lifetime ISA (LISA) can be opened from 6 April 2017 by individuals who are resident in the UK, or crown servants serving overseas (including in the armed forces), or a spouse/ civil partner of such a civil servant. The ISA applicant must also be aged at least 18 and under 40 years.