How to challenge your Council Tax listing

The Valuation Office Agency (VOA) is a government body in England and Wales and an executive agency of HMRC. The Agency values properties for the purpose of Council Tax and for non-domestic rates in England and Wales. The council tax bands were set on 1 April 1991 for England, and on 1 April 2003 for Wales and range from Band A – F.

If you believe that your council tax listing is incorrect, you can challenge this with the VOA. A new version of the Council Tax challenge form to submit to your council tax listing has recently been published. This form is used if you believe that your council tax band is wrong. An appeal against your current band can be made online for various reasons.

This includes:

  • You disagree with an alteration to your properties banding made by the VOA.
  • You are new to the property in question and feel the valuation band too high or low.
  • The property is no longer a dwelling.
  • The property is new or has only recently become used for domestic purposes.
  • Change in a property e.g. flats merged into a house of vice versa.
  • The valuation band does not take into account a relevant decision of a local Valuation Tribunal or the High Court.

When submitting the form, you should include the reasons why you think the Valuation List should be altered, and include documentary evidence where possible. You can also appoint someone else to challenge your council tax listing on your behalf.

If you live in Scotland, then you need to use the Scottish Assessors portal website to check your Council Tax band and if necessary lodge a claim with them (known as a proposal).

Will I pay tax when coming to the UK?

The statutory resident test (SRT) is used to determine if someone is resident in the UK for tax purposes when coming to the UK. Historically, residence in the UK was determined by being in the UK in excess of 182 days in any tax year (6 April to 5 April) or by being resident in the UK for an average of 91 days in any tax year, taking the average of the tax year in question and the three previous tax years.

This changed with the introduction of the SRT from 6 April 2013. The SRT consists of the three separate tests which are intended to provide greater certainty as to a taxpayers residency status. For the majority of taxpayers, it will be clear that they are resident in the UK if they:

  • spend 183 or more days in the UK in the tax year
  • have a home in the UK, and don’t have a home overseas
  • work full-time in the UK over a period of 365 days

However, for taxpayers with complex circumstances there are further tests using the SRT that provide more clarity as to their residency status in the UK.

The three tests which comprise the SRT are as follows:

  1. An automatic non-residence test.
  2. An automatic residence test.
  3. A ‘sufficient ties’ test.

Planning note

There are also special rules for those coming to work in the UK as an employee or as a self-employed person, as well as a special scheme for taxing the income of foreign entertainers and sportspersons who come to perform in the UK.

If you are concerned with your UK tax status, please call for advice.

A round up of some non-taxable payments and benefits

Although the government is continually clamping down on non-taxable payment and benefits for employees, there remains an eclectic list of expenses that are tax exempt.

Some of the non-taxable benefits include the following:

  • Annual parties. An annual Christmas party or other annual event offered to staff generally is not taxable on those attending, provided that the average cost per head of the function does not exceed £150. There are qualifying criteria that must be followed to ensure that there will be no taxable benefit charged to employees.
  • Equipment for disabled employees. Benefits provided to employees with a disability to help them with their work aren’t taxable where there is private use. For example, a wheelchair or hearing aid.
  • Goodwill gifts. Certain gifts received by employees from third parties (such as a gift voucher) are exempt, provided that the total value of the gift made by a donor is less than £250 in any one tax year. In addition, no tax is usually payable on goodwill entertainment provided by third parties (e.g. suppliers).
  • Health-screening and medical check-ups. A maximum of one health-screening assessment and one medical check-up in any year can be tax exempt.
  • Late-night taxis. An employee, who is occasionally required to work late, can be provided with a taxi home paid for by his / her employer. This taxi ride will qualify for tax exempt status if all qualifying conditions are met.
  • Long service awards. Long service awards made to directors and employees as testimonials to mark long service where the service is not less than 20 years, and no similar award has been made to the same employee within the previous 10 years are likely to be tax exempt. The cost of an article must not exceed £50 for each year of service.

There is no requirement for employees to pay tax on benefits and expenses covered by concessions or exemptions, and there is also no need for them to be included on your tax return.

New guidance on disguised remuneration scheme

The government’s plan to tackle disguised remuneration tax avoidance schemes was first announced as part of the Autumn Statement 2016. These types of schemes (including contractor loans), are used by employers and individuals and seek to avoid paying Income Tax and National Insurance contributions (NICs). This is usually done by utilising a loan or other payment from a third-party which is unlikely to be repaid.

A charge (known as the 2019 loan charge) will apply to all loans made since 6 April 1999 if they are still outstanding on 5 April 2019. The charge will not arise on outstanding loans if the individual has agreed a qualifying settlement with HMRC before 5 April 2019.

HRMC has accepted that payment of tax due, may have a significant impact on some taxpayers and is offering flexible payment arrangements to those having genuine difficulty paying what they owe. HMRC will allow scheme users to spread their payments over 5 years if their taxable income in 2018-19 is estimated to be less than £50,000, as long as they are no longer in avoidance. HMRC will look at other taxpayers on a case-by-case basis. The charge on outstanding loans is expected to raise £3.2bn for the government.

The only way to avoid the new loan charge, is by making a repayment of the loan balance or settling your tax liability with HMRC in advance. A settlement opportunity was launched to allow those affected to settle their tax affairs before the loan charge comes into effect. Users of disguised remuneration schemes, should register their interest in using the settlement opportunity as soon as possible. The final deadline for submitting all the required information remains 30 September 2018.

VAT – motor dealer deposit contributions

A new Revenue and Customs Brief 7/18 has been published by HMRC concerning their policy on the VAT accounting treatment of promotions, where payments are said to be made by motor dealers to finance companies on behalf of the end customer. These are usually known as dealer deposit contributions (DDC) in the motor retail trade and have been the subject of different VAT accounting treatments by motor dealers.

HMRC views DDCs as a discount on the headline price charged by the dealer. The DDC is shown on the finance and sales documentation and is agreed by all the parties to the transactions before these take place. There is no retrospective adjustment to the amount the customer will pay, nor the amount the finance company will pay the dealer.

VAT is therefore due on the discounted amount actually charged to the finance company and the customer. Any VAT that has been miscalculated must be corrected. The dealer must either make a section 80 claim for overpaid output tax or adjust their VAT returns following the normal error correction process explained in VAT notice 700/45.

Finance houses do not have to make any corrective action. They can make a section 80 claim for overpaid output tax but must offset the input tax they claimed on the invoices from the dealer. There is therefore nil net tax to adjust.

This HMRC brief is not concerned with manufacturer deposit contributions (MDC), which are promotions where the manufacturer or importer of the vehicle make a contribution to reduce the amount that the customer has to pay for the vehicle.