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UK Chancellor Kenneth Clarke announced a huge increase in the tax on the sale of packaged insurance, including extended warranties on electrical goods, in his Budget on Nov. 26, 1996. Clarke increased insurance premium tax on extended warranties from 2.5% to 17.5%, thereby removing the incentive for electrical appliance retailers selling warranties as part of a package deal to slash the Value Added Tax bill on an electrical appliance by inflating the value of the insurance element in the deal. However insurers and retailers are likely to pass most of the tax increase on to the customer.

Unemployed people on benefit who subsequently find work have been issued with incorrect tax codes for three years because the Government's Employment Service has failed to correct an error in one of its computer programs. The Inland Revenue has repeatedly called on the Employment Service to correct the fault which has led to the issue of incorrect P45s. However plans to change the computer software were cancelled three times because the Employment Service's main priority was to prepare for the introduction of the cost-cutting Job Seekers Allowance which came into force in Oct. 1996.

Ways of dealing with British tax returns due to be delivered by Jan 31 are examined in detail.

UK theatrical actors have had their status as self-employed restored by the tax authorities and can claim tax relief for the fiscal years from 1990-1991 to 1994-1995. They will have to send accounts to the tax authorities and can be paid a refund. Estimates will be accepted if they kept no accounts because their self-employed status had been temporarily withdrawn. They may also have to pay Class 4 social security contributions for those tax years unles they have a certificate of exemption.

The Inland Revenue encourages members of the public to approach tax offices for help with their tax affairs, but this can often be a very complicated procedure, with individual tax offices failing to communicate with each other. The Taxpayers' Charter was strengthened in 1993 with a new complaints procedure, however, and this appears to be working efficiently. Complaints can even be taken to the Revenue Adjudicator, and this office has already received 1,449 complaints in less than a year.

Two conditions should be met to qualify for Miras (Mortgage Interest Relief At Source) - the home must be the main residence and the person getting the relief must own all or part of it. Some couples do not meet these requirements after they separate or divorce. Some inspectors have been applying these rules strictly and removing relief. Inland Revenue is modifying the rules and effectively suspending couples' applications until they have settled their financial situations after separation.