Pensions changes

Financial Secretary to the Treasury, Mark Hoban MP has announced a series of changes to the pension rules. The main changes include:

for 2011/12 the amount of the annual allowance will be reduced to £50,000 (from the current £255,000)
the method of calculating the amount of pension input amounts will be changed
there will be rule that allows carry forward of unused annual allowance from the last three tax years, and
from April 2012 the lifetime limit will be reduced to £1.5m.

Please do get in touch if you would like further information on how these changes will affect you.

Internet links: Press release HMRC Pensions rules

31 October self assessment deadline

HMRC are warning taxpayers who wish to file a paper (non electronic) tax return for the 2009/10 tax year, that the return should generally reach them by midnight on Sunday 31 October 2010.

However the guidance on the HMRC website states

“You may have to pay a late filing penalty if you deliver your tax return late.

You won’t have to pay a late filing penalty if:

Your tax return is in the HMRC office letter box when it is first opened on Monday 1 November 2010.
Your tax return is received in the post on Monday 1 November 2010 or handed in during office hours on that day. In this case, HMRC will however have longer to start a check into your tax return – until 31 January 2012 rather than 31 October 2011. The same applies to tax returns that are found in HMRC office post boxes first thing on Tuesday 2 November 2010.

There will be a late filing penalty if your tax return is delivered by post or by hand after the above dates.”

The deadline for filing returns may be later in some circumstances for example:

you received your tax return or a letter (called a ‘Notice to File’) telling you to file online after 31 July
there is no software available to file your tax return online.

If you fail to make the paper filing deadline, please do get in touch if you would like us to help you file your return online. Taxpayers generally have until 31 January 2011 to submit their self assessment return online.

Internet link: HMRC news

European case may boost paternity rights

The European Court of Justice (ECJ) ruling may impact on UK additional paternity leave rules which come into force for babies due from 3 April 2011 onwards.

The ECJ has issued a ruling in the case of Roca Alvarez v Sesa Start Espana ETT SA concerned a Spanish scheme which allowed parents to take time off work to look after a child but which was applied differently to women and men. A woman who was employed qualified for the time off, but employed fathers were only entitled to the leave if the mother of the child was also an employee. The ECJ ruling found that this resulted in sex discrimination.

How may this affect us in the UK? Well, the Additional Paternity Leave Regulations 2010 come into force for babies due on or after 3 April 2011. These regulations allow fathers to take up to six months additional paternity leave (APL), where the mother of the child is returning to work and not taking the last six months of her maternity leave entitlement. This ruling from the ECJ suggests that fathers taking the APL should be entitled to the same rights as women taking leave. This may affect employers who offer extra benefits to women on maternity leave, in excess of their statutory maternity pay entitlement, as fathers on APL should also be offered these additional benefits to avoid any possibility of sex discrimination.

The Additional Paternity Leave Regulations were introduced by the previous Labour government. The Coalition government has advised that they will remain in force as an interim measure, whilst they consult on a new system of parental leave.

Internet link: Roca Alvarez Case

The Equality Act 2010

From 1 October 2010 a new wide ranging piece of employment law legislation came into force. The Equality Act 2010 replaces all previous equality legislation, including the Employment Equality (Age) Regulations 2006. The Equality Act 2010 covers age, disability, gender reassignment, race, religion or belief, sex, sexual orientation, marriage and civil partnership and pregnancy and maternity. These are now called ‘protected characteristics’.

The Equality Act 2010 combines all the important anti-discrimination laws which have been introduced piecemeal over the last 40 years.

For a summary of the changes please visit the link below.

Internet link: Equality Act 2010 summary

Enhanced capital allowances changes

Enhanced Capital Allowances (ECAs) of 100% are available to any size of business which buys brand new energy saving plant and machinery, including water saving plant. The ECA allows a full write off for tax purposes of the cost of qualifying plant and machinery. From time to time the qualifying criteria and items are amended and the 2010 amendments are set out on the website detailed below.

Please contact us if you would like advice on capital allowances.

Internet links: ECA website ECA recent changes

Changes to NIC cards

HMRC advise individuals of their National Insurance number for the first time by sending out a plastic card. Following a suggestion made through the Spending Challenge website HMRC will in future, cutting their costs by an expected £1 million per annum, send out a letter instead of the plastic card. This change in procedure will initially apply where a replacement card is requested. New applications and those approaching age 16, get a card sent automatically, and will continue to receive a plastic card for some time yet.

Employers who ask to see employees’ NI cards to confirm that they have provided the correct NI number should be prepared to start seeing some of these paper confirmations in the future.

Internet link: HMRC NIC cards

E101 changes

From 11 November 2010 HMRC will change the way that individuals apply of an E101 certificate. This certificate is used by employees seconded to other EU countries and confirms that they remain within the UK NIC system. The ‘Do it online service’ will be withdrawn and will be replaced by a secure form.

You can also still apply on paper using forms CA3821 and CA3822.

Internet link: HMRC news

Increase in the standard rate of VAT

The standard rate of VAT will increase from 17.5% to 20% with effect for any supply made on or after 4 January 2011. The rate change does not affect either zero-rated supplies nor those supplies subject to VAT at the 5% reduced rate.

Detailed guidance has been issued by HMRC for businesses on implementing the change. If you would like advice on how to implement the change for your business please do get in touch.

Internet link: HMRC guidance