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Newsletter – September 2020

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Enews – September 2020

In this month’s Enews we consider changes to the plastic bag tax, pension scams and the latest advisory fuel rates. With the latest figures on the success of the Eat Out to Help Out scheme, self assessment deadlines, the latest guidance for employers, the launch of the Kickstart Scheme and the Self Employed Income Support Scheme Grants there is lots to consider.

Plastic bag tax charge to be doubled and extended to all retailers

The fee for plastic shopping bags in England will be doubled to 10 pence and extended to all shops from April 2021.

Small retailers, those employing 250 people or fewer, will no longer be exempt, the Department for Environment, Food and Rural Affairs (Defra) said.

According to Defra, since the charge was first introduced in 2015 it has successfully prevented billions of plastic bags being sold and ending up in the ocean and environment.

Government data shows the current levy, which stands at 5 pence per bag and applies to any retailer employing 250 or more people, has led to a 95% cut in plastic bag sales in major supermarkets since 2015.

Commenting on the announcement, Environment Secretary George Eustice, said:

‘We have all seen the devastating impact plastic bags have on the oceans and on precious marine wildlife, which is why we are taking bold and ambitious action to tackle this issue head on.

‘The UK is already a world-leader in this global effort, and our carrier bag charge has been hugely successful in taking billions of harmful plastic bags out of circulation. But we want to go further by extending this to all retailers so we can continue to cut unnecessary waste and build back greener.’

Internet link: GOV.UK

More than £30 million lost to pension scams

Over £30 million has been lost to pension scams since 2017, according to the Financial Conduct Authority (FCA) and The Pensions Regulator (TPR).

A total of £30,857,329 in pension savings has been lost to scammers since 2017, data published by the FCA and the TPR revealed. Reported losses ranged from under £1,000 to as much as £500,000. The average victim was a man in his 50s, the FCA and the TPR found.

65% of pension savers said they felt confident they could spot a scam. However, four in ten would put themselves at risk unknowingly by engaging with a common scam tactic, such as being told it’s a time-sensitive offer.

The FCA and the TPR have advised savers not to be pressured into making any decisions about their pensions, and to reject unexpected pension offers, whether these are made online, via social media or over the phone.

Mark Steward, Executive Director of Enforcement and Market Oversight at the FCA, said:

‘During these uncertain times, it is more important than ever to defend your lifetime savings from scammers.

‘Fraudsters will seek out every opportunity to exploit innocent people, no matter how much or how little you have saved.’

Internet link: FCA news

Advisory fuel rates for company cars

New company car advisory fuel rates have been published which take effect from 1 September 2020. The rates only apply to employees using a company car. The guidance states:

‘You can use the previous rates for up to one month from the date the new rates apply.’

The advisory fuel rates for journeys undertaken on or after 1 September 2020 are:

Engine size Petrol
1400cc or less 10p
1401cc – 2000cc 12p
Over 2000cc 17p
Engine size LPG
1400cc or less 7p
1401cc – 2000cc 8p
Over 2000cc 12p
Engine size Diesel
1600cc or less 8p
1601cc – 2000cc 10p
Over 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

Eat Out to Help Out – over 64 million meals

The government has announced that more than 64 million meals were enjoyed by diners across the country during the government’s Eat Out to Help Out discount scheme. The scheme closed on 31 August 2020.

Government figures show that restaurants had claimed for more than 64 million discounted meals as Eat Out to Help Out entered its fourth week.

This continues the upward trend in the scheme’s popularity, with 10.5 million meals claimed for in the first week, growing to a total of 35 million meals in the second.

The upward trend in meals claimed for shows that millions continued to flock to eat out to support 1.8 million jobs in the hospitality sector, which has been hit hard by coronavirus (COVID-19). The government has confirmed that 87,000 claims have been made by restaurants taking part in the scheme.

Data from OpenTable shows that during Eat Out to Help Out’s third week the number of customers at UK restaurants was 61% higher than the same days last year on average for Monday to Wednesday. The average level across Monday to Wednesday in the first and second week were 12% and 41% respectively. The data also shows that the number of customers at UK restaurants was up 17% compared to the same week in 2019.

Chancellor of the Exchequer Rishi Sunak said:

‘Today’s figures continue to show that Brits are backing hospitality – with more than 64 million meals discounted so far, that’s equivalent to nearly every person in the country dining out to protect jobs.

‘This scheme has reminded us how much we love to dine out, and in doing so, how this is helping to protect the jobs of nearly two million people who work in hospitality.’

Internet links: GOV.UK news HMRC guidance

Self assessment deadlines

Two self assessment deadlines are approaching:

  • 5th October 2020

For those individuals who have not previously completed a tax return but need to report a liability for 2019/20.

  • 31st October 2020

For those individuals who have previously submitted ‘paper’ self assessment tax returns the deadline for the 2019/20 return is 31 October 2020. Returns submitted after that date must be submitted electronically or they will incur a minimum penalty of £100. The penalty applies even when there is no tax to pay or the tax is paid on time.

If you would like any help with the completion of your self assessment tax return, please do get in touch.

Internet link: HMRC deadlines

HMRC latest guidance for employers

HMRC has published the latest edition of the Employer Bulletin. This guidance for employers, and their agents, includes articles on:

  • Coronavirus Job Retention Scheme and what employers need to do from August onwards
  • making sure you are paying the correct workplace pension contributions
  • new laws to ensure furloughed employees receive full statutory redundancy payments
  • the deadline to report the disguised remuneration loan charge – 30 September 2020
  • COVID-19 – are you due a repayment?
  • off-payroll working rules (IR35)
  • applications for the £50 million customs grant scheme
  • the delay to the VAT reverse charge on building and construction services
  • the end of the VAT payment deferrals period
  • Student Loan repayments
  • Finance Act 2020 changes to company car tax.

Please contact us for help with employment matters.

Internet link: Employer Bulletin

Kickstart Scheme opens for applications

On 2 September 2020, the government’s £2 billion Kickstart Scheme opened for employer applications.

The scheme is part of the Plan for Jobs announced during Chancellor Rishi Sunak’s July Summer Economic Update.

The Kickstart Scheme aims to create work placements for young people who are at risk of becoming unemployed for the long-term. Businesses can join the scheme, with the government paying employers £1,500 to help set up support and training. Funding is available following a successful application process. Applications must be for a minimum of 30 job placements.

Businesses that are unable to offer this many job placements can partner with other organisations to reach the minimum number.

Selected out-of-work young people will be offered six month work placements for at least 25 hours a week to help them gain experience, skills and confidence. The scheme is designed to be a stepping stone to further employment.

Employers will receive funding for 100% of the relevant National Minimum Wage (NMW) for 25 hours a week, plus associated employer national insurance contributions (NICs) and employer minimum auto-enrolment pension contributions.

Chancellor Sunak said:

‘This isn’t just about kickstarting our country’s economy – it is an opportunity to kickstart the careers of thousands of young people who could otherwise be left behind as a result of the pandemic.

‘The scheme will open the door to a brighter future for a new generation and ensure the UK bounces back stronger as a country.’

Internet link: GOV.UK

Self Employment Income Support Scheme Grants

HMRC are inviting those individuals that are self employed or a member of a partnership and have been adversely affected by coronavirus to claim a second grant under the Self Employed Income Support Grant.

Applications for the first grant under the scheme closed on 13 July 2020.

The second and final taxable grant is worth 70% of an individual’s average monthly trading profits, paid out in a single instalment covering three months’ worth of profits, and capped at £6,570 in total.

Applications for the second and final grant are now open. The grant is only available to businesses that have been adversely affected on or after 14 July 2020. Taxpayers must make a claim for the second grant on or before 19 October 2020.

HMRC will work out businesses’ eligibility for the second grant in the same way as the first grant.

Taxpayers are able to make a claim for the second grant if they are eligible, even if they did not make a claim for the first grant.

HMRC have confirmed that taxpayers can:

  • continue to work
  • start a new trade or take on other employment including voluntary work and duties as a military reservist.

The grant does not need to be repaid if a taxpayer is eligible, but will be subject to both income tax and self employed National Insurance.

Internet link: GOV.UK SEISS guidance

Newsletter – May 2015

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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

Latest labour market statistics

Warning over pension scams

TPR guidance for small employers with no ‘staff’

Lack of awareness of VAT rules

P11D forms – don’t get them wrong

VAT fuel scale charges

VAT recovery on car-derived vans and combi vans

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 scamsmart.fca.org.uk.

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 – August 2014

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eNews – August 2014

In this month’s enews we report on a number of issues including HMRC’s latest disclosure opportunity, warnings of incorrect PAYE overpayment notifications and the introduction of late submission penalties and guidance on pension scams. We also advise on HMRC guidance on exceptions to the VAT return electronic filing rules and the Pensions Regulator issues first report on auto enrolment penalties.

Please do get in touch if you would like more detail on any of the articles.

eNEWS quicklinks

Guidance on changes to VAT filing rules

Pensions Regulator uses formal powers over Auto Enrolment

Pension scams

HMRC latest disclosure opportunity

HMRC warn of incorrect RTI letters

HMRC to issue penalties for late submission of PAYE returns

Guidance on changes to VAT filing rules

The majority of businesses have to file their VAT returns online. HMRC have issued guidance on changes to VAT rules which introduce additional exemptions to the requirement to file VAT returns online. The changes, which came into effect at the beginning of July 2014, allow business owners that satisfy HMRC that it is ‘not reasonably practicable’ for them to use the online system to submit ‘paper’ VAT returns.

HMRC will also be able to approve telephone filing as an alternative method of electronic filing in certain circumstances.

If you would like any advice on VAT issues please do get in touch.

Internet link: HMRC VAT Brief

Pensions Regulator uses formal powers over Auto Enrolment

The Pensions Regulator (TPR) has issued the first quarterly bulletin which details how many times it has needed to use its formal powers to ensure employers comply with their automatic enrolment duties.

The first of the new quarterly bulletins shows the regulator had used its powers on 23 occasions up until the end of June this year. The powers listed include the ability to carry out inspections and to issue statutory notices including fixed penalty and escalating fines.

Executive director of automatic enrolment Charles Counsell said:

‘Employers and the pensions industry are understandably interested to know how and when we use our powers. To date the vast majority of employers are complying with their new workplace pension duties without the regulator needing to use our enforcement powers.’

‘I believe this is a testament to the success of our proportionate, risk-based approach to compliance and enforcement. We target our resources where they will maximise compliance and work with employers to help them comply with their duties.’

‘We have provided the tools and assistance that large and medium employers need to ensure millions of workers didn’t miss out on the pension contributions they are entitled to. On a small number of occasions, when our intervention has not resulted in the required outcome, we have used our powers to help to ensure employers comply with their duties.’

For general guidance on employers auto enrolment duties see TPR website. If you would like specific guidance, help or advice on how to deal with your auto enrolment obligations please do get in touch.

Internet link: Bulletin

Pension scams

HMRC and the Pensions Regulator (TPR) are publicising the availability of revised leaflets which warn people of the consequences of pension liberation scams.

HMRC are advising that individuals with pension savings continue to be targeted by unscrupulous companies encouraging them to access their pension savings early. Options are given for personal loans, cash incentives and one-off pension investments to encourage people to invest in these pension scams. Pension savers involved in these pension liberation scams face significant tax consequences.

HMRC has worked closely with TPR on publishing a revised set of leaflets highlighting the serious downsides of pension scams. The leaflets provide guidance on what trustees and scheme members can do to reduce the risk of becoming involved in these scams, and the tax impact of releasing pension funds early using these types of arrangements.

Internet links: HMRC news TPR website

HMRC latest disclosure opportunity

HMRC have announced the details of their latest disclosure opportunity which is expected to give approximately 16,000 tax avoidance scheme users the opportunity to pay the tax they owe.

The contractor loan scheme used non-UK employers to pay untaxed income or a loan instead of paying part of an employees salary.

HMRC are inviting those who have used the scheme to bring their affairs up to date using the contractor loans settlement opportunity which will allow taxpayers to settle their liability in the best possible terms. This opportunity is for the tax years up to 5 April 2011 and is open until 9 January 2015.

If they do, they will pay the tax and interest due on the sums they received as loans under the scheme. HMRC are warning that if participants continue to challenge HMRC in the courts, they risk having to pay additional tax charges and penalties – as well as the costs of litigation if they lose.

Jennie Granger, HMRC Director General for Enforcement and Compliance, said:

‘Many people regret ever getting involved with complex aggressive tax avoidance schemes and HMRC is providing an opportunity for contractors to come forward and straighten out their tax affairs.’

‘This is an important opportunity and we are working hard to encourage users to withdraw from such schemes. We also want to ensure they’ve understood our position. They can choose to continue to litigate for a better outcome but they risk a worse result. HMRC has a strong track record of winning tax avoidance cases in court, with around 80% of decisions in our favour. The costs for users are high, potentially resulting in penalties, charges and significant legal costs for scheme users.’

Please get in touch if you have any concerns in this area.

Internet link: Contractor loan disclosure opportunity

HMRC warn of incorrect RTI letters

HMRC have warned that incorrect RTI letters have been issued. The full statement reads:

‘We are aware that a batch of RTI 201 letters has been sent to employers and agents in error, containing incorrect information about overpayments. Any employer or agent receiving one of these letters in August should please ignore it. Those wishing to check their tax position can do so on the Business Tax Dashboard. We are very sorry for any inconvenience caused.’

If you would like any help with payroll issues please do get in touch.

Internet link: HMRC What’s new

HMRC to issue penalties for late submission of PAYE returns

In the latest Employer Bulletin HMRC are warning that employers’ who fail to submit their PAYE submissions, Full Payment Submission (FPS) or where appropriate Employer Payment Summary (EPS) on time will face penalties. The penalties are being introduced from October 2014.

Penalty notifications will be issued on a quarterly basis.

Please do get in touch for advice on PAYE matters.

Internet link: Employer Bulletin