- LATEST GUIDANCE FOR EMPLOYERS
- VAT FUEL SCALE CHARGES
- GOVERNMENT CONFIRMS IMPLEMENTATION OF PENSIONS DASHBOARDS
- ‘SPRINGTIME’ TAX SCAMS TARGET YOUNG PEOPLE
- MONEY LAUNDERING
- ‘FLEXIBLE EXTENSION’ TO ARTICLE 50
- SCOTTISH AIR DEPARTURE TAX PLANS FURTHER DELAYED
- OTS CALLS FOR SIMPLIFYING EVERYDAY TAX FOR SMALLER BUSINESSES
- HMRC TASKFORCE TACKLES DISHONEST DOG BREEDERS
- FORMS P11D – REPORTING EMPLOYEE BENEFITS
- WELSH TAXPAYERS INCOME TAX CODE MIX-UP
- CONSULTATION ON COMPANIES HOUSE REFORMS
- CONSULTATION ON ANCILLARY CAPITAL GAINS RELIEFS
- ADVISORY FUEL RATES FOR COMPANY CARS
- NON-COMPLIANCE WITH MINIMUM WAGE REGULATIONS
HMRC has issued the latest version of the Employer Bulletin. This April edition has articles on a number of issues including:
- Cash Allowances, Flexible Benefits Packages and Salary Sacrifice
- Unpaid work trials and the National Minimum Wage
- Diesel Supplement Company Car Tax Changes to meet Euro standard 6d
- Student Loans
- Construction Industry Scheme – helpful reminders for contractors and subcontractors
- Welsh rate of income tax and Scottish Income Tax.
If you have any queries on payroll matters please contact us.
Internet link: Employer Bulletin April 2019
HMRC has issued details 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 2019.
VAT registered businesses use the fuel scale charges to account for VAT on private use of road fuel purchased by the business.
Please do get in touch for further advice on this or other VAT matters.
Internet link: GOV.UK fuel scale charges
The government has confirmed that the initiative to introduce a pensions dashboard will go ahead.
Pensions dashboards will allow those saving for retirement to view information from multiple pensions in one place stating that the dashboard will ‘open up pensions to millions’, and ‘provide an easy-to-access online view of a saver’s pensions’.
The Department for Work and Pensions (DWP) will bring forward legislation that will require pension scheme providers to make consumers’ data available to them through their chosen dashboard. The plan is to include State pension information as well.
Mike Cherry, National Chairman of the Federation of Small Businesses (FSB), said:
‘The government’s commitment to compel pension schemes to share data with platforms through primary legislation is particularly welcome. Some urgency is now required, and we question the three to four-year timeframe for schemes to prepare data for dashboards.’
HMRC has warned young people in the UK to ‘stay vigilant’ in order to avoid falling victim to ‘Springtime’ tax refund scams.
Criminals often target young individuals or the elderly as these groups of people are likely to be less familiar with the UK tax system. During the months of April and May, criminals often bombard taxpayers with tax refund scams at the same time as genuine rebates are processed by HMRC.
In the Spring of 2018, approximately 250,000 reports of tax scams were received by HMRC.
Individuals have been warned to be wary of text messages, calls and voicemails purporting to be from HMRC. These are often designed to extract personal or financial information from the taxpayer.
Angela MacDonald, Head of Customer Services at HMRC, said:
‘We are determined to protect honest people from these fraudsters who will stop at nothing to make their phishing scams appear legitimate.
‘HMRC is currently shutting down hundreds of phishing sites a month. If you receive one of these emails or texts, don’t respond and report it to HMRC so that more online criminals are stopped in their tracks.‘
Internet links: Action Fraud
HMRC has published a list of businesses that have not met their obligations under the Money Laundering Regulations.
As a supervisor of the Money Laundering Regulations HMRC has a duty to publish details of businesses that have been penalised for not complying with the regulations.
HMRC advises that it considers cases individually to decide whether to publish details in full, anonymously, or not at all. Where a decision is made to publish in full, the following information may be published:
- the name and address of the business owner or business
- the nature of the breach or breaches
- the penalty issued by HMRC
- the status of any appeal against the penalty
HMRC publishes anonymously if it considers that the effect of publishing details about an individual or business would be disproportionate.
Internet link: GOV.UK money laundering
Business groups, including the British Chambers of Commerce (BCC) and the Confederation of British Industry (CBI), have commented on the six-month ‘flexible’ extension of Article 50, granted to the UK by EU leaders.
The extension potentially pushes ‘Brexit Day’, the day when the UK officially leaves the EU, to 31 October 2019.
Reacting to the news, the BCC stated that the flexible extension is ‘preferable’ for most businesses. It said:
‘Politicians must urgently agree on a way forward. It would be a disaster for business confidence and investment if a similar late-night drama is played out yet again in October.’
The CBI said that UK businesses will now ‘adjust their no-deal plans’ instead of cancelling them. Carolyn Fairbairn, Director General of the CBI, said:
‘For the good of jobs and communities across the country, all political leaders must use the time well. Sincere cross-party collaboration must happen now to end this crisis.’
The Scottish government has further delayed its plans to replace Air Passenger Duty (APD) with Air Departure Tax (ADT). The plans to introduce ADT have been delayed beyond 2020.
In 2016, as part of the Scotland Act, the Scottish Parliament was given devolved powers to charge tax on travellers leaving Scottish airports. Proposals were put forward to replace the UK-wide APD with an ADT.
The ADT was set to take effect in April 2018, but was delayed due to issues surrounding the current exemption which applies to airports in the Highlands and Islands.
Commenting on the delay, Kate Forbes MSP, Minister for Public Finance and Digital Economy, stated:
‘The Scottish government has been clear that it cannot take on ADT until a solution to these issues has been found, because to do so would compromise the devolved powers and risk damage to the Highlands and Islands economy.
‘While we work towards a resolution to the Highlands and Islands exemption, we continue to call on the UK government to reduce APD rates to support connectivity and economic growth in Scotland and across the UK.’
A report by the Office of Tax Simplification (OTS) calls on the government to prioritise action to ‘address long-standing concerns about the experience of smaller businesses’. The report considers the business lifecycle, especially those starting up and provides recommendations in five areas:
- providing simple step-by-step guidance about the key things a business needs to do in its early days to help things run smoothly
- improving the operation of the PAYE system
- implementation of HMRC’s Agents Strategy
- improving the mechanics of the Corporation Tax return process
- ensuring that tax changes are built on an understanding of business processes.
If you would like any help with your taxes at any stage of your business life cycle, please do get in touch.
Internet link: GOV.UK simplifying tax
A taskforce has recovered more than £5 million by tackling dishonest dog breeders selling pups on the black market. HMRC set up the taskforce in October 2015 after discussions with animal welfare groups that were concerned that tens of thousands of puppies were being reared in unregulated conditions and sold illicitly every year.
The taskforce uncovered fraudsters selling puppies on a mass scale, for a huge profit and due to the underground nature of the activity, failing to declare their sales.
Using civil and criminal enforcement powers, HMRC has recovered £5,393,035 in lost taxes from 257 separate cases since the formation of the taskforce in
The breeders and traders targeted include:
- two unconnected puppy breeders in the west of Scotland who were handed tax bills of £425,000 and £337,000
- a puppy breeder in the Midlands who was a former Crufts judge, given a £185,000 bill
- a dealer in Northern Ireland told to pay £185,000 in tax
- a Somerset puppy breeder was given a £114,000 bill
- a puppy dealer in the east of Scotland was handed a tax bill in excess of £400,000
- a Swansea puppy breeder was given a £110,000 tax bill.
Financial Secretary to the Treasury, Mel Stride MP, said:
‘It is utterly appalling that anyone would want to treat puppies in such an inhumane way and on such a scale. It’s also deeply unfair to all of the legitimate businesses who do pay the right tax, and the total recovered by the taskforce is equivalent to the annual salaries for more than 200 newly qualified teachers.’
‘We continue to work hard with other government agencies and our partners to tackle these traders. We urge anyone with information about tax evasion to report it to HMRC online or call our Fraud Hotline on 0800 788 887.’
Internet link: GOV.UK news
The forms P11D which report details of benefits and some expenses provided to employees and directors for the year ended 5 April 2019, are due for submission to HMRC by 6 July 2019. The process of gathering the necessary information and completing the forms can take some time, so it is important that this process is not left to the last minute.
Employees pay tax on benefits provided as shown on the P11D, generally via a PAYE coding notice adjustment or through the self assessment system. Some employers ‘payroll’ benefits and in this case the benefits do not need to be reported on forms P11D but employers should advise employees of the amount of benefits payrolled.
In addition, regardless of whether the benefits are being reported via P11D or payrolled the employer has to pay Class 1A National Insurance Contributions at 13.8% on the provision of most benefits. The calculation of this liability is detailed on the P11D(b) form. The deadline for payment of the Class 1A NIC is
19th July 2019 (or 22nd for cleared electronic payment).
HMRC has produced an expenses and benefits toolkit. The toolkit consists of a checklist which may be used by advisers or employers to check they are completing the forms correctly.
If you would like any help with the completion of the forms or the calculation of the associated Class 1A NIC please get in touch.
From April 2019, Welsh taxpayers were assigned new income tax codes beginning with the letter ‘C’. However, HMRC recently revealed that some Welsh taxpayers were mistakenly given Scottish income tax codes by their employers. As a consequence, Welsh taxpayers have been charged income tax using the Scottish income tax rates and bands.
For 2019/20 the Welsh rate of income tax is set at 10% and this is added to the UK rates, which are each reduced by 10%. Therefore, the overall tax payable by Welsh taxpayers continues to be the same as English and Northern Irish taxpayers.
The income tax rates and bands that apply to employment income, self-employed trade profits and property income are different for taxpayers who are resident in Scotland, with tax rates and bands ranging from 19% to 46% rather than the 20% to 45% which apply across the rest of the UK. Tax codes for Scottish taxpayers begin with the letter ‘S’.
HMRC stated that it does not know the full extent of the error or how many Welsh taxpayers have been affected but they will carry out a review of the operation of Welsh tax codes in June 2019.
Llyr Gruffydd, Chair of the National Assembly for Wales’ Finance Committee, said:
‘We raised concerns about the flagging process for identifying Welsh taxpayers during our enquiries into fiscal devolution and the Welsh government’s draft budget.
‘On each occasion, we were told the matter was in hand, and the lessons from the devolution of income tax powers to Scotland, where there were similar issues, had been soundly learned and would be put into effect. We are seeking an immediate explanation of how this has happened and will be asking representatives from HMRC to appear before this Committee in the near future.’
If you have any concerns about tax codes, please get in touch.
The government has launched a consultation on proposed reforms at Companies House, including a ‘major upgrade’ of its register.
The consultation aims to tackle misuse of the register. It also strives to provide business owners with ‘greater protection from fraud’.
The consultation seeks views on a series of reforms to limit the risk of misuse:
- knowing who is setting up, managing and controlling companies
- improving the accuracy and usability of data on the companies register
- protecting personal information on the register
- ensuring compliance, sharing intelligence and other measures to deter abuse of corporate entities
Louise Smyth, Chief Executive of Companies House, said:
‘This package of reforms represents a significant milestone for Companies House as they will enable us to play a greater part in tackling economic crime, protecting directors from identity theft and fraud, and improving the accuracy of the register.’
The consultation is open until 5 August 2019.
A capital gains tax (CGT) exemption applies when an individual disposes of a dwelling that has been used as their only or main residence under the Private Residence Relief (PRR) rules. The exemption applies as long as the relevant conditions are met throughout the total period of ownership. This relief is supplemented by ancillary reliefs that aim to deal with other related situations.
The government has previously announced and legislated to reform two of the ancillary reliefs to better target PRR at owner-occupiers. The reliefs which are being amended are:
- the final period exemption will be reduced from 18 months to nine months, although the special rules that give those with a disability, and those in care, an exemption of 36 months will not change
- lettings relief will be reformed so that it only applies where an owner is in shared occupancy with a tenant.
These changes will take effect from 6 April 2020. The government is now consulting on the changes in more detail and on how they will work in practice. It also invites views on some technical aspects of the PRR rules.
Internet link: GOV.UK consultation
New company car advisory fuel rates have been published which take effect from 1 June 2019. The guidance states: ‘You can use the previous rates for up to one month from the date the new rates apply’. The rates only apply to employees using a company car.
The advisory fuel rates for journeys undertaken on or after 1 June 2019 are:
|1400cc or less||12p|
|1401cc – 2000cc||15p|
|1400cc or less||8p|
|1401cc – 2000cc||9p|
|1600cc or less||10p|
|1601cc – 2000cc||12p|
HMRC guidance states that the rates only apply when you either:
- reimburse employees for business travel in their company cars or
- require employees to repay the cost of fuel used for private travel.
You must not use these rates in any other circumstances.
The Advisory Electricity Rate for fully electric cars is 4 pence per mile. Electricity is not a fuel for car fuel benefit purposes.
If you would like to discuss your car policy, please contact us.
Internet link: GOV.UK AFR
A recent Low Pay Commission (LPC) report sets out its findings on the number of people being paid less than the statutory minimum wage.
The LPC found that, in April 2018, 439,000 workers were paid less than the National Minimum Wage (NMW). Of this amount, 369,000 were employees aged 25 and over, who were paid less than the National Living Wage (NLW), an increase from previous years. On 1 April 2019, the NMW and NLW rates rose to the hourly rates detailed below:
|Minimum wage rate||Hourly rate from 1 April 2019|
|National Living Wage (for workers aged 25 and over)||£8.21|
|21-24 year-old rate||£7.70|
|18-20 year-old rate||£6.15|
|16-17 year-old rate||£4.35|
|Accommodation Offset||£7.55 per day: £52.85 per week|
The LPC also revealed that women are ‘more likely’ than men to be paid less than the NMW, and that underpayment is common amongst younger and older workers. In addition, underpayment was more common in certain sectors including hospitality, retail, cleaning, maintenance and childcare.
Commenting on the findings, Bryan Sanderson, Chair of the LPC, said:
‘Our analysis reveals a worrying number of people are being paid less than the minimum wage. We recently celebrated 20 years of the minimum wage – it has raised pay for millions of workers, but it is essential that people receive what they are entitled to.’
‘It is also vital for businesses to be able to operate on a level playing field, and not be illegally undercut on wages.’
Contact us for help with payroll issues.
Internet link: GOV.UK news