Newsletter 87

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

AUTUMN STATEMENT

The Chancellor George Osborne delivered his Autumn Statement on 3 December - See more at: http://www.walkerthompson.co.uk/newsletters/Newsletter-87#Autumn

STAMP DUTY LAND TAX (SDLT)

One of the Autumn Statement announcements is a major reform to SDLT on residential property transactions - See more at: http://www.walkerthompson.co.uk/newsletters/Newsletter-87#Stamp

INCORPORATION - RESTRICTION OF RELIEF FOR GOODWILL AND ENTREPRENEURS’ RELIEF

Corporation tax relief is given to companies when goodwill and intangible assets are recognised in the financial accounts - See more at: http://www.walkerthompson.co.uk/newsletters/Newsletter-87#Incorporation

EMPLOYMENT BENEFITS CHANGES AHEAD

In the Autumn Statement the government announced a package of measures which will impact the treatment of employee benefits in kind and expenses - See more at: http://www.walkerthompson.co.uk/newsletters/Newsletter-87#Employment

PERSONAL ALLOWANCES AND TAX BANDS 2015/16

For those born after 5 April 1948 the personal allowance will be increased from £10,000 to £10,600 - See more at: http://www.walkerthompson.co.uk/newsletters/Newsletter-87#Personal

STARTING RATE OF TAX FOR SAVINGS INCOME

From 6 April 2015, the maximum amount of an eligible individual’s savings income that can qualify for the starting rate of tax for savings will be increased to £5,000 from £2,880, and this starting rate will be reduced from 10% to nil - See more at: http://www.walkerthompson.co.uk/newsletters/Newsletter-87#Savings

HOLIDAY PAY AND OVERTIME

In the judgment an Employment Appeal Tribunal (EAT) has decided that holiday pay should reflect non-guaranteed overtime - See more at: http://www.walkerthompson.co.uk/newsletters/Newsletter-87#Holiday

ADVISORY FUEL RATES FOR COMPANY CARS

New company car advisory fuel rates have been published which took effect from 1 December 2014 - See more at: http://www.walkerthompson.co.uk/newsletters/Newsletter-87#Advisory

DO YOU EMPLOY ANYONE UNDER THE AGE OF 21?

From the 6 April 2015, if any of your employees are under the age of 21 you may no longer need to pay employer Class 1 secondary National Insurance contributions (NICs) on their earnings - See more at: http://www.walkerthompson.co.uk/newsletters/Newsletter-87#21

GIFT AID DECLARATION TO BE IMPROVED - POTENTIALLY SAVING CHARITIES BILLIONS OF POUNDS

The Gift Aid model declaration form is to be improved, to stop charities potentially losing out on billions of pounds of Gift Aid - See more at: http://www.walkerthompson.co.uk/newsletters/Newsletter-87#Gift

HELPING EMPLOYERS IDENTIFY A PENSION SCHEME FOR AUTOMATIC ENROLMENT

The Pensions Regulator (TPR) has opened consultation on a proposal to publish a list of pension schemes that are available to any employer, regardless of the number or workers the employer has or their levels of pay - See more at: http://www.walkerthompson.co.uk/newsletters/Newsletter-87#Pension

HMRC WARNING ‘TEN THINGS YOU NEED TO KNOW ABOUT TAX AVOIDANCE’

HMRC have published a list of factors to consider before buying into a ‘scheme’ - See more at: http://www.walkerthompson.co.uk/newsletters/Newsletter-87#HMRC

Autumn Statement

The Chancellor of the Exchequer yesterday delivered his Autumn Statement to the House of Commons

Some of the key points for business are summed up here

 http://www.bbc.co.uk/news/uk-politics-30307528

More detailed information will be available shortly through our office and in the Walker Thompson Newsletter

Stamp Duty

The Chancellor yesterday made some large changes in the way Stamp Duty will affect residential properties

Reform of residential property stamp duty so that rates apply only to that part of the property price that falls within each band

0% paid for the first £125,000 then 2% on the portion up to £250,000

5% up to £925,000, then 10% up to £1.5m; 12% on anything above that, saving £4,500 on average priced home

Changes to come into effect at midnight on Thursday, 4 December

Landlords

The Government has issued guidelines requiring Landlords of properties to verify the status of their tenants by requiring relevant ID and evidence of their rights to be in the UK. The scheme will begin in early 2015 within the West Midlands and will carry fines of up to £3,000 for Landlords who do not comply. Whilst there may appear to be all manner of excuses and reasons not to act as unofficial border agency “snoopers” we urge all private landlords to begin putting in measures to record tenants ID . 

See the links courtesy of BBC News.

http://www.bbc.co.uk/news/uk-england-birmingham-29059538

http://www.bbc.co.uk/news/uk-england-birmingham-30251741

HMRC withdraws ‘little used’ IR35 business tests

HMRC is to withdraw the business entity tests (BETs) intended to help taxpayers assess whether they might be caught by the IR35 legislation, after a review conducted by the IR35 Forum found that the tests were used “very little” and were not fulfilling their intended purpose

Newsletter 85

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

MIS-SOLD INTEREST RATE HEDGING PRODUCTS

Following a review of the way some banks sold Interest Rate Hedging Products (IRHP), some businesses are entitled to redress payments. - See more at: http://www.walkerthompson.co.uk/newsletters/Newsletter-85#MIS-SOLD

GIFT AID AND FREE ADMISSION

HMRC have updated their guidance for charities to explain that the terms and conditions attached to a donation that gives a right of admission to property cannot include a right to a full or partial refund of the admission payment. - See more at: http://www.walkerthompson.co.uk/newsletters/Newsletter-85#GIFT

UK BROADBAND VOUCHER SCHEME OVERHAULED

Businesses are being urged to take advantage of a scheme to get faster, cheaper broadband. - See more at: http://www.walkerthompson.co.uk/newsletters/Newsletter-85#UK

LATEST FAKE ‘HMRC’ PHISHING SCAM

We are aware that there is a new bogus email which is phishing scam aimed at taxpayers. - See more at: http://www.walkerthompson.co.uk/newsletters/Newsletter-85#LATEST

DEADLINE FOR ‘PAPER’ SELF ASSESSMENT TAX RETURNS

For those individuals who have previously submitted ‘paper’ self assessment tax returns the deadline for the 2013/14 return is 31 October 2014. - See more at: http://www.walkerthompson.co.uk/newsletters/Newsletter-85#DEADLINE

LATEST LABOUR MARKET EMPLOYMENT FIGURES

The Office for National Statistics has announced that the latest statistics, based on the period May to July 2014, show that employment continued to rise and unemployment continued to fall. - See more at: http://www.walkerthompson.co.uk/newsletters/Newsletter-85#LABOUR

HMRC Gets it wrong again !

Leaked e-mails from within HMRC allegedly reveal that HMRC have yet again made serious miscalculations of peoples tax liabilities.

Following on from last years fiasco when it admitted that over 5 million people might have been charged incorrectly, attempts at correction have apparently not resolved the issue and notices which advised taxpayers are apparently, and according to HMRC, not demands for tax to be paid!  An HMRC spokesman in admitting the problem has said that it will take 6–8 weeks to resolve the latest issue.  Taxpayers, predominantly those on PAYE who have received refunds have been requested not to cash the cheques!  The leaked e-mail suggests that the miscalculations are due to the changeover to Real Time Information software which businesses now use to calculate payroll.  

HMRC able to take up to £17,000 from taxpayers

News has emerged of HMRC being able to take up to £17,000 from taxpayers as part of its recovery procedures. Walker Thompson wants to clarify here that this is a mechanism to code out larger tax debt via PAYE and is NOT linked to the proposals allowing HMRC access to peoples bank accounts.

The change, expected to raise £115m in the 2015-16 tax year, has aroused less controversy than plans to deduct the money from bank accounts because it spreads payments over the year and does not affect those earning less than £30,000, who will still be subject to a £3,000 limit. HMRC has introduced a sliding scale so only those earning more than £90,000 would face a potential £17,000 deduction. It has also guaranteed that it would not take more than half the salary of those affected.

We assume this means Gross Salary but with certain high earners the tax code already accounts for various benefits in kind such that taking half of salary through additional coding could possibly leave no net pay !

Newsletter 84

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

RTI PENALTIES FOR SMALL EMPLOYERS DELAYED

HMRC have confirmed that employers with fewer than 50 employees will face automated in-year penalties for late real-time PAYE returns from 6 March 2015 which is later than had originally been anticipated. - See more at: http://www.walkerthompson.co.uk/newsletters/Newsletter-84#RTI

VAT FOR DIGITAL BUSINESSES AND THE MINI ONE STOP SHOP

The one-stop VAT service starts from 1 January 2015 for businesses supplying what are collectively known as ‘digital services’ in the EU. - See more at: http://www.walkerthompson.co.uk/newsletters/Newsletter-84#VAT

NATIONAL MINIMUM WAGE RISES

The National Minimum Wage (NMW) is a minimum amount per hour that most workers in the UK are entitled to be paid. - See more at: http://www.walkerthompson.co.uk/newsletters/Newsletter-84#NMW

FUEL ADVISORY RATES

New company car advisory fuel rates have been published which took effect from 1 September 2014. - See more at: http://www.walkerthompson.co.uk/newsletters/Newsletter-84#Fuel

AUTUMN STATEMENT DATE ANNOUNCED AND HAVE YOUR SAY

The government has announced that the Autumn Statement 2014 will take place on 3 December. - See more at: http://www.walkerthompson.co.uk/newsletters/Newsletter-84#Autumn

P11D

The Daily Mail reported yesterday on the thousands of warning letters sent out incorrectly to UK businesses.

HMRC blamed computer updating – or lack of it – for the error which related to penalties for non submission of forms P11D which declare employees benefits in kind.

Many commentators remain concerned that HMRC want the right in law to take treasury debt direct from bank accounts and state that this sort of internal mis-management is exactly why such powers should not be permitted.

One last chance for landlords

HMRC has announced one last chance for landlords who fail to declare all their rental income to come clean - or else take the consequences. 

HMRC estimates that up to 1.5 million landlords may be underpaying up to £500 million in tax every year. Under the Revenue’s Let Property Campaign, landlords who may owe tax – whether through misunderstanding the rules or deliberate evasion – can come forward and declare any unpaid tax, although they will have to pay possible penalties and interest. 

The Revenue says it will be “working with a variety of bodies over the next few months to develop tools and guidance to support landlords of all types and help them get their affairs up to date.”

HMRC says it will use information it holds about property rental in the UK and abroad, along with information already held on its digital intelligence system Connect, to identify people who have not paid what they owe. 

This is also likely to include cross-referencing letting agents’ returns with those of their landlord clients. For investors that fail to come forward, higher penalties – or even criminal prosecution – could follow.

Further details of the amnesty can be found at https://www.gov.uk/let-property-campaign

Courtesy of Alternative Estates Coventry

Small firms win RTI reprieve

In the latest relaxation of RTI rules, HMRC has announced that it will exempt small employers with 49 or fewer staff from RTI late filing penalties until March 2015.  Until that date, they will be allowed to submit PAYE information monthly.  "We know from our experience of rolling out of RTI that to ensure a smooth transition for our customers its best to introduce changes in stages.  This will allow us to update our systems and enhance our guidance and customer support as needed.  We know that those who have had most difficulty adjusting to real-time reporting have been small businesses, so this staged approach means they have a little more time to comply with the new arrangements before facing a penalty", HMRC's director-general for personal tax Ruth Owen comments.  The exemption was welcomed by the CIOT as a "positive step", however, it warned that wrinkles remain in the overall system.  It warns that the taxman is guilty of firing off erroneous message to small firms, accusing many of these firms of late filing, non-filing and late payment.  This results in additional form-filling for these business and often requires a lengthy appeals process.

Experts predict NI changes

The Sunday Times reflects on a report by the King's Fund which suggests more than 1m over-65s should prepare for an increase in their tax bills.  The report recommends an end to the exemption that allows those who continue working past state retirement age to avoid 12% NI.  Tax experts say the report could pave the way for the current system of NI to be abolished.  Andrew Hubbard of Baker Tilly said "We have employment taxes that have to be paid if you are working.  Why should you be allowed to avoid them because you have celebrated a certain birthday?"  Chas Roy-Chowdhury, head of taxation at the ACCA, agreed, saying "I think it highly likely that something will change".

Property taskforce targets the North West

A new taskforce launched by HMRC is now tackling people trying to dodge property tax in the North West and North Wales.  The taskforce, which aims to recover £5m, is targetting people who have sold one or more properties and have not paid CGT or disclosed rental income.  So far the HMRC's property crackdown, which has seen similar taskforces set up in London, the South East and Yorkshire, has recovered more than £12m "HMRC taskforces are deployed in sectors and areas where we've detected a high risk of tax evasion.  For example, in a previous property taskforce in London in 2013 we uncovered a barrister who had evaded £471,512 in unreturned capital gains", Jennie Granger, Director General of Enforcement and Compliance at HMRC, explains.  In the Telegraph Matthew Lynn writes that tax campaigns targeting landlords are too heavy handed and that people should be encouraged to profit from buying and letting property.

Small firms facing rates rise

Around 67,000 SMEs in England face above-inflation rises in their bills next year, according to property consultancy Gerald Eve.  The firm points out that the end of transitional relief for small businesses in April 2015 has coincided withe George Osborne's decision to postpone a revaluation of the property values used to calculate the tax, with many facing steep rises in rates as a result.  The FSB has said business rates are among the biggest concerns of its members, with online competitors increasingly able to undercut those paying for physical premises.  Jerry Schurder, head of rating at Gerald Eve, said the chancellor should cap rates rises to inflation in December's Autumn Statement and promise a radical overhaul of the system

Trader jailed over tax scam

An internet trader has been jailed for two years after failing to pay tax or VAT on at least £300,000 of his earnings.  John Woolfenden sold CDs, DVDs and console games on various websites, but made no mention of his online trading income on his self-assessment tax returns.  A spokesperson stated "HMRC will pursue every avenue to ensure evaded taxes are restored to the taxpayer and public finances".

Raise taxes to reform care system

A report commission by the King's Fund think-tank is calling for a review of wealth taxation, including IHT, in order to pay for radical reform of the UK's care system.  The report recommends everyone over 40 and those on more than £42,000 should pay extra NI, and that pensioners who continue to work should be charged NI for the first time.  Wealthy pensioners should also be stripped of free prescriptions, free TV licences and the winter fuel allowance, potentially freeing up billions of pounds.  Dame Kate Barker, who chaired the report's panel, stated "if we are going to provide a decent society and decent care, we're going to have to find the money".

Pensions crisis looms

A survey from the Chartered Institute of Payroll Professionals has found that almost half the working population have no form of retirement provision.  The poll of 2,000 people found that 49% were neither members of a company scheme nor had private provision.  The findings come despite a government drive to ensure that all companies operate pension schemes for their workforces by 2017.

December date for Autumn Statement

George Osborne is to deliver the Autumn Statement, an annual update on the state of the economy, on December 3.

Britain rises up world league table

Britain rose one place to ninth in the World Economic Forum's ranking of the world's most competitive economies.  The forum said that, overall, the UK had "one of the most sophisticated business environments in the world", underpinned by an efficient labour market and the capacity for innovation among its businesses.

Barlow issues apology over tax affairs

Former Take That singer-songwriter Gary Barlow has used Twitter to apologise "to anyone who was offended by the tax stories earlier this year".  A second tweet said "With a new team of accountants, we are working to settle things with all parties involved ASAP".  Mr Barlow and two band mates faced a multimillion-pound tax bill after attempting to shelter £66m in a tax scheme called Icebreaker.

Companies face prosecution for failing to prevent economic crime

Speaking at the Cambridge Symposium of economic crime, Jeremy Wright, the attorney-general, confirmed the government is considering widening criminal liability for the corporate world through the creation of an offence of a corporate failure to prevent economic crime, in a move that would significantly increase the reach of the Serious Fraud Office, according to its director David Green.  Separate rules due to come into force in October will see firms fined as much as 400% of any profits accrued from bribery.  The FT notes that the SFO has not yet prosecuted a company under the Bribery Act for failing to prevent corruption.  Neill Blundell at Eversheds comments "it is interesting to note that prior to any such prosecution, there is now the idea of extending the provision of all economic crime".  Meanwhile, the director of the economic crime command at the UK's National Crime Agency, Donald Toon, has warned professional services firms that they will face investigation should they "enable" organised crime with their services.  Mr Toon said a plan would be formulated by the end of the year on how to tackle "professional enablers" but action by both the NCA and the solicitors' regulator could happen sooner.

Self-employment reaches record high

The Guardian's Angela Monaghan cites ONS figures which show self-employment in the UK is at its highest level since records began almost 40 years ago.  The proportion of the total workforce self-employed is 15% (4.6m people), compared with 13% in 2008, and 8.7% in 1975.  Frances O'Grady, the TUC general secretary said its "worrying that much of the recent increase is due, as the ONS says, to the limited opportunities for people to move out of self-employment".  Ms O'Grady continued "Self-employment appears to be a key factor in the UK economy's shift towards low-paid work.  Many people want to work for themselves.  But the growth in self-employment is reducing people's pay, job security and retirement income - and is likely to be reducing the government's tax take, too".

Banks remain risk averse

The quarterly Business Monitor report from BDRC has found that the proportion of successful new applications for bank lending was in steady decline with 53% of loan applications from SMEs, including renewals, being successful in the 18 months to June compared with 60% in the period to March 2013.  The Forum of Private Business warned that "distrust of the banking sector is continuing to affect the growth plans of some small businesses and the pace of the recovery" while EFF, the manufacturers' group, said that "discouraged demand" for bank lending remained an issue.

Scrap HMRC’s recovery powers

The Law Society has joined the call from the accountancy profession and the leading building societies for HMRC to scrap its plans which would allow it to seize money from taxpayer bank accounts. The Law Society branded the debt recovery position as “draconian & regressive” . Whilst there is no doubt that tax due should be paid there are already procedures in place which are deemed to be perfectly adequate and sufficient. Data Protection and human rights legislation will need to be examined closely if HMRC insist upon proceeding with their plans. ACCA have re-stated their concerns and in particular the view that HMRC will continue with implementation of the practice irrespective of what people say.

SME Lending

Lending by the major UK Banks to business fell again in July on a net basis. The British Bankers Association said that the fall in July of £941m was not as steep as previous months. A report by The Federation for Small Businesses suggests that its members were now in a position to take advantage of the economic recovery but with firms looking to invest and recruit to achieve this Walker Thompson still finds the figure disappointing and reflects the ongoing trust issue with the banks.

Newsletter 83

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

GUIDANCE ON CHANGES TO VAT FILING RULES

The majority of businesses have to file their VAT returns online. HMRC have issued guidance on changes to VAT rules which introduce additional exemptions to the requirement to file VAT returns online. - See more at: http://www.walkerthompson.co.uk/newsletters/Newsletter-83#Guidance

PENSIONS REGULATOR USES FORMAL POWERS OVER AUTO ENROLMENT

The Pensions Regulator (TPR) has issued the first quarterly bulletin which details how many times it has needed to use its formal powers to ensure employers comply with their automatic enrolment duties. - See more at: http://www.walkerthompson.co.uk/newsletters/Newsletter-83#Pensions

PENSION SCAMS

HMRC and the Pensions Regulator (TPR) are publicising the availability of revised leaflets which warn people of the consequences of pension liberation scams. - See more at: http://www.walkerthompson.co.uk/newsletters/Newsletter-83#Pension

HMRC LATEST DISCLOSURE OPPORTUNITY

HMRC have announced the details of their latest disclosure opportunity which is expected to give approximately 16,000 tax avoidance scheme users the opportunity to pay the tax they owe. - See more at: http://www.walkerthompson.co.uk/newsletters/Newsletter-83#Disclosure

HMRC WARN OF INCORRECT RTI LETTERS

HMRC have warned that incorrect RTI letters have been issued. - See more at: http://www.walkerthompson.co.uk/newsletters/Newsletter-83#RTI

HMRC TO ISSUE PENALTIES FOR LATE SUBMISSION OF PAYE RETURNS

In the latest Employer Bulletin HMRC are warning that employers’ who fail to submit their PAYE submissions, Full Payment Submission (FPS) or where appropriate Employer Payment Summary (EPS) on time will face penalties. The penalties are being introduced from October 2014. - See more at: http://www.walkerthompson.co.uk/newsletters/Newsletter-83#Penalties

Crowdfunding For Clear Books

Tim Fouracre, the founder and CEO of cloud-based accounting software business Clear Books, is looking to use crowd funding to raise additional capital by offering 275,000 shares at a subscription price of £12 per share when it goes live on to the general public from 4 August, and is initially open to existing shareholders.

Clear Books has increased its customer base from 5,000 to more than 7,000 small businesses since September 2013, and increased its monthly revenue from £60k to £100k, achieving a 74% increase in annual revenue to the financial year 31 March 2014.

HMRC DENY TERMINAL ILLNESS AS REASONABLE EXCUSE !

HM Revenue & Customs have succeeded in a penalty claim for late tax payment when the taxpayer was diagnosed as terminally ill.  Given the circumstances, the amount of tax due and the amount of recoverable penalty it does question HMRC's approach to tax recovery on a cost benefit basis.

The full story can be found at  http://www.accountingweb.co.uk/article/man-s-terminal-illness-not-reasonable-excuse-late-payment-tax/562710

Living In A Fools Paradise

Business confidence might be galloping ahead, but many companies - not just the fabled zombies - continue to live in a fool's paradise of low interest rates and bank forbearance. Such complacency about the levels of corporate insolvency would be premature at best and naive at worst. The modest overall fall in company insolvencies should not be confused with a sustainable recovery.

Insolvencies On The Slide

The number of companies entering administration has fallen to the lowest level since the first quatre of 2005, government statistics show.

According to the latest figures from the Insolvency Service, fewer companies entered into administrations, company voluntary arrangements and receivership in the second quarter of 2014 than over the same period the previous year.

Inheritance Tax Still Takes A Big Bite

Families were charged £3.4bn in death duties last year, an increase from £3.1bn in the previous 12 months, the Office for National Statistics said. The total was only slightly below the £3.5bn anticipated by the Office for Budget Responsibility, the government's financial forecaster.

New Rules For Non Doms Living In The UK

Non-doms living in the UK are only taxed on their non-UK income to the extent that they bring it into the UK. The proposed change relates to a situation where a non-dom takes out a loan - in the UK or elsewhere - which they use in the UK, for example to buy a property. If that loan were repaid using foreign income or gains the law has always recognised that repayment as an indirect remittance & taxed it accordingly.

Less clear perhaps is a situation where the offshore income or gains are used as collateral for the loan. In most situations the collateral is just a safety net and the loan will be fully repaid using other means. HMRC previously took a view that this should be treated as a remittance only in obvious avoidance cases. The withdrawal of this treatment could mean that there is a remittance, even if the arrangement was always that the loan would be repaid using monies already in the UK.

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

STAMP DUTY WIPES VALUE OFF HOMES

Stamp Duty has apparently been responsible for reducing house prices since 2012 by over £250 million.

Stamp Duty rises from 1% to 3% at £250,000.  People with houses worth just over that figure are on average reducing prices by £7,000 to bring them back into the 1% bracket.  If this affects some 40,000 homes as the figures suggest then the Government is losing approximately £200,000 in Stamp Duty but the housing market is still generally in a very slow recovery. ( The Times & The Daily Mail )

HMRC TARGETS LANDLORDS

HMRC are now warning Landlords of let property to take the opportunity of disclosure under the LET PROPERTY CAMPAIGN any rental profits not previously disclosed. They estimate that 1million such landlords are currently not disclosing either rentals or disposals for CGT. The loss is estimated at £550million per annum. It is thought that as most buy to lets have loans against them people believe that all repayments are allowable against income and that profits if any are small. We remind people that only interest on loans is allowable and that undisclosed profits discovered after the disclosure scheme ends will result in penalties of up to 100% of the tax found to be due.

UK TECH FIRMS SLOW ON PATENT UPTAKE

The number of patents being filed by UK technology companies is falling compared to overseas competitors according to a report by PwC.  It seems that overseas technology companies are far more astute yet aggressive with regard to the way in which patents both protect the technology and provide income streams in the future. There is little doubt that UK companies need to understand how best to account for patents in the first instance and then how to quickly develop the income flows from having the protection in place and stopping competitors.

HMRC NETS £110m FROM CGT UNDERPAYMENTS

HMRC collected £110m from investigations into underpayments of CGT in 2012/13.  The amount raised is a third higher than in the previous tax year.  HMRC’s clampdown targeted buy-to-let landlords and owners of multiple homes.  Claims for exemption on the sale of a property under principal private residence relief are under particular scrutiny.  Total receipts from CGT were £3.9bn in 2012/13

FCA URGES SMEs TO SIGN UP FOR SWAP SCHEME

The FCA has urged 1,900 small businesses to join its £3.75bn interest rate swaps compensation scheme before it closes this year. The regulator said that by the end of February banks had paid £482m - approximately 13% - of the compensation they have been told to hand over by the end of July. The average payout under the FCA scheme so far was £140,000 at the end of February and 3,430 companies have received compensation.

MIGRANT ENTREPRENEURS DRIVING UK JOB CREATION

A report from the Centre for Entrepreneurs has found that nearly half a million people from 155 countries have settled in the UK and launched businesses. In total there are 456,073 migrant entrepreneurs in the UK running active companies, with some running more than one venture. The majority of migrant entrepreneurs hail from Ireland, with 48,854 founders currently running businesses in the UK. In second place is India, with 32,593, and third is Germany, with 30,755.

  

BUSINESS OWNERS HAPPY TO REMAIN IN CHARGE

Aviva’s 2014 SME Pulse report has found that only 4% of small business owners would return to the workforce as an employee, compared to 25% in 2012. Two fifths of owners (41%) say they have a good work-life balance and just one in ten says running a small business has had a negative impact on family and friends. The report also found that over 60% of entrepreneurs turn to family and friends if they have a problem. After family and friends, SME owners look towards to the internet and other business owners.

LENDING TO SMEs FALLS

Figures from the BoE’s Funding for  Lending scheme have revealed that 34 banks and building societies using the credit facility withdrew £1.32bn of lending from SMEs between April and December 2013. The largest withdrawals were from RBS, which withdrew £2.2bn of credit, and Nationwide, which cut lending by £1.14bn. An RBS spokeswoman said its reduction in net lending to SMEs was due to its restructuring strategy as it runs down legacy assets. Meanwhile, the FLS data suggested that small challenger banks are beginning to fill the void. Aldermore lent £345m to small business, Shawbrook Bank £136m, OneSavings Bank £66m, and Yorkshire Building Society £45m. The largest single lender was Lloyds Banking Group, which extended £1.12bn to the sector, followed by Santander, which lent £447m.    

NEWSLETTER 77

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

EMPLOYMENT ALLOWANCE

The Government has announced further details of the Employment Allowance which is available from 6 April 2014 - See more at: http://www.walkerthompson.co.uk/newsletters/Newsletter-77#Employment

INCREASES TO NMW PENALTIES AND LATEST TARGETS

The Government has announced that rogue employers who do not pay their workers the National Minimum Wage (NMW) will face an increased penalty of up to £20,000 as part of a Government crackdown. - See more at: http://www.walkerthompson.co.uk/newsletters/Newsletter-77#Increases

HELP FOR THOSE AFFECTED BY FLOODS

The Prime Minister has announced a package of measures to help flood affected businesses get back on their feet - See more at: http://www.walkerthompson.co.uk/newsletters/Newsletter-77#Help

NO PENALTIES FOR SOME LATE SELF ASSESSMENT RETURNS

HMRC have announced that more than 10 million tax returns were filed on time meeting the 31 January deadline. - See more at: http://www.walkerthompson.co.uk/newsletters/Newsletter-77#Penalties

HMRC WARNING ABOUT PHISHING SCAMS

HMRC are warning taxpayers to be wary of the latest in a long line of email phishing scams that claim to offer tax rebates in return for bank account details. - See more at: http://www.walkerthompson.co.uk/newsletters/Newsletter-77#HMRC

PAYE END OF YEAR APPROACHING

HMRC are reminding employers that with the end of the 2013/14 tax year approaching they will soon need to make their final 2013/14 PAYE (RTI) submission. - See more at: http://www.walkerthompson.co.uk/newsletters/Newsletter-77#PAYE

ELECTRONIC MESSAGES TO EMPLOYERS

HMRC have issued an electronic warning message to employers who have not submitted their Full Payment Submission (FPS) return(s) during the January tax month - See more at: http://www.walkerthompson.co.uk/newsletters/Newsletter-77#Electronic

EMPLOYEE TRAVEL DISRUPTION

From time to time and particularly with the current weather conditions, travel disruption can affect an employee’s ability to get to work on time, or in some cases at all. - See more at: http://www.walkerthompson.co.uk/newsletters/Newsletter-77#Employee

NEW TIMETABLE FOR RTI PENALTIES

From a press release dated 12 February 2014 HMRC unveils new timetable for RTI penalties

There will be a staggered start to the introduction of Real Time Information (RTI) penalties, HM Revenue and Customs (HMRC) announced today.

The new automatic in-year PAYE penalties for late filing and late payment and in-year interest (charged on tax and National Insurance Contributions (NICs) that are paid late during the year), were due to start from 6 April 2014.

RTI is a big change and HMRC and some employers are continuing to learn. Having listened to customer feedback, HMRC has decided to stagger the start of the new in-year late filing and payment penalties to give employers more time to adapt to reporting in real time. The new timetable will be:

·  April 2014 - in-year interest on any in-year payments not made by
   the due date
·  October 2014 - automatic in-year late filing penalties
·  April 2015 - automatic in-year late payment penalties

At the same time, HMRC is continuing to improve its systems and guidance.

HMRC has worked closely with the Department for Work and Pensions to ensure that RTI will support the operation of Universal Credit, which brings together means-tested in and out-of-work benefits.

HMRC’s Director General for Personal Tax, Ruth Owen, said:
“The introduction of RTI is going extremely well for the majority of employers but there are still some who need a bit of time to adapt fully to the changes. This additional time will give us the opportunity to ensure that improvements to our internal systems are working, to learn from them and to provide better customer support to employers who need more time to adapt.”

CHECK YOUR TAX CODE

There has been a noticeable increase with errors in the latest round of coding notices issued by HMRC in preparation for 2014/15.

For employees it is essential that the composition of codes is correct so that the monthly tax deductions from salary are correct.

Most noticeable is that where an assumption is made that income will exceed £100,000 and that no personal allowance is due.

If it is not corrected then tax of £2,000 (20%) or £4,000 (40%) will be over-deducted during the year.

If there is any doubt then contact HMRC for an explanation.

PAYE & RTI

PAYE and Real Time Information is now just around the corner for smaller employers.  From 6 April 2014 ALL employers with more than 9 staff will be obliged to report under RTI as well as ALL new payroll schemes irrespective of size.  Very small employers with 1-9 employees will currently still have until April 2016 to adapt but with the scheme now well embedded there would seem to be little point in deferring the inevitable.  HMRC are likely to impose their penalty scheme for late filing of RTI Returns this coming April which can range from £100 for very small employers to £400 for the largest.  HMRC say that they will allow a small degree of tolerance, up to £100 variance between the due amount and the actual amount paid but this is likely to be from small errors only in processing.  Just to add here that the rate of successful appeals against penalties imposed thus far is negligible because they must be deemed "reasonable" which is clearly a concept which HMRC interpret quite narrowly.

WALKER THOMPSON HIT TARGET AGAIN

Well, the January 31 Self Assessment deadline swept past and we managed to once again ensure that 100% of our clients tax returns were submitted on time.  Whilst there was a definite late surge of delayed information coming in throughout the month, the team here worked hard to deliver to target yet again.

NEWSLETTER 76

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

HMRC WINS THE MILEAGE ARGUMENT AT TRIBUNAL 

Many trades & professionals will have been awaiting the outcome of a tax case relating to the main place of a business and what mileage or other travel costs is thereby determined as private or business or indeed mixed purposes. - See more at: http://www.walkerthompson.co.uk/newsletters/Newsetter-76#HMRC

RTI AND MICRO EMPLOYERS

HMRC have announced that, although the vast majority of employers are finding PAYE reporting in real time straightforward, a small proportion of micro employers and their agents still need more time to adapt - See more at: http://www.walkerthompson.co.uk/newsletters/Newsetter-76#RTI

DWP ISSUE GUIDANCE ON NEW CLASS 3A NIC

The Government wants to offer help to existing pensioners and people who reach State Pension age before 6 April 2016 - See more at: http://www.walkerthompson.co.uk/newsletters/Newsetter-76#DWP

PERSONAL DEVICE AT WORK POLICY

The Information Commissioner’s Office (ICO) is advising that organisations should have a clear personal device at work policy - See more at: http://www.walkerthompson.co.uk/newsletters/Newsetter-76#Personal

PAYE CODING NOTICES 

Over the next few months HMRC will be sending out new PAYE tax codes for the 2014/15 tax year - See more at: http://www.walkerthompson.co.uk/newsletters/Newsetter-76#PAYE

HELP TO BUY MORTGAGE GUARANTEE COMPLETIONS

The Government has announced that ‘nearly 750’ homes have been bought and 6,000 offers made since the mortgage guarantee scheme started - See more at: http://www.walkerthompson.co.uk/newsletters/Newsetter-76#Help

ZERO HOURS CONTRACTS

Business Secretary Vince Cable has announced that, under new proposals, employers could be banned from imposing ‘exclusivity’ on zero hours contracts which offer no guarantee of work and stop employees from working for another employer - See more at: http://www.walkerthompson.co.uk/newsletters/Newsetter-76#Zero

EXCUSES EXCUSES

HMRC have released the ‘Top 10 oddest excuses’ for sending in a late self assessment return - See more at: http://www.walkerthompson.co.uk/newsletters/Newsetter-76#Excuses