Monday, May 29th, 2023
This month, we will discuss new HMRC warnings that Self-Assessment customers must continue to be very wary of potential scams, revisit the rent-a-room relief scheme, and even discuss how artificial intelligence (“AI”) could help your business.
We like to help keep our clients at the forefront of things here at Copia Wealth & Tax, so with that in mind, let’s start with AI.
There has been a lot in the press lately about the emergence of Artificial Intelligence as a tool that can help organisations run more efficiently. As recent media stories have indicated, there is a new wave of AI technology that is available to organisations, offering the opportunity to automate many routine or administrative tasks and potentially improve the overall efficiency of your business. The AI tool that seems to have been mentioned the most is ChatGPT.
ChatGPT is an advanced language model that can both understand and generate human-like text. It uses machine learning algorithms to analyse substantial amounts of data and provide insights and recommendations based on the patterns it detects and information that has been input into it. It has the potential to revolutionise the way businesses work and so its pros and cons need to be considered by organisations to help maintain a competitive edge.
It is worth spending some time familiarising yourself with it which can be done on Open Ai’s website, which developed the technology.
A popular use of ChatGPT is as a research assistant within an organisation and the system can be trained to automate repetitive tasks such as data entry, invoicing, and reporting, thereby freeing up staff time for more complex and strategic work.
Chat GPT can also be used to identify trends and flag potential risks. It can help you keep up to date with industry updates and trends by using sources such as news articles, reports, and social media. In addition, it can provide insights and recommendations based on the latest developments that it notices.
Some organisations have already integrated ChatGPT into workflows to provide real-time updates, insights, and reports. As it is a language model, ChatGPT is also being used to write or rewrite text such as emails, blogs, or content, using the tone you wish to convey to your audience.
ChatGPT is activated by a prompt, effectively some text that is input to initiate a conversation or request a response from the system. ChatGPT uses its learning algorithms to examine the prompt and generate a response that is relevant and accurate based on the input provided. The better the quality and structure of the prompt, the better the quality of the response.
It is important to check that the ChatGPT model being used has adequate safeguards in place to protect data confidentiality as you may be sharing sensitive data with the system.
Maintaining data integrity is also important, so any critical information generated by the model must be verified before making decisions based on it. As mentioned, the quality of the prompt is key to ensuring the output from the model is accurate.
Before using Chat GPT, it is worth getting some research followed by training. There are numerous platforms and tools through which ChatGPT can be accessed, and each has its own unique capabilities and so it is best to identify the one that best suits your needs.
There is no doubt there will be increasing use of this type of technology in the future and organisations that choose to ignore it could soon find themselves at a competitive disadvantage.
HMRC have been warning Self-Assessment customers to be alert to scammers and fraudsters as the level of their activity seems to be increasing.
There is a risk of being taken in by scam texts, emails, or calls usually either offering a refund or demanding unpaid tax (often threatening that you will be arrested if you do not pay up). The perpetrators are clever and their communications referring to the Self-Assessment return can often appear to be genuine.
The message from HMRC is to remain vigilant – note that HMRC would never make a call that threatens you with being arrested.
Anyone contacted by someone suspicious claiming to be from HMRC be vigilant and check the HMRC website for advice on scams – https://www.gov.uk/guidance/identify-hmrc-related-scam-phone-calls-emails-and-text-messages
You can also report any suspicious activity to HMRC, e.g. forward any suspicious texts claiming to be from HMRC to 60599 and any emails to firstname.lastname@example.org. Scam phone calls can also be reported to HMRC via an online form – https://www.gov.uk/government/organisations/hm-revenue-customs/contact/reporting-fraudulent-emails
The rent-a-room relief scheme is a set of special rules to help homeowners who rent-a-room in their own homes. To use the scheme, rents received in this way during the current tax year should not exceed £7,500, in which case, the tax exemption will be automatic and there are no specific tax reporting requirements. You can opt out of the scheme if you wish and record property income and expenses as usual.
Applying only to the letting of furnished accommodation and where a bedroom is rented out to a lodger by homeowners who are living in their home, if the property is owned jointly, the £7,500 limit is halved.
The rent-a-room limit includes any amounts received for meals, goods, and services provided, such as cleaning or laundry. If gross receipts are more than the limit taxpayers can choose between paying tax on:
a) the actual profit (gross rental minus actual expenses and capital allowances) or
b) the gross receipts (and any balancing charges) as reduced by the allowance but with no deduction being made for expenses or capital allowances.
It is a useful exemption that is worth taking advantage of if your situation falls within the above criteria.
If you want a sounding board for your plans to use AI in your organisation, are concerned about HMRC correspondence, or believe that rent-a-room relief might apply to your circumstances, to get the support you need, please contact our friendly team here at Copia Wealth & Tax by calling 01902 783172 for a confidential and FREE initial consultation. Alternatively, you can click HERE to contact us via our website.
We look forward to speaking with you.