Update week ended 1 October 2010

4th October 2010

Swiss bank accounts

As you may have read, a rogue employee at a Swiss bank stole data on overseas account holders and distributed this to Tax authorities across Europe. As a result, HMRC have begun “fraud” investigations against account holders in the UK.

The bank concerned HSBC have told that they will write to all 9000 holders – who were affected by the theft.

HMRC are sending Code of Practice 9 (COP 9) statements with their letters. This is normally
only included when HMRC suspect serious fraud – and should only be issued after a proper risk assessment i.e. not just liberally handing them out!

If you have received a COP9 leaflet, perhaps you ought to contact a firm of accountants in London.

The orginal theft


ixBRL filing issues
Corporation tax returns must be filed online using iXBRL by 1 April 2011 at the latest.

Here are some useful steps:

Beware of relying on HMRC’s free software. We are receiving reports of people giving up after wasting hours and even days of their time.

Keep a pre iXBRL version of the software somewhere in the office in case you need to amend earlier returns.

Take care with outsourcing the ixBRL tagging. Ensure that your partner has a proven track record.

Where possible, try and keep the accounts in the same format as far as is practically possible.

A good idea is to start submitting iXBRL accounts from now instead of paper/PDF accounts.

HMRC have said that there will be a “soft landing” for the next two years. Our opinion is that they may be slightly more lenient with respect to penalties received as a result of technical difficulties.
The ICAEW are showcasing a few ranges of software during October and November.


Corporation tax software

National Minimum Wage changes

From 1 October 2010 the national minimum wage rates and age limits will change as follows:

21+ and over (prev. 22+): £5.93 (prev. £5.80)

18-20 (prev. 18-21): £4.92 (prev. £4.83)

16-17 £3.64 (prev. £3.57)

Apprentice (this is new) £2.50

The apprentice rate applies to those under 19 or aged 19 or over in the first year of apprenticeship.

Proof of age is very important for all staff. A passport/driving licence should suffice.

The first pay reference period (FPRP) is at the most a month. As the FPRP takes an employee into a new age band – the employer needs to take care – else HMRC can levy a penalty of up to £5,000 (or unlimited if taken to Crown Court).

Even worse for employers, is that all wages must be made good but rather than using old NMW rates, the new ones are to be used.


NMW information source


“This information is taken from Mark Lee’s weekly practical tax newsletter, published by the Tax Advice Network”