Accounting
& Financial News
May
Key Tax Dates
1st May 2012
2 - Last day for car change notifications in the quarter to 5 April
- Use P46 Car
19 - Deadline for Employers' 2011/12 end of year PAYE Returns (P35,
P14, P38 &P38A). Penalties for non submission.
19/20 - PAYE/NIC, and CIS deductions due for month to 5/5/2012
31 - Deadline for copies of P60 to be issued to employees for 2011/12
P11D
deadline looming
1st
May 2012
The
forms P11D, and where appropriate P9D, which report employees and directors
benefits and expenses for the year ended 5 April 2012, are due for submission
to HMRC by 6 July 2012.
Employees pay tax on benefits provided as shown on the P11D, either
via a PAYE coding notice adjustment or through the self assessment system.
In addition, 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.
HMRC have issued some guidance as to common errors on the forms in the
latest Employer Bulletin. These include the following:
Not ticking the director box if the employee is a director
Not including a description or abbreviation where amounts are included
in box A, B, L, M or N of the form
Leaving the cash equivalent box empty
Failing to report the full gross value of the benefit where it is provided
for mixed business and private use
Not reporting a fuel benefit where one is due.
Correct completion of forms P11D can be a complex issue. If you would
like any help please get in
touch.
IR35
Proposals
11
April 2012
There has been a certain amount of panic in the contractor community
about a statement buried deep in the Budget documents about the reform
of IR35. It says:
"The Government is bringing forward a package of measures to tighten
up on avoidance through the use of personal service companies and to
make the existing IR35 legislation easier to understand. This will include
HMRC strengthening specialist compliance teams, simplifying the way
IR35 is administered, and consulting on proposals which would require
office holders/controlling persons who are integral to the running of
an organisation, to have PAYE and NICs deducted at source."
This
does not mean that everyone who is an office-holder (i.e. director or
company secretary) of their own personal service company will have to
be paid via PAYE. The proposed law change is aimed at the following
situation:
A is an office-holder of PLC, such that he personally holds a position
on the board of PLC, or has a controlling role within PLC. Instead of
being paid a salary by PLC, A has agreed that his own personal service
company (L Ltd), will send PLC an invoice for the time he spends on
PLC business. PLC may be a large company, or a public department, or
a local authority. In this case PLC will have to pay A through its payroll.
PLC will not be permitted to pay A through L Ltd.
This change in the law will not affect genuine freelance workers or
contractors who do not take up positions on the boards of their customers.
Get
in touch if you need any advice on operating a personal services company.
HMRC to cap certain tax reliefs
10 April 2012
In
an attempt to ensure that higher rate tax payers make a reasonable contribution
to UK tax revenues new legislation is to be introduced from 6 April
2013 that limits access to certain, tax reliefs. Taxpayers will be denied
relief(s) if the claim exceeds 25% of their income or £50,000,
whichever is the greater.
This
will not affect tax reliefs which are already capped such as Enterprise
Investment Scheme and pension reliefs, but may affect “open-ended”
reliefs such as interest relief on qualifying loans and gift aid relief.
Ironically,
this may mean that tax planning opportunities available to 50% rate
tax payers in 2012-13, may produce more tax savings than if applied,
and capped, in 2013-14 when the top rate of tax is reduced to 45%.
VAT
Updates
April 2012
The Government has decided to tidy up some of the areas of VAT law where
a different rate of VAT may be charged on very similar goods or services.
See our VAT
pages for more.
The
Budget
23
Mar 2012
For key points & a full breakdown, click
here.
HMRC
backs off business record checks
03 Mar 2012
You
may have read in the financial press that HMRC have recently backed
away from their aggressive business record checking campaign. However,
this particular issue is likely to reappear after 5 April 2012, albeit
with a ‘softer’ face.
For
the time being HMRC are consulting with professional bodies and interested
parties to come up with a ‘son of business records checks’
campaign.
From
the results they have produced thus far the expected haul of badly prepared
business records has failed to materialise but it is unlikely that HMRC
will relax their vigilance in this area completely. We will advise you
of the scope of the new scheme as soon as details are published.
Phishing
tips from HMRC
16 Feb 2012
During
the last three months HMRC has helped to close down 185 websites that
are purporting to hand out tax refunds to taxpayers.
Individuals
receive an email and are requested to part with personal details of
their bank or credit card accounts to facilitate the supposed tax refund.
HMRC
will only ever contact you about these matters by post. Currently they
do not use telephone calls, emails or external companies.
If you do receive a suspicious email:
1.
Forward the email to HMRC at phishing@hmrc.gsi.gov.uk and then delete
it from your hard drive.
2. Do not click on any website addresses, attachments or other links
in the email.
3. Follow advice from www.getsafeonline.co.uk.
4. If you have inadvertently provided details of your bank or credit
card accounts call your bank or card provider immediately.
Higher rate tax payers are you missing out?
16 Feb 2012
Do
the following criteria apply to you?
•
Do you make payments into your own or your employer’s pension scheme?
• Do you pay higher rate tax, 40% or 50%?
• Have you omitted to claim higher rate tax relief on the contributions
you have made?
If
your answer to these questions is Yes, or Yes and No, then you may be
one of the estimated 425,000 UK tax payers that are failing to claim
higher rate relief on workplace pension contributions.
You
may for instance assume that your payroll department are dealing with
this for you. Or, that the Government automatically channels any refunds
due into your pension pot. This is often not so.
If
you pay ‘net’ contributions the tax office will top-up your
fund for the standard rate tax paid of 20%. The remaining 20% tax relief,
(if you pay tax at 40%) or 30%, (if you pay tax at 50%) has to be claimed
from HMRC direct.
Which
pension schemes are affected?
Most
money purchase pension arrangements are affected, including:
• Personal pension plans (including Self Invested Personal Pensions
- SIPPS)
• Workplace ‘contract based schemes’ including group
personal pensions, group stakeholder schemes and group SIPPS.
The
following schemes are not affected:
• All final salary schemes
• Money purchase schemes that operate through a salary sacrifice
arrangement in which case pension contributions are made before tax
is deducted.
• Schemes where contributions are deducted from taxable pay.
How
do I make a claim? You need to make a claim in writing to HMRC as soon
as possible. Claims can be backdated for up to four years. We would,
of course, be delighted to do this for you.
Tax
changes this year and beyond
10 Jan
2012
On
6 December 2011 HMRC published draft clauses for the 2012 Finance Bill.
This will set the scene for tax changes in 2012-13 and subsequent tax
years. Notable items include:
1.
From 1 April 2013 companies will be able to apply a 10% tax rate on
profits attributable to patents and other intellectual property.
2. Research & Development tax credits are to be improved.
3. The new statutory residence test is to be introduced from April 2013,
a year later than expected.
4. A new scheme to encourage investment in new, small start up companies
will be launched from April 2012. The scheme will be a variant of the
present EIS scheme and will be known as the Seed Enterprise Investment
Scheme. Whilst reliefs may be greater, investment limits are more restricted.
5. The present EIS and Venture Capital Trust legislation will be more
restrictive in order to focus on higher risk activities.
6. The UK tax position of certain non-domiciled individuals is changing
from 6 April 2012.The good news is that non-doms will be able to bring
in funds to invest in the UK without being penalised; the bad news is
that for non-domiciles who have been resident in at least 12 of the
previous 14 tax years, the present annual charge payable to secure more
favourable tax breaks is to increase from £30,000 to £50,000
from April 2012.
7. The UK Controlled Foreign Company (CFC) rules are to be relaxed in
certain circumstances. Not all of the expected changes in this area
have been published – the remainder are expected to be made public
shortly.
