Newsletter – August 2017

Enews – August 2017

In this month’s eNews we update you on the latest developments in Making Tax Digital together with an update on the Taylor Review and the latest employment and pensions auto enrolment statistics. We also report on the new Fundraising Preference Service and how to spot scam HMRC emails.

New timetable for Making Tax Digital

The government has announced a revised timetable for the introduction of Making Tax Digital for Business (MTDfB).

MTDfB introduces extensive changes to how taxpayers record and report income to HMRC. Unincorporated businesses, including landlords, were expected to be the first to see significant changes in the recording and submission of business transactions but the government has announced a delay to the implementation of the new rules and some exceptions for smaller businesses.

The government had decided how the general principles of MTDfB will operate after receiving responses to their original ideas first published in August 2016. Some legislation was published in Finance Bill 2017 but this was removed due to the General Election.

Under MTDfB, businesses will be required to:

  • maintain their records digitally, through software or apps
  • report summary information to HMRC quarterly through their ‘digital tax accounts’ (DTAs)
  • submit an ‘End of Year’ statement through their DTAs.

The new timetable is being introduced following concerns raised by the Treasury Select Committee, businesses and professional bodies about the implementation of the new rules and to hopefully ensure a smooth transition to a digital tax system.

Mel Stride, Financial Secretary to the Treasury and Paymaster General said:

‘Businesses agree that digitising the tax system is the right direction of travel. However, many have been worried about the scope and pace of reforms.

We have listened very carefully to their concerns and are making changes so that we can bring the tax system into the digital age in a way that is right for all businesses.’

The government has confirmed that under the new timetable:

  • only businesses with a turnover above the VAT threshold (currently £85,000) will have to keep digital records and only for VAT purposes
  • they will only need to do so from 2019
  • businesses will not be asked to keep digital records, or to update HMRC quarterly, for other taxes until at least 2020.

This means that businesses and landlords with a turnover below the VAT threshold will not have to move to the new digital system.

Ministers have also confirmed that the Finance Bill will be introduced as soon as possible after the summer recess and that all policies originally announced to start from April 2017 will be effective from that date.

The government has also confirmed that the proposed changes to VAT reporting will come into effect from April 2019. From that date, businesses trading above the VAT threshold will have to provide their VAT information to HMRC through Making Tax Digital software.

Internet link: GOV news

Taylor Review of employment practices

The long awaited Taylor Review of employment practices suggests that a national strategy is needed to help provide security in such areas as wages, quality of employment, education and training, working conditions, work life balance and the ability to progress at work.

One of the areas of focus relates to the ‘gig’ economy, with the report recommending the creation of a new category of worker, known as a ‘dependent contractor’, to provide additional rights and benefits for those who are currently classed as self-employed, but who work for businesses which have a ‘controlling and supervisory’ relationship with their workers.

The additional benefits would include sick pay, holiday entitlement and the minimum wage, and the new employment status would also oblige these businesses to pay national insurance contributions for these workers.

Business groups have given mixed reactions to the report’s findings, with many welcoming the focus on labour market flexibility, but also warning that some areas, including the plans to rewrite employment status tests, are a cause for concern.

However, the TUC warned that the review ‘is not the game-changer needed to end insecurity and exploitation at work’

Internet link: Taylor Review

Automatic enrolment reaches 8 million

The Pensions Regulator (TPR) has confirmed than eight million employees have signed up for a workplace pension since the launch of automatic enrolment.

The introduction of automatic enrolment was expected to lead to around eight million workers saving more for their retirement and this milestone has already been reached with hundreds of thousands more employers still to enrol staff over the coming months.

Minister for Pensions and Financial Inclusion Guy Opperman said:

‘Reaching this eight million figure is a formidable achievement and represents a huge number of people on the path to a more financially secure retirement.’

‘But we cannot be complacent and as contribution rates rise we know there is more to be done. That’s why our automatic enrolment review, which will report back later this year, is so vital to the future of this life-changing policy.’

TPR’s report shows that at the end of June 2017, 8,165,000 workers were enrolled in workplace pensions. Darren Ryder, TPR’s Director of Automatic Enrolment, said:

‘Tens of thousands more people every week are signing up to a new workplace pension through automatic enrolment. Employers are continuing to become compliant and to remain so, allowing their staff to get the pensions they are entitled to.’

‘There are more than 500,000 more employers whose duties are still to begin over the coming months. I would urge each and every one of them to check today that they know what they need to do and when they need to do it so they can seek our help if they need it.’

If you would like help or advice on complying with your Auto Enrolment duties please do get in touch.

Internet links: Press release Report

Latest labour market statistics

The latest labour market statistics for the period March to May 2017 showed a 175,000 rise in employment and 64,000 fall in unemployment.

Estimates from the Labour Force Survey show that, between December 2016 to February 2017 and March to May 2017, the number of people in work increased, the number of unemployed people fell, and the number of people aged from 16 to 64 not working and not seeking or available to work (economically inactive) also fell.

Some of the findings were:

  • There were 32.01 million people in work, 175,000 more than the previous quarter.
  • The employment rate (the proportion of people aged from 16 to 64 who were in work) was 74.9%, the highest since comparable records began in 1971.
  • Latest estimates show that average weekly earnings for employees in Great Britain in nominal terms (that is, not adjusted for price inflation) increased by 1.8% including bonuses, and by 2.0% excluding bonuses, compared with a year earlier.
  • Latest estimates show that average weekly earnings for employees in real terms (adjusted for price inflation) fell by 0.7% including bonuses, and fell by 0.5% excluding bonuses, compared with a year earlier.

For more details visit the link below.

Anna Leach, CBI Head of Economic Intelligence, said:

‘These figures underline the strength of the UK’s flexible labour market, which was recognised in …. Taylor Review. But declining real pay and productivity remain concerning, reinforcing the imperative that any changes following the review support the economy’s ability to create great jobs.’

‘Making real progress on productivity growth requires a modern industrial strategy, with real change on the ground on skills, infrastructure and innovation.’

Internet links: ONS employment statistics CBI news

HMRC genuine and phishing/bogus emails and calls

HMRC have issued an update of their guidance on how to recognise genuine HMRC contact be it via email or text.

HMRC also provide advice on what to do if you have received a phishing/bogus email related to HMRC, or you are not sure if it is genuine, you can read about how to report internet scams and phishing to HMRC.

Internet link: HMRC guidance

Charities bound by new Fundraising Preference Service

A new service is now available for individuals who want to limit the contact they receive from charities. The Fundraising Preference Service (FPS) should give individuals greater control over how and when charities can contact them. The FPS, which launched on 6 July, allows individuals to select charities that they no longer want to receive communications from.

Under the FPS, where an individual opts out from a specified charity, this will apply to all forms of communication with a named individual including email, text, phone and addressed mail.

Although the FPS is primarily an online service a phone service is available to support those who are vulnerable or without IT. The Fundraising Regulator will notify specified charities of suppression (those people opting out) and monitor compliance. Charities need to ensure they comply with these new rules.

Internet link: FPS

Newsletter – August 2016

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Enews – August 2016

In this month’s eNews we report on forthcoming restrictions in interest relief on residential property, TPR statistics and HMRC’s latest ‘tax cheat’ targets. We also report on the latest labour market statistics, revised student loan deduction guidance for employers, ACAS guidance on working in hot temperatures, should we have any more, and the latest Charity annual return.

Please do get in touch if you would like any further guidance on any of the areas covered.

Residential property income and interest relief

The government has issued guidance and examples on the restriction of income tax relief for interest costs incurred by landlords of residential properties. The new rules, which are phased in from April 2017, only apply to residential properties and do not apply to companies or furnished holiday lettings.

From April 2017 income tax relief will start to be restricted to the basic rate of tax. The restriction will be phased in over four years and therefore be fully in place by 2020/21. In the first year the restriction will apply to 25% of the interest, then 50% the year after and 75% in the third.

The restriction may result in additional amounts of tax being due but will depend on the marginal rate of tax for the taxpayer. Basic rate taxpayers should not be substantively affected by these rules. A higher rate taxpayer will, in principle, get 20% less relief for finance costs. However the calculation method may mean that some taxpayers move into the higher rate tax brackets as the following example illustrates:

Consider the 2020/21 tax year when the transitional period is over. Assume that the personal allowance is £11,000, the basic rate band £32,000 and the higher rate band starts at £43,000.

Assume Ellisha has a salary of £28,000, rental income before interest of £23,000 and interest on the property mortgage of £8,000. Under the current tax rules, taxable rental income is £15,000. She will not pay higher rate tax as her total income is £43,000 – the point from which higher rate tax is payable.

With the new rules, taxable rental income is £23,000. So £8,000 is taxable at 40% – £3,200. Interest relief is given after having computed the tax liability on her income. The relief is £8,000 at 20% – £1,600. So an extra £1,600 tax is payable.

Other complications

It should be noted that the tax reduction cannot be used to create a tax refund. So the amount of interest relief is restricted where either total property income or total taxable income (excluding savings and dividend income) of the landlord is lower than the finance costs incurred. The unrelieved interest is carried forward and may get tax relief in a later year.

Child benefit is clawed back if ‘adjusted net income’ is above £50,000. Interest will not be deductible in the calculation of ‘adjusted net income’.

The personal allowance is reduced if ‘adjusted net income’ is above £100,000.

Please contact us if you would like advice on how these rules will affect you.

Internet links: News Examples

TPR latest pensions auto enrolment awareness

According to the latest research by the TPR, based on surveys carried out between February and April 2016, the understanding amongst small employers of their duties under pensions auto enrolment saw a significant rise from 68% to 81%.

Executive Director of Automatic Enrolment, Charles Counsell said:

‘More than 9 in 10 small employers are now aware of automatic enrolment, and there is now almost universal engagement from business advisers helping their clients to carry out their duties.

This is the first employers’ survey since large numbers of small and micro employers have begun to visit TPR’s website for help in meeting their duties. It’s great to see such positive feedback, with 79% of the employers who used our website finding all or most of what they needed.’

Other key findings from the employers’ survey were as follows:

  • Understanding remained largely unchanged for micro employers, rising from 56% to 60%.
  • Direct communications from TPR continued to be the main catalyst for employers to start preparing for automatic enrolment. Of those employers who stated that both TPR direct communications and advertising prompted action, nearly two thirds stated the advertising encouraged them to look again at the direct communications.
  • The vast majority (90%) of employers continued to express confidence in future compliance with automatic enrolment (93% in Autumn 2015).
  • The majority of employers continued to have positive perceptions of workplace pensions. However, automatic enrolment was still more likely to be perceived as a challenge among micro employers than among small employers.

The research can be found here employers’ research.

If you would like help with pensions auto enrolment please contact us.

Internet link: TPR press release

HMRC latest ‘tax cheat’ targets

HMRC have launched a new taskforce to tackle wealthy tax cheats who are living beyond their means in Northern Ireland and expect the campaign to recover approximately £18 million.

HMRC have announced that they are using Land Registry and Merchant Acquirer data to identify those with ‘badges of wealth’ such as large houses, aeroplanes, boats and undeclared offshore bank accounts which are not in keeping with the information they report to HMRC.

HMRC’s Ian McCafferty, Taskforce Lead, said:

‘Our intelligence shows that people being targeted by this taskforce have no intention of playing by the rules and could end up facing a heavy fine or even a criminal conviction. Those who pay the tax they are supposed to have nothing to worry about.

Using the information we hold, we can target people whose lifestyle does not reflect the tax they are paying. It’s not fair that a small minority are living the millionaire lifestyle as a result of them not paying their tax, while the rest of us live within our means and pay our fair share.

Earlier this year a separate taskforce used similar HMRC data to identify and prosecute Dr Francis Gerard D’Arcy, a Belfast ear, nose and throat consultant. After a successful prosecution, he was sentenced to four concurrent, two-year jail sentences for evading taxes of nearly £500,000. This new taskforce will be targeting similar wealthy individuals who have evaded their taxes.’

Other HMRC taskforces are in operation in various parts of the country. These can be viewed here

Internet link: News

Latest ONS labour market statistics

The ONS has announced that in the three months from March to May 2016, the number of people in work increased. The number of unemployed people and the number of people not working and not seeking or available to work (economically inactive) fell.

The statistics reveal that there were:

  • 31.70 million people in work (176,000 more than for the three months to February 2016 and 624,000 more than for a year earlier).
  • 23.19 million people working full-time (401,000 more than for a year earlier)
  • 8.52 million people working part-time (223,000 more than for a year earlier).

The employment rate (the proportion of people aged from 16 to 64 who were in work) was 74.4%.

There were 1.65 million unemployed people (people not in work but seeking and available to work), 54,000 fewer than for the three months to February 2016.

Average weekly earnings increased by 2.3% including bonuses and by 2.2% excluding bonuses compared with a year earlier.

Rain Newton-Smith, CBI Chief Economist, said:

‘These figures confirm the UK labour market continued to create jobs ahead of the referendum vote, although there was some underlying uncertainty represented by falling vacancies and subdued wage growth.

Prospects for the labour market are now more uncertain following the UK’s decision to leave the EU. This highlights the need for continued labour market flexibility, and to ensure the National Living Wage remains affordable for businesses, reflecting the broader economic situation.

Ultimately, increasing productivity, including by ensuring everyone has the skills to meet their full potential, will help to share prosperity across all areas of the UK.’

Internet links: ONS Bulletin CBI news

Updated student loan deduction guidance

HMRC have issued updated guidance to employers on how to deal with student loan deductions via the PAYE system.

Employers should familiarise themselves with the guidance which has been updated to reflect the introduction of plan 2 loans which are repayable from a different threshold but at the same nine percent basis.

With effect from the 2016/17 tax year there are two plan types for student loan repayments:

  • plan 1 with a threshold of £17,495 (£1,457 a month or £336 per week)
  • plan 2 with a threshold of £21,000 (£1,750 a month or £403 per week)

The updated guidance includes the following advice on identifying the plan type:

‘Start making student loan deductions from the next available payday using the correct plan type if any of the following apply:

  • your new employee’s P45 shows deductions should continue – ask your employee to confirm their plan type
  • your new employee tells you they’re repaying a student loan – ask your employee to confirm their plan type
  • your new employee fills in a starter checklist showing they have a student loan – the checklist should tell you which plan type to use
  • HM Revenue and Customs (HMRC) sends you form SL1 ‘Start Notice’ – this will tell you which plan type to use

If your employee doesn’t know which plan type they’re on, ask them to contact the Student Loan Company (SLC). If they’re still unable to confirm their plan type, start making deductions using plan type 1 until you receive further instructions from HMRC.’

If you would like any advice or help with payroll matters please get in touch.

Internet link: Guidance

Working in hot temperatures

ACAS have some guidance on ‘hot weather’ working. The guidance confirms that:

‘In the UK there is no maximum temperature that a workplace is allowed to be, rather advice from the Health & Safety Executive (HSE) states ‘during working hours, the temperature in all workplaces inside buildings shall be reasonable’. What is reasonable depends on the type of work being done (manual, office, etc) and the type of workplace (kitchen, air conditioned office, etc).

The HSE offers further guidance on workplace temperatures including details on carrying out an optional thermal comfort risk assessment if staff are unhappy with the temperature – Health and Safety Executive (HSE) – Temperature.’

The ACAS guidance also covers issues such as getting to work, keeping cool at work, fasting during hot weather, vulnerable workers and dress code during hot weather.

Internet link: ACAS website

Charity news

Annual returns

The Charity Commission, which is the relevant body for charities registered in England and Wales, has announced that its latest annual return is now available and can be found on GOV.UK.

All registered charities, in England and Wales, with an income of more than £10,000 and all Charitable Incorporated Organisations reporting on their financial years ending in 2016 must complete the online form within ten months of the end of their financial year.

Part of the data submitted is used to populate the Charity Commission’s online public register of charities, which is a key source of data about charities in England and Wales.

The Charity Commission would like trustees to be aware that the function to view and amend details about a charity’s trustees, contact addresses and emails is now separate from the annual return, so charities can update these details at any time. Charities will also be asked to confirm that this information is correct before submitting their annual return.

David Holdsworth, Chief Operating Officer at the Charity Commission, said:

‘We are delighted to announce the official launch of the 2016 annual return in both English and Welsh. This is a first for the commission and is also part of our commitment to becoming a truly digital by default regulator. We have worked closely with the sector to ensure we are providing easy to use services that help trustees comply with their filing duties.

Although charities have 10 months from the end of their financial year to complete their annual return, we urge them not to wait until then. We also encourage them to take a minute to make sure their information is up to date, and to use the built in customer feedback to tell us what they think.’

The commission is also taking this opportunity to remind trustees that filing their charity’s annual return on time is essential so that:

  • they are accountable to the regulator,
  • transparent in their activities for the benefit of the public, and
  • demonstrate compliance to their donors.

Failure to file on time can result in the commission taking regulatory action.

Northern Ireland

For charities registered in Northern Ireland the Charity Commission for Northern Ireland is the relevant body and returns should be submitted via charitycommissionni/annual reporting. This applies to registered charities, not to those on the deemed list which have not yet been entered on the register.


Please note that for charities registered in Scotland the equivalent return, should be submitted to the Scottish Charity Regulator within nine months of their year end OSCR/online-services.


In other charity news the Scottish Charity Regulator has announced the adoption of a new model for fundraising regulation for Scotland. In England, Wales and Northern Ireland the new Fundraising Regulator will oversee standards for fundraising and deal with complaints about charity fundraising.

In Scotland a new Independent Panel, with representatives from the public, fundraising professional bodies, charities, OSCR and the Scottish Government will fulfil this function. The aim is to have the panel in place by the autumn of 2016. In the meantime a Scottish fundraising complaints hub has already been set up.

Please contact us for further information on charity returns and accounts or any guidance in this area.

Internet link: News

Newsletter – May 2015

May 2015 Enews

In this month’s eNews we report on a number of issues including recent warnings over pension scams, guidance on the things to avoid when completing forms P11D and the latest labour market statistics. We also include links to the latest Pensions Regulator auto enrolment guidance for employers with no workers and the updated VAT fuel scale charge rates.

Please contact us if you would like further information.

Parliamentary processes

With the political parties campaigning well underway in anticipation of the General Election on 7 May and Parliament having been prorogued there are few Government announcements to report this month. However by the time we issue next month’s eNews we will have a new Parliament.

For details of the relevant dates and formal procedures visit the following link.

Internet link: GOV.UK news

Latest labour market statistics

The Office for National Statistics has issued the latest labour market data for the three months to February 2015 which show that unemployment fell by 76,000 to 1.84 million.

Neil Carberry, CBI Director for Employment and Skills said:

‘It’s great to see 248,000 more people in work, the fastest rise in employment in just under a year – thanks to our flexible jobs market.

With real wage growth rising people have a little more money in their pockets. But we need to see a recovery in productivity before wages can rise faster.’

Internet links: ONS statistics CBI news

Warning over pension scams

Those approaching retirement are being urged to be aware of a rise in pension scams, as criminals seek new ways to defraud pensioners.

Savers have been urged to be aware of a rise in pension scams, as criminals seek new ways to defraud pensioners. A report produced by Citizens Advice looked at 150 cases where pensioners had fallen victim to fraudsters. The report identified common types of scams which include:

  • encouraging pensioners to move their savings into a ‘new’ pension
  • fake investment opportunities and
  • offering apparently ‘free advice’ and support which actually costs money.

In some cases pensioners are charged a fee for a service that isn’t required, while others are encouraged to part with personal information and bank details, either by email or phone.

Gillian Guy, Chief Executive of Citizens Advice said:

‘Scammers see pensioners as a prime target….‘There are many people looking to benefit from the new pension rules, including scammers. Fraudsters can ruin people’s retirement plans by taking a portion or all of a victim’s pension pots.’

The Pensions Regulator (TPR) has recently launched a campaign to alert people to the danger posed by fraudsters.

From 6 April 2015 individuals have more flexibility as to how they use their pension pot, including the option to choose to take all their savings as a cash lump sum. TPR has warned that scammers are exploiting this change by enticing those about to retire with promises of ‘one-off investments‘ or ‘pension loans’ or ‘upfront cash’, most of which are bogus.

Individuals who believe they are being targeted by a pension scam should contact the Pensions Advisory Service on 0300 123 1047. The Financial Conduct Authority’s website also has a list of known scams. Visit

Internet links: Citizens Advice publications Press release

TPR guidance for small employers with no ‘staff’

The Pensions Regulator (TPR) has updated its guidance on pensions auto enrolment including what businesses need to do when they have no workers.

If you would like help with auto enrolment please do get in touch.

Internet link: TPR guidance

Lack of awareness of VAT rules

According to research 36% of the UK’s smallest businesses are unaware of the rules governing VAT thresholds.

A third of the UK’s smallest businesses are unaware of the rules governing VAT thresholds, recent research has revealed.

This lack of understanding could mean that approximately 780,000 businesses are at risk of being fined by HMRC.

Meanwhile, according to the research, 9%% of small businesses intentionally limit their trading in order to avoid reaching the VAT threshold.

Under the current rules, where a taxable person (for example an individual, company or partnership) has VAT taxable turnover of more than the current registration threshold of £82,000 in a rolling 12 month period or where turnover is expected to exceed the registration threshold in the next 30 day period then they must register for VAT.

It is important to monitor turnover, as there is a penalty for late registration in addition to the tax payable.

Please contact us if you would like advice on VAT issues.

Internet links: icaew news GOV.UK news

P11D forms – don’t get them wrong

HMRC have published a list of common errors in the completion of forms P11D. The information is part of the latest Employer Bulletin and we have reproduced the guidance below.

  • Submitting duplicate P11D information on paper where P11D information has already been filed online to ensure ‘HMRC have received it’. These duplicates can cause processing problems.
  • Using a paper form that relates to the wrong tax year – check the top right hand corner of the first page.
  • Not ticking the ‘director’ box if the employee is a director.
  • Not including a description or abbreviation, where amounts are included in sections A, B, L, M or N of the form.
  • Leaving the ‘cash equivalent’ box empty where you’ve entered a figure in the corresponding ‘cost to you’ box of a section.
  • Completing the declaration on the final FPS/EPS submission accurately (for those employers whose software package requires them to be completed) or question 6 in section A of RT 4 form to indicate whether P11Ds are due.
  • Not advising HMRC either by paper form P11D(b) or electronic submission that there is no Benefits in Kind & Expenses return to make.
  • Where a benefit has been provided for mixed business and private use, entering only the value of the private-use portion – you must report the full gross value of the benefit.
  • Not completing the fuel benefit box/field where this applies. This means an amended P11D has to be sent in.
  • Incorrectly completing the ‘from’ and ‘to’ dates in the ‘Dates car was available’ boxes. For example entering 06/04/2014 to 05/04/2015 to indicate the car was available throughout that year. If the car was available in the previous tax year, the ‘from’ box should not be completed and if the car is to be available in the next tax year, the ‘to’ box should not be completed.

If you would like help with the completion of the forms P11D please contact us.

Internet link: Employer Bulletin 53

VAT fuel scale charges

HMRC have 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 2015.

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 VAT matters.

Internet link: GOV.UK news

VAT recovery on car-derived vans and combi vans

HMRC have issued a list of makes and models of car derived vans and combi vans which VAT registered businesses can use to determine if the VAT paid on the purchase can be reclaimed as input tax.

The issue is that VAT will normally be claimable in full on the purchase of a commercial vehicle. However if the vehicle purchased is a passenger car VAT is not recoverable unless it is used ‘exclusively for the purposes of a business’. Generally cars are therefore VAT ‘blocked’ and no input VAT is recoverable.

The VAT guidance states

‘Motor car means any motor vehicle of a kind normally used on public roads which has three or more wheels and either:

a) is constructed or adapted solely or mainly for the carriage of passengers; or

b) has to the rear of the driver’s seat roofed accommodation which is fitted with side windows or which is constructed or adapted for the fitting of side windows’

Whether or not a vehicle is commercial is not specifically defined but instead the definition of a car excludes:

  • vehicles capable of accommodating only one person or suitable for carrying twelve or more people including the driver
  • vehicles of more than three tonnes unladen weight;
  • caravans, ambulances and prison vans
  • special purpose vehicles such as ice cream vans, mobile shops, hearses, bullion vans and breakdown and recovery vehicles
  • vehicles constructed to carry a payload of one tonne or more.

Many car-derived vans are not cars for VAT purposes as they have no rear seats, have metal side panels to the rear of the front seats and a load area which is highly unsuitable for carrying passengers etc.

HMRC have issued the clarification due to developments in the car-derived van market as some vehicles with a payload of less than one tonne, have ‘blurred’ the distinction between cars and vans.

If you would like help with this or any other VAT issue please contact us.

Internet link: GOV.UK news


Newsletter – November 2013

In this month’s enews we report that HMRC have announced a new approach to Business Records Checks and that research shows that many employers fail to pay employment tribunal awards.

Please contact us if you would like any further details on any of the issues covered.


Employers fail to pay tribunal awards

According to government commissioned research into the outcome of employment tribunals more than 50% of those awarded payments do not receive their full award.

The study by IFF Research found 49% of claimants had received payment in full and another 16% had received part of their award and over a third had been paid no compensation at all. The most common reason for non-payment was business insolvency.

The government is considering giving judges the power to require employers to pay deposits in advance of employment tribunals.

Employment Relations Minister Jo Swinson said:

‘We are determined to clamp down on businesses who fail to pay out. Far too many cases are not being resolved leaving people out of pocket. Taking an employer to tribunal is a stressful enough process without having to face the possibility of not getting what you are entitled to if you win your case.’

‘Whilst this is primarily about justice for individuals, it is also important that there is a level playing field for the majority of honest employers who follow the rules. Rogue employers should not be allowed to simply get away with not paying.’

‘We will look closely at how we can tighten things up to make sure that people get what they are owed. This includes potentially making changes to the employment tribunal rules to give judges the power to demand deposits from businesses who they think might not pay up.’

‘We are also considering fixed penalty notices for late payment and naming and shaming employers who fail to pay out. And we need to make sure that people are aware how they can take enforcement action if they are not paid what they are due.’

Internet link: Press release

HMRC new approach to Business Records Checks

HMRC have announced that they are changing their Business Record Check (BRC) activity to ensure ‘it better targets help to those who are likely to have inadequate records’.

According to the HMRC press release:

‘Customers whose records were not adequate on first inspection, and who received follow up visits, all improved their record-keeping standard. HMRC have not had to charge any penalties.’

‘In the latest phase of BRC, many of the customers contacted by HMRC have been keeping records correctly. So HMRC wants to explore how to better target this activity.’

‘From 4 November 2013, HMRC’s BRC activity in the Edinburgh, Glasgow, Leeds, Bradford and Stockport areas will explore new ways of using the checks. As part of this, HMRC will evaluate new risk processes and ensure new approaches are cost effective and fit with its wider compliance activity.

HMRC will also work with tax agents’ representatives to review the benchmarks of what good record-keeping should be. Many tax agents already do much to improve their clients’ record-keeping and HMRC wants to work with them to improve standards.’

‘For customers outside the development areas HMRC will continue with existing BRCs until they are completed.’

If you are contacted by HMRC regarding your records please do get in touch.

Internet link: BRC

Autumn Statement

The government has announced that the Autumn Statement will now take place on 5 December 2013.

We will update you on pertinent announcements.

Internet link: News

Labour Market Statistics

The Office for National Statistics has announced that:

  • The employment rate for those aged from 16 to 64 for July to September 2013 was 71.8%, up 0.3% from April to June 2013. There were 29.95 million people in employment aged 16 and over, up 177,000 from April to June 2013.
  • The unemployment rate for July to September 2013 was 7.6% of the economically active population, down 0.2% from April to June 2013. There were 2.47 million unemployed people, down 48,000 from April to June 2013.
  • Between July to September 2012 and July to September 2013 total pay rose by 0.7% and regular pay rose by 0.8%.

Neil Carberry, CBI Director of Employment and Skills, said:

‘Further signs of recovery can clearly be seen in these jobs figures. Unemployment is falling faster and businesses have taken on 124,000 more employees in full-time work.’

‘It is really pleasing to see more regions benefiting from job creation.’

‘It’s clear that pay restraint is continuing to underpin employment growth. We expect wages to pick up next year, but sustained growth must come first to protect jobs.’

Internet links: ONS CBI press release

HMRC reveal deliberate defaulters

HMRC publishes details of deliberate tax defaulters, those people who have received penalties either for:

  • deliberate errors in their tax returns or
  • deliberately failing to comply with their tax obligations.

To view the latest list please visit the HMRC website link below and look for the latest list.

Internet link: HMRC defaulters

Parties for employees

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.

Internet link: HMRC guidance

Pension scheme charges consultation

Government consultation proposes to cap annual charges that are applied to pension schemes at between 0.75% and 1.0% a year.

While the average charge on new pension schemes is around 0.51% the Office of Fair Trading estimates that there are over 186,000 pension pots with £2.65bn assets that are subject to an annual charge of above 1%.

The government is also consulting on measures to increase transparency in the pensions sector and make it easier for employers to compare pension schemes.

Minister for Pensions Steve Webb said:

‘The government believes that enough is enough on charges. People need to know they are getting value for money when they save into a pension and not being ripped off by excessive charges. We are consulting on a cap on pension charges. A range of options will be on the table including an outright ban on all charges above 0.75% per year.’

With Pensions Auto Enrolment being rolled out to all employers please do get in touch if we can help you to get to grips with the obligations.

Internet links: Press release consultation