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Air Passenger Duty
Air Passenger Duty (APD) is a departure tax levied on most air travel. The number of APD bands was reduced to two with effect from 1 April 2015. This measure lowered the costs of travelling to many countries including Australia, China, India and Brazil.
Since 1 May 2015, Air Passenger Duty (APD) is no longer payable by children under 12 on all short haul and long haul flights. Each geographical band has two rates of Air Passenger Duty, one for standard class and the second for 'other' higher classes of travel (usually business / first class). This measure will be extended to all children under 16 from 1 March 2016.
Not all airlines are automatically issuing refunds of APD for flights already booked. We would recommend any of our readers travelling with children aged 12 or under check with their airline to ensure that they are refunded any APD that was not payable. The amount of the refund will depend on when the flights were booked and the final destinations. The amount of the refund can range from £13 to £97 per child.
Time to Pay arrangements
HMRC’s 'Time to Pay' service is designed to help businesses and individuals who are experiencing cashflow problems. Any taxpayer who is genuinely unable to make a tax payment by the due date could potentially benefit from making an arrangement. If the application is accepted by HMRC, the taxpayer will be required to make arrangements to pay any tax and interest due by instalments.
Until now, there were no specific requirements for making the instalments. However, an interesting piece has appeared on HMRC’s blog that states that whilst payment by direct debit has always been preferred, from 3 August 2015 payment by direct debit will become mandatory.
HMRC says that this direct debit will become the default because:
- It is more cost effective and more secure than other payment methods
- It removes the chance that the customer will forget to make payment
- Payments are more likely to be correctly allocated
- Reduces the need for subsequent customer contact, saving time for the customer and HMRC
- Direct Debit scheme includes a guarantee to protect the customer
Where a taxpayer is unable to set-up a direct debit, other avenues for making payment can be explored. The change is not expected to affect existing arrangements but will apply going forward.
Tax credit renewals deadline
The 31 July is the last day for families and individuals who receive tax credits to renew their tax credit. As in previous years, there is expected to be a huge last minute rush and it may be difficult to contact HMRC by phone.
Claims can be renewed by post, phone or online. A press release from HMRC released on 24 July 2015 highlighted the fact that more than 540,000 people renewed their claims online. This is more than double the amount of people that had renewed their claims online by the same time last year. According to HMRC the online renewal process now takes less than 10 minutes on average, with satisfaction rates reaching 90%.
Claimants need to notify HMRC of any changes to the family size, child care costs, number of hours worked and salary. Details of previous year’s income also need to be completed to allow HMRC to check if the correct tax credits have been paid.
Claimants must also inform HMRC of any changes in circumstances not already reported during the year such as new working hours, different childcare costs or changes in pay.
Once the deadline has expired, anyone who has not yet renewed their tax credits should still ensure they do so as soon as possible as otherwise their payments may be stopped.