Saturday, 14 February 2015

A letter from HMRC in the post today...

A rattle of the letterbox and a long brown envelope dropped onto the doormat. Hubbie picked it up and plonked it on my desk, face up. Bold black capitals on the front pronounced it PRIVATE.

 "It looks official!" I thought, wondering if it was a ticking off for publicly telling HMRC that I don't like the new EU VATMOSS scheme or a letter to say that the HMRC mainframe had eaten my Tax Return and adjudged I owed them £3m in unpaid tax!

Turning it over I saw it was from the NI Contributions Office at Newcastle upon Tyne, and was amused to read to notice printed on the back of the envelope, "HMRC changed banks in April 2009. The old accounts will be closing in 2010. To check you are using the correct account go to www.hmrc.gov.uk/bankaccounts."  

Just for the heck of it, I typed the URL into Firefox and went to have a look. It seems the page has moved, but there is an auto-redirect, which is nice. It now goes to https://www.gov.uk/dealing-with-hmrc/paying-hmrc, where you can find a page called Paying HMRC - with a handy dandy list of links to all the sorts of things you might want (or not want!) to pay them for.  Neat huh?

Anyhow, giggling over the fact that it's now 2015 and the message related to something back in 2009 - 2010 - yes, I know I should appreciate the fact that they are still using up old envelope stock and had not just binned the lot once 2010 had come and gone - I thought that I had better read the letter inside it.

"Probably telling me that NI rates are going up in April," I surmised, but no, I was wrong! The letter, which incidentally was dated 12th December 2014 (is the post really so slow these days?!) stated, "Plans to simplify the way you pay Class 2 National Insurance contributions."

My heart sank! In my experience anything that claims to simplify things usually ends up making it more complicated.  As Woodie Guthrie said, "Any fool can make something complicated. It takes a genius to make it simple.”  I'm not sure how many geniuses there are working for HMRC, but I must say that I cannot see how the new scheme will make things simpler for me!

Currently I pay Class 2 National Insurance contributions by a monthly Direct Debit. I'm self employed and my income varies depending on what work I am doing and when. The current DD takes £11 and £13.75 alternately. The letter tells me it will cease after the July 2015 payment.  After that I will be expected to pay my Class 2 contributions along with any Income Tax and Class 4 contributions. My variable income can handle a small DD each month quite well, but if I have to pay a lump sum once per year then it means I have to remember to put extra money aside for that. I presume it also means I would be fined by HMRC if I was late paying it, as late Income Tax payers currently are.

Feeling very fed up about the change, which has come hard on the heels of last month's EU VAT changes for cross-border sales which scuppered for the time-being a whole set of new digital products planned for this year, I read on.

The letter says, "If your Self Assessment payments are up to date, and you would prefer to spread the cost of your tax and National Insurance contributions, there will be an option to set up a Budget Payment Plan. We will provide more details on how to do this close to the time."

So, if I can set up a budget plan (presumably with monthly payments) why can't I just carry on paying by monthly DD as I do now???

Given that the letter I have been sent was dated 12th December 2014 and reached me on 14th February 2015, I don't expect to hear from them again about the Budget Plan until the middle of 2016!

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