In this month’s enews we update you on the latest HMRC announcements relevant to individuals and businesses. We also report on developments in Pensions Auto Enrolment and Real Time Information.
Please do get in touch if you would like more information on any of the articles.
HMRC have introduced an optional system of ‘simpler income tax for smaller businesses’ which takes effect from April 2013 for smaller unincorporated businesses. As a consequence of this change, HMRC are withdrawing some non-statutory ‘business mileage’ deductions and existing agreements for ‘board and lodging’ private use adjustments as these have been superseded by the ‘simplified expenses’ rules.
HMRC have issued guidance in the form of a Tax Brief which sets out:
- transitional arrangements for the withdrawal of ‘board and lodging’ agreements.
- how businesses can use the ‘simplified expenses’ rules for business mileage, ‘board and lodging’ private use adjustments and flat rate adjustment for use of home.
Please do get in touch if this is something which would be of interest to you and your business so we can bear it in mind when completing your business accounts.
Internet link: Tax Brief
HMRC have published detailed guidance for charities and community amateur sports clubs (CASCs) on the new Gift Aid Small Donations Scheme (GASDS). Eligible charities and CASCs can claim payments from HMRC on small cash donations of £20 or less that they receive from 6 April 2013.
If you would like any advice in this area please do get in touch.
Internet link: Guidance
Under Pensions Auto Enrolment employers will have to automatically enrol eligible workers in a qualifying pension scheme and make pension contributions for those employees. The Auto Enrolment process is being rolled out in stages and the contributions will be increased over time to broadly 8%.
The government backed pensions option is the National Employment Savings Trust (NEST) which has received some criticism. To establish the level of concern, the Department of Work and Pensions sought views and evidence on whether the annual contribution limit and transfers restriction would impact many employers and employees. The government has now published the response to consultation.
Steve Webb Minister for Pensions said:
‘With over 250,000 members already, it is clear that NEST is a success. Targeting low to moderate earners that the market has traditionally forgotten, NEST has innovated with its use of language and investment strategy and has ensured that everyone has access to quality pension provision. That is why I am not making any changes until 2017, when automatic enrolment is fully rolled-out. At this point I will lift the contribution limit so that NEST remains a force for good in the marketplace, driving up standards and best practice.’
‘The position on bulk transfers is much the same. As huge numbers of employers gear-up to start to enrol their workers, we need NEST to focus on getting these people in to pension saving. Once this is achieved and the market is established, the restrictions on bulk transfers will be lifted.’
If you would like further advice on Pensions Auto Enrolment please do get in touch.
Internet link: Press release
HMRC have been trialling a new approach to enquiries, known as the Single Compliance Process (SCP).
Following feedback from the trial HMRC have now agreed that the opening letter, which advises the taxpayer that they are to be subject to the SCP, will give the taxpayer seven days to tell HMRC if they wish to deal directly with the matter themselves. If the taxpayer does not reply, HMRC will contact the taxpayer’s agent within 14 days to progress the case. If contact or progress cannot be made, then HMRC will go back to the taxpayer.
If you receive a letter advising that you are to be subject to a SCP then do please get in touch so we can deal with this matter on your behalf.
Internet link: HMRC news
HMRC have launched a tax return ‘amnesty’ for those individuals who have been issued with a self assessment tax return or notice to complete a tax return for any year up to 2011/12 and have not completed the return(s).
HMRC are offering ‘the best terms available’ to those who come forward now and take part in the ‘My Tax Return Catch Up’.
For those wishing to take part in ‘My Tax Return Catch Up’ there are three stages to the process:
- advise HMRC that they want to join the campaign by completing the online notification
- complete and submit all outstanding returns and
- pay outstanding liabilities or claim any repayment that might be due.
Once a taxpayer has notified HMRC that they wish to take part in this campaign, they will need to complete and submit their outstanding tax returns and generally pay any amounts due by 15 October 2013.
HMRC have advised that
- they will look at spreading the payments where the taxpayer is unable to pay the liability in full and
- by taking part in the campaign a taxpayer will increase their chances of paying reduced behavioural based penalties.
If you have any concern in this area please do get in touch.
Internet link: HMRC campaign
The Department for Business, Innovation and Skills (BIS) has published some useful guidance on employee share ownership following the Nuttall review.
The documentation includes some company model documentation together with guidance for employees on taxation matters.
Internet link: HMRC website
HMRC have received a number of requests since April 2013 from employers, asking for the status of their PAYE schemes to be changed to ‘annual’ which is only an option where employees are only paid once a year.
Unfortunately HMRC are currently unable to process requests from employers to:
- move to paying annually and register as an annual scheme
- change their payment frequency.
HMRC expect to have resolved this issue by the end of July and will confirm this on their website in the ‘What’s New’ section. Until that time, if an employer does not pay any employees, they should send in a ‘nil’ Employer Payment Summary by the 19th of each month.
When the fix is in place, HMRC will accept all the requests that have been made and change those schemes to annual. They will then provide information on what action should be taken once the fix is in place.
Internet link: HMRC What’s New
HMRC are reminding tax credits claimants that they need to renew their claims by the 31 July deadline or their payments might stop.
Nick Lodge, Director General of Benefits and Credits, said:
‘We are asking claimants to renew immediately. The sooner they do, the sooner we can check their payments and avoid paying too little, or too much money, which they then have to pay back.’
Tax credits renewal packs have been sent to about 5.8 million people since April. Last year more than 80% of claimants renewed by the 31 July deadline.
HMRC are asking claimants to check the accuracy of the information in their packs and to let them know about any changes to circumstances such as working hours, childcare costs, pay and whether they are single or living with a partner.
Claimants can renew by calling the Tax Credits helpline – 0345 300 3900, or post their renewal to the address in the pack that was sent to them.
The latest targets in HMRC’s sights are tax dodger’s involved in:
- the holiday industry in Blackpool, Lake District, North Wales, Devon and Cornwall
- restaurants in Yorkshire and Humber
- road hauliers in the Midlands and
- the fishing industry in Scotland.
David Gauke, the Exchequer Secretary to the Treasury, said:
‘We are determined to support hardworking people who want to get on in this industry and every other. However, the people being targeted by this taskforce have no intention of playing by the rules. The Government has made it clear that we will not tolerate tax evasion and we have provided HMRC with the resources to crack down on those who break the rules.’
HMRC have collected more than £80 million as a result of taskforces launched since 2011/12 and expect to recover over £90 million per year from taskforces launched over the next three years.
Internet link: Press release