HMRC has published the updated Business Profits and Capital v Revenue Toolkits to assist agents when completing their clients' 2012-13 returns. These can be useful to individuals who have an understanding of the tax rules and wish to prepare their own tax returns. Links are provided here and they should should be read in conjunction with the essential information reproduced below.
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Business OrchardIndividuals, business and corporations
- Business Profits (PDF 181K)
- Capital Allowances for Plant and Machinery (PDF 255K)
- Capital Gains Tax for Land and Buildings (PDF 243K)
- Capital Gains Tax for Shares (PDF 191K)
- Capital v Revenue Expenditure (PDF 147K)
- Chargeable Gains for Companies (PDF 221K)
- Company Losses (PDF 152K)
- Directors' Loan Accounts (PDF 120K)
- Expenses and Benefits from Employment (PDF 207K)
- Income Tax Losses (PDF 127K)
- National Insurance Contributions and Statutory Payments (PDF 250K)
- Private and Personal Expenditure (PDF 247K)
- Property Rental (PDF 209K)
- Small Profits Rate and Marginal Relief (PDF 112K)
- VAT Input Tax (PDF 182K)
- VAT Output Tax (PDF 208K)
- VAT Partial Exemption (PDF 155K)
Trusts and Estates
Toolkits to help reduce errors - essential information
These toolkits are aimed at helping and supporting tax agents and advisers. They are part of HM Revenue & Customs' (HMRC's) wider approach to improving tax compliance, which is focused on help and support to ensure that returns are correct.
These toolkits are aimed at helping and supporting tax agents and advisers. They are part of HM Revenue & Customs' (HMRC's) wider approach to improving tax compliance, which is focused on help and support to ensure that returns are correct.
The toolkits have been developed with the benefit of input from agents and their representatives, including the Compliance Reform Forum. However, the content is based on HMRC's view of how tax law should be applied.
The application of these toolkits to specific cases will depend on the law at the relevant time and on the precise facts.
Overview
Each toolkit has three key elements:
- A checklist - to help you to address the areas of possible error that HMRC identifies as key.
- Explanatory notes - which identify the underlying types of error, how to mitigate those errors and a brief outline of the tax treatment. HMRC recommends that you review these notes, even if you are confident about answering the questions in the checklist.
- Cross references - linking to the relevant guidance available online, so you can easily find more detailed guidance if required.
By being more open on the errors that HMRC sees in returns, and suggesting the steps that you can take to reduce those errors, the toolkits will help you to assure the completeness and accuracy of your clients’ returns.
Use of the toolkits is voluntary and you can use them in whatever way best suits you and your clients.
Examples of how the toolkits are used include:
- as a straightforward checklist
- to complement or check and refresh your existing processes
- as a training aid for your staff
It should not be necessary for you to refer to all of the toolkits, only those that are relevant to your clients' circumstances and the return being completed.
Scope
Each toolkit is focused on errors which HMRC finds commonly occur. They are not comprehensive statements of all types of error that may arise in any particular return. For areas not dealt with in the toolkits you should refer to the full HMRC guidance.
Each toolkit will be updated each year to reflect any changes arising from the relevant Finance Act, where applicable, and released for use with that year’s returns.
Where there are changes to legislation, the toolkits provide a brief summary of those changes. The types of error that may arise from new legislation will not be immediately apparent, but if HMRC encounters particular areas of common error, they will seek to address these errors by releasing an updated version.
HMRC's guidance is updated regularly. There will however be occasions when the draft guidance has not yet been published. Where that is the case, the toolkits provide a link to the latest publication available on the HMRC website.
The toolkits do not cover tax avoidance or deliberate attempts to evade tax, which are outside the scope of the toolkits and are subject to HMRC's normal compliance procedures.
Taking reasonable care
Under the penalty legislation, there will not be a penalty for an error in a return or other document where the person has taken reasonable care that the return or document is accurate. As part of their efforts to take reasonable care, a person may seek professional advice and may appoint an agent to help them.
Where a person appoints an agent, this does not relieve them of their responsibility for their tax affairs. They still have a duty to take reasonable care, within their ability and competence, and this includes the person taking reasonable care to avoid inaccuracy by their agent.
The aim of these toolkits is to highlight errors which HMRC finds commonly occur and to help you avoid inaccuracies in your clients' returns that may otherwise lead to penalties. Their use remains entirely voluntary. Whether reasonable care has been taken in any particular case will be a question of fact and will not depend on whether a toolkit has or has not been used.
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