NEWSLETTER 66

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

PERSONAL ALLOWANCE UP TO £10,000 FROM 2014/15

It has been confirmed in the Budget that the basic personal allowance will be increased from the current £8,105 to £9,440 for 2013/14

NATIONAL INSURANCE - £2,000 EMPLOYMENT ALLOWANCE

The Government will introduce an allowance of £2,000 per year for all businesses and charities to be offset against their employer Class 1 NIC liability from April 2014

NEW SCHEME FOR TAX FREE CHILDCARE

New tax incentives for childcare have been announced.   To be eligible, families will have to have all parents in work, with each earning less than £150,000 a year and not already receiving support through Tax Credits or Universal Credit

SUPPORT FOR THE HOUSING MARKET

Major reforms have been announced in Budget 2013, including over £5.4 billion of financial help

RTI ‘RELAXATION’ FOR SMALL EMPLOYERS

HMRC have announced that, for some smaller employers, they will relax the reporting requirement for RTI that payments to employees should be reported on or before the amount is paid to the employee

ADVISORY FUEL RATES FOR COMPANY CARS

Updated company car advisory fuel rates have been published which took effect from 1 March 2013

EMPLOYER END OF YEAR FORMS

HMRC are reminding employers that in order to avoid penalties they must file the Employer Annual Return (P35 and P14s) online and on time

REMINDER TO THOSE WITH CHILD BENEFIT AND HIGHER INCOMES

HMRC are reminding people with income over £60,000 whose family is still receiving Child Benefit to consider ‘opting out’ before 28 March if they wish to avoid filling in a tax return and repaying the benefit for the 2013/14 tax year

HMRC PUBLISH NAMES OF DELIBERATE DEFAULTERS

For the first time, HMRC have published a list of ‘deliberate tax defaulters’

ANOTHER HMRC DISCLOSURE FACILITY

HMRC have launched the Property Sales campaign, which is the latest in a long line of disclosure facilities

NEWSLETTER 65

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

AUTO ENROLMENT TOOL

Under Pensions Auto Enrolment employers must:

• ‘auto enrol’ eligible employees into a pension scheme

• make employer pension contributions for them, and

• make deductions of employee pension contributions from the employees pay.  

REAL TIME INFORMATION

HMRC are issuing final reminders to employers to ‘act now’ in order to be ready to report PAYE under Real time Information (RTI).  

PAYING HMRC BY BILL PAY

The ICAEW has reported that HMRC are aware that there are problems with the Bank of Santander’s Bill Pay service which is used by many individuals to pay their self assessment tax liabilities by credit or debit card.

TAX REBATE PHISHING SCAM

HMRC are warning taxpayers not to fall victim of scam emails sent by fraudsters. In 2012 taxpayers reported almost 80,000 tax rebate phishing emails and HMRC took action to close down 522 illegal sites.  
HMRC REPORT SELF ASSESSMENT STATISTICS

HMRC have reported that a record 9.61 million people submitted their self assessment tax return on time this year.  

HMRC WIN FURNISHED HOLIDAY LETTINGS TEST CASE

HMRC have been successful in a test case which considered the tax reliefs available for Furnished Holiday Lettings (FHL).  

SHARED PARENTAL LEAVE

Proposals to change the way parents can share maternity leave have been outlined as part of the Children and Families Bill.

TACKLING LONG TERM SICKNESS ABSENCE

The government has announced proposals to introduce a new independent assessment and advisory service aimed at getting people back to work.

HEALTH AND SAFETY REFORMS

The government has announced that they have made significant progress in reforming Health and Safety requirements. The government has been working towards implementing some of the recommendations made in the Löfstedt Report in 2011 and the Young Report in 2010.

CHARITIES ONLINE GIFT AID SERVICE

HMRC have announced that claiming gift aid repayments will be quicker and easier for charities and sports clubs from April 2013.

NEWSLETTER 64

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

EMPLOYMENT RIGHTS - STATUTORY LIMITS

The limit on the amount of the compensatory award for unfair dismissal is set to increase from 1 February 2013.

HMRC TARGET THOSE WITH OUTSTANDING VAT RETURNS

HMRC have introduced the VAT Outstanding Returns Campaign, which is an opportunity for taxpayers to bring their VAT returns and payments up to date.

‘TAX CHEATS’ SENTENCED TO OVER 150 YEARS BEHIND BARS

HMRC have announced that the top ‘tax criminals’ of 2012 have been sentenced to a combined total of 155 years and 10 months behind bars.

PAYE CODING NOTICES

HMRC are issuing PAYE tax codes for 2013/14.

RTI IS COMING

HMRC are urging employers to get ready for major PAYE changes that come into effect from April 2013.

START UP LOAN SCHEME FOR YOUNG ENTREPRENEURS EXTENDED

David Cameron has announced a boost to the government’s Start-Up Loans Scheme, with funding being increased by £30 million to £110 million over three years.

STATE PENSION REFORM

The government have announced proposals for a new single tier pension.

CHILD BENEFIT OPT OUT

The High Income Child Benefit Charge (HICBC) was introduced from 7 January 2013. It mainly applies to a taxpayer who has ‘adjusted net income’ in excess of £50,000, where either they or their partner is in receipt of Child Benefit.

DEADLINE LOOMING FOR SELF ASSESSMENT RETURNS

HMRC are reminding taxpayers that the countdown has begun to the 31 January 2013 self assessment deadline, with just days left for anyone with an outstanding 2011/12 tax return to send it online.

HMRC BANK ACCOUNT DETAILS FOR EMPLOYERS

HMRC have updated their guidance to employers on paying PAYE liabilities.

Pensions - Advice for Employees

The Government has just taken out advertising with Independent Television channels to promote the soon to be launched Pension Schemes where employees have an auto enrolment or an opt out.

The adverts are causing many employees to bombard their employers with questions.

Walker Thompson in collaboration with a leading firm of financial advisors have produced a simple guide for employees which can be found here

Companies House launches mobile app

Companies House has recently launched a free mobile phone app which enables users to view thousands of basic UK company details. The app is currently available as an Apple download but an android version is due to be launched shortly.

Further information can be found by clicking here

French to tax foreign second-home owners

UK citizens who own homes in France may have to pay substantially more in tax in that country, under proposals announced last week.

Capital gains tax, and income tax on rental income, will rise substantially for foreigners, to levels paid by French citizens.

Several hundred thousand UK citizens own, and let, homes in France.

At the moment, French capital gains tax is levied on the sale of a home at 19%, plus 15.5% as a "social charge" to pay for state benefits.

Likewise, tax on rental income is levied at 20% plus 15.5% social charge.

The social charges are not currently paid by foreigners who own homes in France, but under latest plans, they will be.

The extra taxes have been outlined in a supplementary budget which should become law by the end of July, and which will apply immediately.

It is possible the extra taxes to be paid by foreigners may be challenged legally.

Nevertheless, it is thought that the moves will inevitably make second homes and rental properties in France far less attractive to UK residents.

2012 Budget - The Aftermath

The facts below are extracts taken from a wide variety of professional & trade press articles following the Budget of Chancellor George Osborne. The proposals set out within the Budget speech will be ratified in due course through The Finance Act 2012 although some measures were introduced as part of the previous announcements.

In most peoples opinions it is probably fair to say that when the cosmetic appearance was stripped away, the 2012 Budget was somewhat neutral overall. There are certain areas which have caused controversy and others which have caused comedy. 2012 will in our view always be remembered as the Pasty, Pie & Pensioners Budget.

When the country is looking to emerge from an economic recession, are we really employing civil servants with the sole aim of further complicating already complex VAT legislation against a background of a Parliament keen to reduce red tape & encourage business entrepreneurship? Moreover are we concerned whether Mr Osborne has ever eaten a sausage roll from Greggs?
Income Tax rates were almost a non event as they were announced in 2011. A 5% drop in the higher 50% rate was announced but only effective from April 2013.

For Inheritance Tax purposes there was no change in limits but a 4% tax discount will be applied if the estate is over £325,000 & over 10% is left to a registered charity. A nice idea given that charitable donations have been hit by the recession but for higher rate tax payers who are minded to give to charity anyway, a lifetime donation would seem to have more benefit.

Various Benefits including State Pension & Jobseekers Allowance are increased in line with the Consumer Price Index set in September 2011 at 5.2%. Pensioners however are still mainly affected by the low rates of investment returns which affect their day to day lives and were planned to top up pensions through retirement.

The most controversial change in this area was in respect of Working Tax Credit where couples with children must work 24 hours per week instead of 16 hours and that one person must work at least 16 hours. We believe that this will have a short term impact upon businesses who have arranged part time staffing around the original rules and may now face employee requests to change their hours. Failure of an SME employer to be able to respond could see increasing movement of employees with the consequent associated costs.

On the periphery of the Budget, businesses are still struggling to obtain finance from a banking system which claims to be releasing credit in line with expectations. Whose expectations these are we cannot say as in the SME sector it is fairly clear that banks are only lending where the level of security available not only from the business but from owners personal guarantees is up to 4x the amount of borrowings. Suffice to say that Government statistics announced on 11 April showed that British firms were not investing in capital which would enable them to pull clear of recession & that they might struggle to do so. – If they cannot borrow to invest then perhaps the idea of a nationally owned business bank is the way forward? We still see banks visiting businesses, not to lend money but to sell Life Assurance & Pensions.

Finally it is worth commending our Chancellor on his astute awareness of the tax system over which he has stewardship. As recorded in an interview with the Daily Telegraph:

“Chancellor George Osborne has expressed shock after looking at 20 anonymised tax returns of multi-millionaires which demonstrated they have exploited tax loopholes to legally reduce their tax bills.”