Welcome to the July 2024 Newsletter from Beatons Group

Data published by HMRC recently revealed that it collected £1.39 billion in unpaid inheritance tax (IHT) in the past five years. £285 million in unpaid IHT was collected last year.

Meanwhile, research carried out by Pension Bee has suggested that UK pension savers are 'underestimating' the amount needed to retire comfortably.

HMRC collected £1.39 billion in unpaid inheritance tax in last five years, data shows

Data published recently by HMRC has shown that it collected £1.39 billion in unpaid IHT in the last five years.

According to the figures, HMRC recovered £285 million in unpaid IHT in the last tax year. The data also revealed that, since 2019, HMRC has initiated nearly 20,000 investigations into deceased individuals' estates where underpayment of IHT was suspected.

When a person dies IHT becomes due on their estate. IHT can also fall due on some lifetime gifts but most are ignored providing the donor survives for seven years after the gift.

The rate of tax on death is 40% and 20% on lifetime transfers where chargeable. Currently, the first £325,000 is chargeable to IHT at 0% and this is known as the nil-rate band.

Sean McCann, Financial Planner at insurer NFU Mutual, said: 'HMRC leaves no stone unturned in these investigations. For example, they will look at outgoings such as gifts made in the seven years before death, or premiums for life insurance policies which if not written in trust will form part of the taxable estate.

'In addition, the interest rate you pay on overdue inheritance tax stands at 7.75%, which is the highest rate for 30 years, and can add a significant amount to the bill.'

Savers 'dangerously underestimating' minimum cost of retirement

Research carried out by pension provider Pension Bee has suggested that UK savers are 'dangerously underestimating' the minimum amount needed to retire.

A survey of 1,000 savers carried out by Pension Bee showed that 23% were unsure of the total pension pot size needed to achieve the retirement income they desire.

Pension Bee said that, according to the Pensions and Lifetime Savings Association's (PLSA) Retirement Living Standards, a pension pot of £150,000 would only fund an individual's minimum retirement standard for ten years. Pension Bee suggested that working-age adults could be underestimating the true cost of retirement.

49% of those polled estimated that they would require a pension pot of around £250,000 or more. However, Pension Bee found that, generally, the survey showed that there was a lack of clear consensus in regard to desired annual income in retirement.

Becky O'Connor, Director of Public Affairs at Pension Bee, said: 'It's hard to plan for retirement without an idea of how much you might need, yet most Brits seem to be unaware of - or worse, dangerously underestimate - the true cost of retirement.

'A good pension pot is one that can provide enough money for the duration of retirement. As this exact amount will vary based on individual circumstances, pension calculators can be a helpful tool in setting financial goals and adjusting behaviours to achieve them.'

ESSENTIAL TAX DATES FOR JULY

5 July
Deadline for applying for a PAYE Settlement Agreement for 2023/24.

6 July
Deadline for forms P11D and P11D(b) for 2023/24 to be submitted to HMRC and copies to be issued to employees concerned.
Deadline for employers to report share incentives for 2023/24.

14 July
Due date for income tax for the CT61 period to 30 June 2024.

19 July
Class 1A NICs due for 2023/24.
PAYE, Student loan and CIS deductions due for the month to 5 July 2024.
PAYE quarterly payments are due for small employers for the pay periods 6 April 2024 to 5 July 2024.

31 July
Second payment on account 2023/24 due.

QUOTE OF THE MONTH

'Without resources flowing into new investment, it's hard to see how UK economic performance can improve.'

Dr George Dibb, Associate Director for Economic Policy at the Institute for Public Policy Research (IPPR), commenting on the UK's investment performance being the worst of any G7 country.

ON OUR WEBSITE

A wealth of resources for businesses
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For a comprehensive bank of guides covering Venture Capital Trusts, the dividend nil-rate and much more, please visit the Your Money area of our website.

UK's investment performance 'worse than every other G7 country'
Data published by think tank the Institute for Public Policy Research (IPPR) has found that the UK's investment performance is worse than every other country in the G7.
Click here for the full story

HMRC 'has not fined a single 'enabler' of offshore tax evasion', data reveals
A Freedom of Information (FOI) request has revealed that HMRC has not fined a single 'enabler' of offshore tax evasion in five years.
Click here for the full story

Tax changes since 2010 have 'adversely affected families with children'
Research carried out by the Institute for Fiscal Studies (IFS) has suggested that families with children were hit the hardest by tax and benefit changes since 2010.
Click here for the full story

Action needed to help firms 'navigate digital future'
Clear action is needed to help UK businesses 'navigate their digital futures', the British Chambers of Commerce (BCC) has warned.
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Revitalise 'Brand Britain', says CBI
Revitalising 'Brand Britain' in its first 100 days in office should be a priority for the party that wins the General Election, says the Confederation of British Industry (CBI).
Click here for the full story