Many newly retired pensioners may not be aware that the State Pension they receive is taxable income. Also, the amount paid is not taxed at source. Although a pensioner’s State Pension may be covered by their annual tax-free personal allowance (£11,000 for 2016-17) and therefore potentially no tax would be payable, the situation is more complex if other private pensions and investment income are received. At the end of a tax year any tax collected by deduction from pensions may not be sufficient to clear liabilities.

The most common benefits that you pay Income Tax on are:

• the State Pension
• Jobseeker’s Allowance
• Carer’s Allowance
• Employment and Support Allowance (contribution based)
• Incapacity Benefit (from the 29th week you get it)
• Bereavement Allowance
• pensions paid by the Industrial Death Benefit scheme
• Widowed Parent’s Allowance
• Widow’s pension

The most common state benefits you don’t have to pay Income Tax on are:

• Housing Benefit
• Employment and Support Allowance (income related)
• Income Support – though you may have to pay tax on Income Support if you’re involved in a strike
• Working Tax Credit
• Child Tax Credit
• Disability Living Allowance
• Child Benefit (income based – use the Child Benefit tax calculator to see if you’ll have to pay tax)
• Guardian’s Allowance
• Attendance Allowance
• Pension Credit
• Winter Fuel Payments and Christmas Bonus
• free TV licence for over-75s
• lump-sum bereavement payments
• Maternity Allowance
• Industrial Injuries Benefit
• Severe Disablement Allowance
• Universal Credit
• War Widow’s Pension
• Young Person’s Bridging Allowance

If you do receive a bill at the end of the tax year make sure you check HMRC’s calculations, they have been known to get it wrong!

According to new government research published recently shows that almost a quarter (24%) of small and medium-sized (SME) employers had more people working for them in 2015 than in 2014.

The Small Business Survey 2015 is based on the views of more than 15,000 SMEs. Starting from this year, the survey will track the same businesses over time to better understand their needs as they grow and develop.

Only 1 in 10 reported a reduction in staff numbers, which is down from around 1 in 5 (21%) in 2010.

Small Business Minister Anna Soubry said:

This survey shines a light on the small businesses that drive our economy and employ millions of people across the country – and its good news that small firms continue to employ more people.

A strong economy underpins the success of our small businesses which is why this government continues to take the difficult decisions needed to keep our economy and businesses strong.

The survey also asked SMEs about their internet usage and found that 95% of employers use the internet for work, 76% have their own website, and 55% have a social media profile.

These results come as the government launches a call for evidence into the barriers businesses face when accessing superfast broadband, which can transform the way modern businesses work together, reach their consumers and target their export markets. This will feed into the wide-ranging business broadband review led jointly by the Department for Business, Innovation and Skills (BIS)and Department for Culture, Media and Sport (DCMS), announced in February 2016 by the Business Secretary.

The survey also shows 8 out of 10 (81%) smaller businesses which applied for finance secured all or some of what they asked for, echoing other recent studies that show the continuing improvement in the access to finance landscape. Bank overdrafts were the most commonly sought type of finance, while peer-to-peer lending and crowdfunding made up 5%.

Late payment continues to be a problem for almost a third (30%) of SME employers. The government is taking forward a number of measures to tackle this, by establishing a Small Business Commissioner through the Enterprise Act.

While the proportion of businesses experiencing higher turnover is similar to that found in the 2014 survey, medium-sized businesses are actually 3% more likely to report higher turnover than last year.

There is a continuing misuse of emails and SMS messages that purport to be from HMRC asking questions about your tax and encouraging recipients to part with their personal information and bank details.

HMRC have recently issued guidance, intended to help taxpayers decide if an email from the tax office is genuine. Here’s what HMRC have said on this topic:

As well as spelling mistakes and poor grammar, there are a number of things you can look out for to help you recognise a phishing/bogus email.

Incorrect ‘From’ address

Look out for a sender’s email address that is similar to, but not the same as, HMRC’s email addresses. Fraudsters often have email accounts with HMRC or revenue names in them (such as ‘refunds@hmrc.org.uk’). These email addresses are used to mislead you.

However, be aware, fraudsters can falsify (spoof) the ‘from’ address to look like a legitimate HMRC address (for example ‘@hmrc.gov.uk’).

If you’re not 100% sure that the message has come from us don’t open it. If you do open the email and you’re in doubt don’t click on any links or downloads.

Examples of phishing and bogus emails

Personal information

Emails from HMRC will never:

• notify you of a tax rebate
• offer you a repayment
• ask you to disclose personal information such as your full address, postcode, Unique Taxpayer Reference or details of your bank account
• give a non HMRC personal email address to send a response to
• ask for financial information such as specific figures or tax computations, unless you’ve given us prior consent and you have formally accepted the risks
• have attachments, unless you have given prior consent and you have formally accepted the risks
• provide a link to a secure log-in page or a form asking for information – instead we will ask you to log on to your online account to check for information

Urgent action required

Fraudsters ask for immediate action. Be wary of emails containing phrases like ‘you only have 3 days to reply’ or ‘urgent action required’.

Bogus websites

Fraudsters often include links to webpages that look like the homepage of the HMRC website. This is to trick you into disclosing personal/confidential information. Just because the page may look genuine, does not mean it is. Bogus webpages often contain links to banks/building societies, or display fields and boxes requesting your personal information such as passwords, credit card or bank account details.

You should be aware that fraudsters sometimes include genuine links to HMRC web pages in their emails, this is to try and make their emails appear genuine.

Common greeting

Fraudsters often send high volumes of phishing emails in one go so even though they may have your email address, they seldom have your name. Be cautious of emails sent with a generic greeting such as ‘Dear Customer’. Emails from HMRC will always:

• use the name you’ve provided to us
• include information on how to report phishing emails to HMRC

Attachments

Be cautious of attachments as these could contain viruses designed to steal your personal information.

The message is clear. If in doubt, do not respond to these emails, and do not provide any personal information requested by email. You could always call a HMRC helpline to clarify if an email is genuine, or discuss the email with your professional advisor.

The UK has one of the most detailed tax codes in the developed economies. Readers might be amused, bemused, that the so-called Office of Tax Simplification (OTS) has launched a high level strategy consultation that aims to move its tax simplification agenda forwards.

The aim is to make our tax system easier to understand and therefore simpler to use.

Here’s what Angela Knight, chair of the OTS said:

“Some areas of tax will always be complex but the OTS aims to make using the system as easy as possible. Just as a mobile phone is a complicated piece of engineering but is pretty straightforward to make a call or send a text, so we intend for taxpayers to be able to manage their tax affairs with less hassle.

The world of work though is changing rapidly, whether it is what is often called the sharing economy or whether it is just that the Internet and e-commerce agenda has changed so much of what we do. The three strands of the OTS strategy are to consider the tax issues that are arising as the world of work changes; to address specific complex areas; and to play a greater role in the digital agenda. To support this, we also will be taking an active role in the public debate on tax.”

To deliver its strategy the OTS plans to:

• set out how new trends and changes in business and employment (such as the sharing economy) will impact on tax
• consider how to make tax simpler given these changes to how we work
• reviews areas integral to these trends and identify difficult issues where an informed discussion is required
• take the issues and options out for wide discussion and evidence gathering
• encourage simplification to be built into tax policy making and implementation early on in the process
• engage closely with HMRC on its important digital agenda

The OTS will shortly become a statutory body, with a new and broader remit. This high level strategy sets out the purpose and aims of the OTS; the work it does; how and with whom it will undertake its work; and its impact and influence.

The consultation aims to ensure tax becomes simpler, with the UK remaining attractive to business, and reflects the OTS new broader remit as a statutory body. The document is also intended to prepare the ground for the OTS stakeholder conference, which is planned for 18 July 2016.

• Nearly seven out of ten attacks on all firms involved viruses, spyware or malware.
• Record £1.9bn government investment to protect UK but industry must act to help protect themselves
• New National Cyber Security Centre will launch in the autumn 2016

Britain’s businesses are being urged to increase protection from cyber criminals after government research into cyber security found two thirds of large businesses experienced a cyber breach or attack in the past year.

The research also shows that in some cases the cost of cyber breaches and attacks to business reached millions, but the most common attacks detected involved viruses, spyware or malware that could have been prevented using the Government’s Cyber Essentials scheme.

The Cyber Security Breaches Survey found that while one in four large firms experiencing a breach did so at least once a month, only half of all firms have taken any recommended actions to identify and address vulnerabilities. Even fewer, about a third of all firms, had formal written cyber security policies and only 10% had an incident management plan in place.

Minister for the Digital Economy Ed Vaizey said:

The UK is a world-leading digital economy and this Government has made cyber security a top priority. Too many firms are losing money, data and consumer confidence with the vast number of cyber-attacks. It’s absolutely crucial businesses are secure and can protect data. As a minimum companies should take action by adopting the Cyber Essentials scheme which will help them protect themselves.

Results from the survey are being released alongside the Government’s Cyber Governance Health Check, which was launched following the TalkTalk cyber-attack. It found almost half of the top FTSE 350 businesses regarded cyber-attacks as the biggest threat to their business when compared with other key risks – up from 29 per cent in 2014.

The Government’s Cyber Governance Health Check also found that:

only a third of the UK’s top 350 businesses understand the threat of a cyber-attack; only a fifth of businesses have a clear view of the dangers of sharing information with third parties; and many firms are, however, getting better at managing cyber risks, with almost two thirds now setting out their approach to cyber security in their annual report.

Both surveys form part of the Government’s rigorous approach to tackling cyber-crime, which will see £1.9 billion invested over the next five years.

The Government is encouraging all firms to take action: the 10 Steps to Cyber Security provides advice to large businesses, and the Cyber Essentials scheme is available to all UK firms. The Government is also creating a new National Cyber Security Centre offering industry a ‘one-stop-shop’ for cyber security support.

A new national cyber security strategy will also be published later in 2016 setting out the Government’s plans to improve cyber security for Government, businesses and consumers.