Newsletter 80

Headlines from our latest newsletter.  Please click on any of the links below for more information :

MORE HMRC GUIDANCE ON THE EMPLOYMENT ALLOWANCE

The Employment Allowance of up to £2,000 is available to most employers from 6 April 2014. - See more at: http://www.walkerthompson.co.uk/newsletters/Newsletter-80?viewunapprovedrecord=true#More

P11D FORMS DON’T GET THEM WRONG

HMRC have published a list of common errors in the completion of forms P11D and guidance that medical benefits for lower paid employees are not reportable. - See more at: http://www.walkerthompson.co.uk/newsletters/Newsletter-80?viewunapprovedrecord=true#P11D

SHARED PARENTAL LEAVE

The current system of statutory pay and leave entitlements for employed parents is to be reformed for babies due (or adopted children placed) on or after 5 April 2015. - See more at: http://www.walkerthompson.co.uk/newsletters/Newsletter-80?viewunapprovedrecord=true#Shared

ICEBREAKER TAX AVOIDANCE SCHEME REJECTED BY HMRC

In a high profile decision HMRC has won a case in which the Icebreaker partnership schemes were shut down, after the tribunal ruled it was set up to shelter more than £120m in tax. - See more at: http://www.walkerthompson.co.uk/newsletters/Newsletter-80?viewunapprovedrecord=true#Icebreaker

PAY YOUR PAYE ON TIME OR FACE IN-YEAR INTEREST ON LATE PAYMENTS

HMRC have issued further guidance on late payment interest on PAYE and CIS payments for 2014/15 onwards and how to avoid it. - See more at: http://www.walkerthompson.co.uk/newsletters/Newsletter-80?viewunapprovedrecord=true#Pay

VAT UPDATE AND FUEL SCALE CHARGES

HMRC have issued guidance on a number of VAT changes including confirmation of the updated VAT Fuel scale charges which apply from the beginning of the next prescribed VAT accounting period starting on or after 1 May 2014 - See more at: http://www.walkerthompson.co.uk/newsletters/Newsletter-80?viewunapprovedrecord=true#VAT

PROPOSED NEW RULES FOR EASIER PROSECUTION OF OFFSHORE TAX EVADERS

The government will consult on plans to introduce a new strict liability criminal offence for individuals who hide their money offshore. - See more at: http://www.walkerthompson.co.uk/newsletters/Newsletter-80?viewunapprovedrecord=true#Proposed

LATE PAYMENTS TO SMALLER BUSINESSES ON THE INCREASE

According to a recent survey by the Forum of Private Business (FPB) almost one in four smaller businesses experienced an increase in the number of late payments during 2013. - See more at: http://www.walkerthompson.co.uk/newsletters/Newsletter-80?viewunapprovedrecord=true#Late

VAT Place of supply of digital services and VAT Mini One Stop Shop (MOSS) guidance

On 1 January 2015, new VAT place of supply rules will come into effect for business to consumer transactions (B2C) supplies of broadcasting, telecommunications and e-services (‘digital services’).

The current VAT place of supply rules for business to business (B2B) supplies are unaffected.

The primary purpose of this guidance is to provide UK businesses with information in the period leading up to the 1 January 2015 implementation date. This is to help them to prepare for the rule change, as well as to decide whether or not they want to register to use the related EU VAT Mini One Stop Shop (MOSS) simplification scheme.

It should be noted that the European Commission has published detailed Explanatory Notes, giving its view on how the VAT place of supply of services and VAT MOSS legislation should be interpreted and applied across the EU.

It is recommended that businesses also consult this guidance, which can be found on the Commission’s DG TAXUD website.

Although the Notes are not binding on Member States, they have been produced in consultation with tax authorities and businesses from across the EU.

The Bribery Act

The City of London Police have issued an extremely positive video message in respect of anti corruption under The Bribery Act. Businesses with overseas trade would be well advised to watch it and where required put in place suitable measures to prevent the possible consequences.  City of London Police Overseas Anti Corruption Unit

Newsletter 79

Headlines from our latest newsletter.  Please click on any of the links below for more information :

HMRC GUIDANCE ON NEW PENSION FLEXIBILITY

Following the Budget announcements regarding pension flexibility HMRC have now issued some guidance for those individuals who may wish to review their pension options - See more at: http://www.walkerthompson.co.uk/newsletters/Newsletter-79#HMRC

EMPLOYERS NO LONGER ABLE TO RECLAIM SSP

The Percentage Threshold Scheme (PTS), which allows employers to reclaim Statutory Sick Pay (SSP) in certain circumstances, is abolished from 6 April 2014 - See more at: http://www.walkerthompson.co.uk/newsletters/Newsletter-79#SSP

DISCLOSURE FACILITY FOR THOSE WITH UNDISCLOSED SECOND INCOMES

The Second Incomes Campaign is an opportunity open to individuals in employment who have an additional untaxed source of income - See more at: http://www.walkerthompson.co.uk/newsletters/Newsletter-79#Disclosure

MORE GUIDANCE ON CLASS 3A NIC

Further guidance has been issued on Class 3A National insurance contributions (NIC) - See more at: http://www.walkerthompson.co.uk/newsletters/Newsletter-79#NIC

MORE HMRC GUIDANCE ON THE EMPLOYMENT ALLOWANCE

The Employment Allowance of up to £2,000 is available to most employers from 6 April 2014 - See more at: http://www.walkerthompson.co.uk/newsletters/Newsletter-79#Allowance

TAX-FREE CHILDCARE

Details of the new Tax-Free Childcare scheme which is to be launched in autumn 2015 have been announced - See more at: http://www.walkerthompson.co.uk/newsletters/Newsletter-79#Childcare

INCREASE IN NMW RATES

The Government has approved a rise in the National Minimum Wage rates which will come into effect on 1 October 2014 - See more at: http://www.walkerthompson.co.uk/newsletters/Newsletter-79#NMW

ADVISORY FUEL RATES FOR COMPANY CARS AND FUEL BENEFIT CHARGE

Where private fuel is provided by the employer for a company car then a separate benefit is assessable on the employee - See more at: http://www.walkerthompson.co.uk/newsletters/Newsletter-79#Advisory

P11D DEADLINE APPROACHING

The forms P11D, and where appropriate P9D, which report details of expenses and benefits provided to employees and directors for the year ended 5 April 2014, are due for submission to HMRC by
6 July 2014 - See more at: http://www.walkerthompson.co.uk/newsletters/Newsletter-79#P11D

HMRC thinking about sharing taxpayer data

HMRC it seems is now consulting upon whether to allow third parties to purchase taxpayer data!

The data, which HMRC say would be “anonymised with robust safeguards”, could be made available to private companies, research organisations or public bodies.

HMRC say that the data would only be shared in circumstances where there is a clearly defined public benefit.

Walker Thompson questions the choice of wording here where sharing data involves the attachment of a price.

HMRC say that any third party acquiring data would be subject to the same level of confidentiality as HMRC’s own staff which in every respect is probably of little comfort.

David Davis MP (cons) said that such plans were “Borderline Insane” and said that officials clearly had no understanding of the risks involved in an electronic age.

And we still hear stories regularly of laptops and phones left in taxis and on trains etc by the very people who will be potentially involved in this.

Just because you ask HMRC to do something, don’t assume anything !

A first tier tax tribunal has upheld the decision to issue a penalty after the taxpayer failed to pay his PAYE on time.

In the case of Ross v HMRC [2014] UKFTT 292 (TC) the taxpayer had filed his tax return on time, owing £807.40, He elected for HMRC to collect it through payroll by adjusting his PAYE code which is at best a deferral but has cash flow advantages.

The taxpayer thought he had done his work for another year and forgot about it until a £40 penalty notice arrived.

HMRC sent a letter later rejecting an appeal against the penalty, saying there was insufficient PAYE liability to enable the additional SA tax to be collected through the tax code. 

The taxpayer then requested a review of HMRC’s decision stating that the election to have the tax collected through the tax code had been made ahead of the statutory time limit of the 31 January 2013 and the tax could have been collected through the income for 2013/2014 using a 'K-code', if necessary.

HMRC advised that the tax code would not be adjusted, saying that it was optional as to whether they would do this.

Despite the fact that under PAYE he could have paid the tax spread over 12 months, he was penalised for not paying it until after his appeal letter had been dealt with.

The tribunal agreed with HMRC that it acted correctly by not adjusting the tax code and it was “reasonable and proper” to expect him to have paid his tax on time - on or before 31 January 2013.

HMRC said that they will not code out a sum that would double the normal PAYE due for the year and cannot create deductions via a 'K-code’ that would be more than 50% of income. 

In order to avoid unnecessary & somewhat arbitrary penalties Walker Thompson suggests that taxpayers do not rely upon future coding out but actually pay Self Assessment liabilities which avoids HMRC taking punitive action or indeed administratively getting it wrong.

NEWSLETTER 78

BUDGET 2014

The Chancellor delivered his Budget Speech on Wednesday 19 March and set the scene for the announcements stating that: ‘If you’re a maker, a doer or a saver: this Budget is for you.’
- See more at: http://www.walkerthompson.co.uk/newsletters/Newsletter-78#BUDGET

CHANGES TO THE ISA REGIME

From 6 April 2014 the overall ISA savings limit will be increased from £11,520 to £11,880 of which £5,940 can be invested in cash.
- See more at: http://www.walkerthompson.co.uk/newsletters/Newsletter-78#ISA

SAVINGS BAND AND RATE FOR 2014/15

The Chancellor announced changes to the maximum amount of an eligible individual’s savings income that can qualify for the starting rate of tax for savings.
- See more at: http://www.walkerthompson.co.uk/newsletters/Newsletter-78#Savings

PENSION CHANGES

The Chancellor has announced a range of significant measures to bring greater flexibility to individuals who want to access funds in defined contribution pension schemes.
- See more at: http://www.walkerthompson.co.uk/newsletters/Newsletter-78#Pension

PENSIONS - CHANGES TO COME

The Government plans to bring even greater flexibility into the pension system from April 2015.
- See more at: http://www.walkerthompson.co.uk/newsletters/Newsletter-78#Changes

DOUBLING OF THE ANNUAL INVESTMENT ALLOWANCE

The Annual Investment Allowance (AIA) provides a 100% deduction for the cost of most plant and machinery (not cars) purchased by a business up to an annual limit and is available to most businesses.
- See more at: http://www.walkerthompson.co.uk/newsletters/Newsletter-78#AIA

RESEARCH AND DEVELOPMENT (R&D) RELIEF

R&D relief gives additional tax relief to companies for expenditure incurred on R&D projects that seek to achieve an advance in science or technology.
- See more at: http://www.walkerthompson.co.uk/newsletters/Newsletter-78#Research

NEW TAX-FREE CHILDCARE SCHEME

The Government has announced details of the new Tax-Free Childcare scheme which is to be launched this autumn.
- See more at: http://www.walkerthompson.co.uk/newsletters/Newsletter-78#Childcare

SHARED PARENTAL LEAVE AND PAY

The Government has issued the draft regulations for Shared Parental Leave and Pay which are expected to become law from 1 October 2014 and will apply to babies due from April 2015.
- See more at: http://www.walkerthompson.co.uk/newsletters/Newsletter-78#Shared

HMRC ISSUE GUIDANCE ON BITCOIN

HMRC have issued guidance on the tax treatment of income received from, and charges made in connection with, activities involving Bitcoin and other similar cryptocurrencies.
- See more at: http://www.walkerthompson.co.uk/newsletters/Newsletter-78#HMRC

ADVISORY FUEL RATES FOR COMPANY CARS

New company car advisory fuel rates have been published to take effect from 1 March 2014.
- See more at: http://www.walkerthompson.co.uk/newsletters/Newsletter-78#Advisory

PAYE PENALTIES

HMRC are to introduce further interest and penalties for the late submission of PAYE RTI returns and for late payment of PAYE liabilities.
- See more at: http://www.walkerthompson.co.uk/newsletters/Newsletter-78#PAYE