HMRC TO ACCEPT FASTER PAYMENTS | 13/01/12
HMRC have announced that they will now accept payments made using the Faster Payments Service. This will allow taxpayers to make faster electronic payments, typically via internet or telephone banking, enabling them to be processed on the same or next day.
HMRC advise that if you want make payments using this method you should contact your bank or building society to confirm the following:
• the services available to you
• whether there are any single transaction or daily limits on the amount you can pay
• their latest cut off times for making a payment.
They are also stressing that when making a payment to HMRC it is important to ensure that you are using the correct bank account details and reference number.
CAPITAL ALLOWANCES IN ENTERPRISE ZONES | 13/01/12
Following the Autumn Statement at the end of November 2011, more information is now available in respect of the proposal to give 100% first year allowances on plant and machinery expenditure for use in some Enterprise Zone areas.
• The relief will only be available to trading companies.
• The plant must be new and represent an investment not a replacement of existing plant.
• The plant must be used primarily in designated assisted areas within Enterprise Zones.
• The allowance will apply for purchases made from 1 April 2012 up to 31 March 2017.
Some businesses and some types of expenditure are specifically excluded from the provisions.
PENSIONS AUTO ENROLMENT | 13/01/12
The Government has confirmed that pensions auto enrolment will commence in Autumn 2012 and all employers will remain within the scope of the rules.
However small businesses, those with less than 50 employees, will be given additional time to prepare for the implementation. The government have confirmed that no small employers are affected by the reforms before the end of this Parliament.
Minister for Pensions Steve Webb said:
‘Our society and economy needs to be based on a foundation of saving, not debt. Automatic enrolment will help millions save, and to not act will leave people poorer in retirement. That is why I am confirming today that automatic enrolment will start on time and all employers will be part of it.
We recognise that small businesses are operating in tough economic times so we are softening the timetable for implementation to give them some additional breathing space. This is a sensible step that ensures long term pension issues are addressed while meeting the short and medium term needs of small business.
We are committed to ensuring the employees of these small businesses get the chance to save and that is why no one will miss out.
Under the revised timeline, small business would begin automatically enrolling their staff in May 2015, instead of the current timing of April 2014. Half of all workers will still be automatically enrolled before the end of this Parliament.’
It is expected that further details will be announced and we will keep you informed of developments.
EU VAT Registration Letter Scam | 07/12/11
HMRC are warning of a new scam letter which is being sent to businesses. The letter requests payment of a fixed fee by credit card and provides a website address to activate VAT registration.
HMRC are advising that these letters are not issued by HMRC and the registration should not be completed or payment made.
Parties for Employees | 07/12/11
With the season for office parties fast approaching we thought it would be a good idea to remind you of the tax implications. The good news is that, unlike entertaining customers, the costs of entertaining employees are generally allowable against the profits of the business.
But what about the tax consequences for the employees themselves? Is it a perk of their jobs and will they have to pay tax on a benefit?
Generally, as long as the total costs of all employee annual functions in a tax year are less than £150 per attendee (VAT inclusive) there will be no tax implications for the employees themselves. In considering this limit make sure you have included all the costs, which may include not only the meal itself but also any drinks, entertainment, transport and accommodation that you provide.
If the costs are above the £150 limit then the full cost will be taxable on the employee. In that case do get in touch so we can advise you how best to deal with them.
Autumn Statement | 07/12/11
On Tuesday 29 November the Office for Budget Responsibility (OBR) published its updated forecast for the UK economy. Chancellor George Osborne responded to that forecast in a statement to the House of Commons later on that day.
The Chancellor emphasised that the OBR does not predict a recession in Britain but they have revised down their short term growth prospects for the country. He also made clear that the OBR central forecast assumes ‘the euro finds a way through the current crisis’.
The Autumn Statement sets out the actions the government will take in two main areas:
• protecting the economy and
• building a stronger economy for the future.
In order to maintain economic stability and meet its fiscal rules, the government will:
• set plans for public spending in 2015/16 and 2016/17 in line with the spending reductions over the Spending Review 2010 period
• raise the State Pension age to 67 between April 2026 and April 2028
• set public sector pay awards at an average of 1% for each of the two years after the current pay freeze comes to an end.
The growth plans include the publication of a National Infrastructure Plan 2011. The plan sets out a pipeline of over 500 infrastructure projects.
Other announcements include:
Credit easing
In order to free up lending to business, the government is launching a package of measures worth up to £21 billion to ease the flow of credit to businesses. This includes up to £20 billion for the National Loan Guarantee Scheme and £1 billion for the Business Finance Partnership.
Small business rate relief holiday
The government will extend the current small business rate relief holiday for a further six months from 1 October 2012 and also give businesses the opportunity to defer 60% of the increase in their 2012/13 business rate bills.
Employment regulations
In an attempt to make it easier to ‘hire and fire’, the government intends to:
• look for ways to provide a quicker and cheaper alternative to a tribunal hearing in simple cases by introducing a ‘Rapid Resolution’ scheme
• complete a call for evidence on the impact of reducing the collective redundancy process for redundancies of 100 or more staff from the current 90 days to 60, 45 or 30 days.
Youth Contract
A number of measures under the heading of a ‘Youth Contract’ will be introduced including government funding of:
• wage incentives for 160,000 young people to make it easier for private sector employers to take them on
• at least 40,000 incentive payments for small firms to take on young apprentices.
Seed Enterprise Investment Scheme (SEIS)
This is a new tax relief which will be introduced from 6 April 2012. It will provide income tax relief at 50% in respect of investment in a small company whose total assets before the investment are less than £200,000. The relief will be limited to investments of up to £150,000 in each company and a maximum of £100,000 investment for an individual. In addition an individual who makes a capital gain in 2012/13 and reinvests some or all of the gain in a SEIS company in the same year will obtain exemption from capital gains tax for the sum invested.
Tax treatment of asset-backed pension contributions
Rules are to be introduced from 29 November 2011 to limit tax relief for employers who enter into arrangements to make asset-backed contributions into their pension schemes. The new rules will ensure that the tax relief obtained more accurately reflects the actual costs to the employer.
Employee Information - Is it Correct? | 07/12/11
HMRC are reminding employers of the importance of correct employee information and have updated the questions on the introduction of Real Time Information (RTI). They have issued a number of questions and answers stressing the importance of correct details in the run up to the introduction of RTI in 2012/13.
According to the advice which has been issued:
‘It has always been important to make sure the information that you send HMRC about your employees is accurate to help ensure that your employees pay the correct Income Tax and NICs. Improving the accuracy of the information you hold and send to HMRC will help match the information to the correct HMRC record. This could save you money by helping to reduce the number of employee enquiries you receive.
This is not just important for tax and NICs. From October 2013, RTI will support Universal Credit by providing the Department for Work and Pensions with up to date information about claimants' employment income. Ensuring your employee information is correct will help to ensure they receive the right amount of Credit.
As part of the process for an employer joining RTI, HMRC will align the records of employees held on the NPS system and the records held by employers. HMRC will publish more information about the 'employer alignment' process soon.
In the meantime HMRC recommends that you start to prepare for RTI by checking the information you hold.’
Over 80% of matching problems experienced by HMRC are caused by incorrect information about an individual's name, date of birth or National Insurance number.
