July 2007 Archives
The taxman has announced that interest and penalty charges will be waived in cases of late payment by taxpayers affected by the recent floods.
Under self assessment, two payments on account must be made in respect of a tax year. The first is on 31 January during the tax year, and the second is on 31 July following the tax year. For the 2006-07 tax year, the second payment on account is due on 31 July 2007.
The recent floods have caused untold upheaval. In Gloucestershire, for example, many have been evacuated from their houses. Meeting their tax obligations must be the last thing on their minds. Jolly decent of the taxman, and a sign that we live in a civilised country, after all.
Photo credit: © Photographer: Kenneth Summers | Agency: Dreamstime.com
I reported some time ago that the Federation of Tour Operators (FTO) was to take the Government to court over the increase in air passenger duty.
The case has just begun in the High Court, and already it promises to be entertaining.
The FTO is claiming that the tax is unlawful. They also highlight the absurd situation that arose whereby passengers were who had already booked their air tickets before the increase came into effect, were also asked to pay the increase. In the FTO's view, this was because the Government 'forgot' all about those passengers, and failed to take their situation into account when imposing the increase.
Sharp words, and I'm inclined to agree. Let's see how this one plays out.
Time for the taxman's report card. The HMRC Standard Report and Accounts for 2005-06 has just been published (pdf).
Very interesting reading. So far, I have gone through the Tax Credits section, and here is an extract from the concluding section (emphasis mine):
(2.52) During 2006-07 the Department paid a net £18.7 billion in tax credits and an average of 5.5 million families received provisional 2006-07 awards.
The Department estimates that year end adjustments to awards meant it overpaid £1.7 billion and underpaid £549 million in 2005-06.
In the first three years since the scheme was introduced, the Department calculates that these adjustments, and other small changes to entitlement after the finalisation of awards, have led to a debt of £6.0 billion.
It has also identified £600 million from in year adjustments to 2006-07 awards and will identify further overpayments for this year once awards are finalised.
By the end of March 2007 the Department had collected £2.0 billion of this debt and written off £0.7 billion. £3.9 billion of overpayments remain to be collected by the Department. It has provided for £1.6 billion in respect of doubtful debts.
When Gordon Brown was asked during Prime Minister's Questions earlier this week about the overpayment of tax credits, he launched into self-congratulatory mode on how the tax credits system has alleviated hardship for many. I don't doubt that. I only wonder whether the high price (in terms of overpayments, etc) is worth paying for whatever benefits the system brings.
Via the Adam Smith Institute, we learn that today, Friday 13 July, is in fact Tax Freedom Day in Germany.
The poor souls.
