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January 03, 2014

Also in the news this week – 3 January 2014

HMRC reveals bizarre excuses for late returns

With the 31 January tax return deadline just around the corner, HM Revenue and Customs (HMRC) has revealed the “top 10 oddest excuses” for sending in a late tax return. These include the death of a goldfish, a “run-in with a cow” and stress caused by watching footage of a volcanic eruption on the news. One London accountancy firm even told HMRC that it was too busy submitting its clients’ tax returns to tackle its own. All these people and businesses received a £100 penalty from HMRC for filing late. If you haven’t yet sent your 2012/13 tax return to HMRC, you need to do it online and pay the tax you owe by the end of January. To send an online tax return, you must be registered for HMRC Online Services.

FCA warning about “hidden swaps” comes to light

A letter written by the Financial Conduct Authority (FCA) to the Treasury warning about “hidden swaps” products sold to SMEs has been made public months after it was written in May 2013. The FCA advised the Treasury that more than 60,000-fixed interest business loans with “mark-to-market” break costs (“hidden swaps”) had been sold to SMEs since 2001. This is in addition to the 40,000 Interest Rate Hedging Products (IRHPs), the sale of which is already under review. In the letter, Martin Wheatley said: “There is a risk that banks may consider ‘embedding’ all their IRHPs into commercial loans in future, and thus avoid our regulatory oversight altogether.” Lobby group Bully-Banks has asked the Treasury to instruct the FCA to carry out an investigation into the sale of hidden swaps with a view to setting up a redress scheme.

How Britain exports Christmas around the world

UK firms are exporting large numbers of Christmas-related products around the world. According to the Department for Business, Innovation and Skills (BIS), international sales of sprouts, geese and Christmas lights were expected to increase by as much as 2,000% in December 2013. The biggest grossing products in the run-up to Christmas are likely to have been wine, cheese and toys. Crispin Simon, UK Trade & Investment (UKTI) chief executive, said: “In 2014, we want to make sure that increasing numbers of UK firms are not just trading abroad, but thriving there and competing with the best the rest of the world has to offer.”

SMEs have “low awareness” of tax incentives

A survey by Baker Tilly has found low awareness and take-up by small businesses of some key tax incentives. Only 15% of the 750 SMEs surveyed knew about R&D tax credits – a government scheme that was launched almost 14 years ago. Other tax incentive schemes also appeared to have a low profile, with only 8% knowing about the Seed Enterprise Investment Scheme (SEIS) and 4% aware of the Patent Box. HMRC reports show that the majority of R&D tax relief claimed in 2011-12 went to large companies (£780m) rather than SMEs (£420m).