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.