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June 2009 Newsletter

 

Advisory fuel rates

To reflect the changes in fuel prices, HMRC have issued new advisory fuel rates for employees driving employer provided cars. These take effect for all journeys undertaken from 1 July 2009 so employers wishing to use the new rates should advise affected employees and update any expense forms as soon as possible.

Engine size

Petrol

Diesel

LPG

1400cc or less

10p (10p)

10p (11p)

7p (7p)

1401cc to 2000cc

12p (12p)

10p (11p)

8p (9p)

Over 2000cc

18p (17p)

13p (14p)

12p (12p)

Employers may use the new rates prior to 1 July if their systems allow. The rates in brackets are those previously applicable.

Other points to be aware of about the advisory fuel rates:

  • employers do not need a dispensation to use these rates.
  • employees driving employer provided cars are not entitled to use them to claim a deduction if employers reimburse them at lower rates. Such claims should be based on actual costs incurred.
  • the advisory rates are not binding where an employer can demonstrate that the cost of business travel in employer provided cars is higher than the guideline mileage rates. The higher cost would need to be agreed with HMRC under a dispensation.

If you would like to discuss your car policy, please contact us.

Internet link: HMRC advisory fuel rates 

 

HMRC new disclosure opportunity

HMRC have announced some details of the New Disclosure Opportunity (NDO) which is due to take place this autumn. In order to encourage taxpayers to disclose an undeclared offshore account the penalty level has been set at 10%. HMRC hope that the low penalty will encourage taxpayers to come forward. HMRC are currently liaising with various banks to obtain details for offshore account holders.

The key points of the NDO, as set out on the Chartered Institute of Taxation website, are as follows:

“The key messages provided by HMRC are as follows:

  • The New Disclosure Opportunity (NDO) is for people with unpaid tax connected to an offshore account and will run from the autumn 2009 until March 2010. It will give the offshore account holders one final opportunity to disclose, and put their affairs in order.
  • Penalty of 10% for full disclosure if no previous opportunity. Higher for full disclosure if you had the chance under previous opportunity.
  • HMRC is seeking to obtain details of offshore accounts and assets from hundreds of financial institutions. This ensures HMRC will be able to pursue those who choose not to disclose tax owed as quickly as possible.
  • During the disclosure period, all account holders will know that HMRC has, or will soon have, their details. We have already successfully applied to get details from a number of banks.”

We will keep you informed of developments in this area, meanwhile if you have any concerns please do get in touch.

Internet link: CIOT article 

 

HMRC PAYE services interruption

HMRC are advising taxpayers and employers that, as part of its ongoing plans “to improve customer service and efficiency”, they are in the process of changing the way they process PAYE records. In order to make all PAYE records available on one computer system they are undertaking a major IT upgrade.

They are advising that there will be temporary service interruptions from 12 June 2009 and that this may take some time as it will continue until “the new service is available to all trained staff and while we bring outstanding records up to date”. Apparently some parts of the PAYE service will be temporarily unavailable, as will the National Insurance Computer System.

HMRC have advised that although they will be able to provide general advice during this time they will not be able to answer specific queries relating to individual National Insurance records or recent PAYE changes. This may result in delays issuing refunds or new PAYE coding notices to individuals.

HMRC have advised that the Department for Work and Pensions will be similarly disrupted which may affect benefit claimants.

Internet link: HMRC computer upgrade 

 

Tax credits renewal deadline

Tax credits are state benefits which are generally available to lower income families. However, entitlement to the credits is significantly increased where individuals pay for childcare or suffer a drop in normal levels of income perhaps due to incurring trading losses or redundancy.

Individuals who have already claimed tax credits for 2008/09 have to finalise their provisional award, which would have originally been based on their 2007/08 income, and advise HMRC of any changes in their circumstances for 2008/09. This procedure is known as the renewals process. The deadline for the submission of tax credit renewals is 31 July 2009.

HMRC have been busily advertising the renewals process in the national press and on their website. Claimants need to be aware that the payment of tax credits will stop at the end of July if they have not renewed their applications by that date.

If you need any help with the completion of your form or any advice on tax credits generally please do get in touch.

Internet link: HMRC tax credit renewals 

 

Employees accrue holiday pay while on sick leave

The House of Lords has ruled in the case of Stringer v HMRC that workers who are refused holiday pay while on sick leave can make a claim to an employment tribunal for an unauthorised deduction from wages (under the Employment Rights Act 1996).

This decision follows the ruling in January, by the European Court of Justice (ECJ), that employees do accrue paid holiday for their entire sick leave, and must be allowed to take it on their return to work or be paid in lieu of their entitlement if their employment ends. The ECJ ruling did not comply with the UK’s existing Working Time Regulations, which require employees to use their four weeks statutory leave in the holiday year or lose it. The House of Lords has now ruled that the ECJ decision does indeed apply in the UK.

This is a complex area so please do get in touch if you need any clarification.

Internet links: BERR guidance and Personnel Today article 

 

Extra paternity leave put on hold

Proposals to introduce six months’ paid paternity leave for new fathers have been put on hold by the government in the light of the current economic climate.

The plans would have seen parents being able to share the 12 months maternity leave between them. Plans to extend the current statutory paid maternity pay from nine months to 12 have also been put on hold.

A spokesperson for the Department for Business, Enterprise and Regulatory Reform issued the following statement:

“We have not yet announced a date for extending maternity and paternity rights. We are continuing to review the appropriateness of all new regulations due to come into force in the current economic climate. It is only right that in tough economic times we look afresh at the costs and benefits of new regulations.”

This announcement means that new father’s will not be able to take six months’ paid leave to look after their baby, allowing the mother to return to work early. Many businesses will be relieved that this change is not being introduced in the current economic climate.

Internet link: Telegraph article 

 

HMRC warn of fraudulent email

HMRC are warning that an email is currently being sent to some taxpayers advising them that HMRC have “approved them to receive monies”. Apparently the email states that this is as a result of an HMRC program on 15 June 2009.

HMRC are advising that this is not a genuine email and taxpayers should not act on it.

Internet link: HMRC security fraud attempts 

 

Digital Britain

The government has published its report Digital Britain which sets out the government’s plans for the UK to be at the forefront of the global digital economy.

The core details, as taken from the press release, are as follows:

  • Universal access to today’s broadband services by 2012
  • Next Generation fund for investment in tomorrow’s broadband services
  • Upgraded mobile networks
  • National Plan to improve Digital Participation
  • Robust legal and regulatory framework to combat Digital Piracy
  • Support for public service content partnerships and revised digital remit for Channel 4
  • Funding options for national, regional and local news
  • Programme of Digital Switchover in Public Services

To read details of the report use the link below.

Internet links: Digital Britain report and Press release 

 

Corporation tax return guide

HMRC have published revised guidance on the completion of the corporation tax return form CT600.

Please do get in touch if you would like any help in this area.

Internet link: CT600 guide 

Company Information Walker Thompson is a trading name of Walker Thompson Ltd registered in England and Wales. Company registration number 06574838

Registered Office Empress House :: 43a Binley Road :: Coventry CV3 1HU :: T 024 7663 5522 :: F 024 7663 5518 :: E clientcare@walkerthompson.co.uk