Newsletter – May 2015

Posted on May 8, 2015 by Henry Cooper

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 – April 2014

Posted on April 25, 2014 by Henry Cooper

In this month’s enews we report on pensions announcements and other issues pertinent to employers with many deadlines approaching.

Please contact us if you would like any further information.

eNEWS quicklinks
HMRC guidance on new pension flexibility	Employers no longer able to reclaim SSP
Disclosure facility for those with undisclosed second incomes	More guidance on Class 3A NIC
More HMRC guidance on the Employment Allowance	Tax-Free Childcare
Increase in NMW rates	Advisory fuel rates for company cars and fuel benefit charge
P11D deadline approaching

HMRC guidance on new pension flexibility

Following the Budget announcements regarding pension flexibility HMRC have now issued some guidance for those individuals who may wish to review their pension options.

New rules are being introduced to ensure that people do not lose their right to a tax-free lump sum if they would rather use the new flexibility this year or next, instead of buying a lifetime annuity.

Internet link: Pensions flexibility

Employers no longer able to reclaim SSP

The Percentage Threshold Scheme (PTS), which allows employers to reclaim Statutory Sick Pay (SSP) in certain circumstances, is abolished from 6 April 2014.

Under PTS employers have been able to reclaim SSP where the SSP paid is more than 13% of the Class 1 NIC due for the month. Employers are not entitled to recover any of the SSP paid to their employees unless they qualify for the reimbursement scheme.

The following example explains how the scheme worked for a tax month:

SSP paid	=	£630.00
Gross NI £3,704.29 x 13%	=	£481.56
SSP recoverable: (£630 – £481.56)	=	£148.44

From 6 April 2014 employers are unable to recover SSP however they will continue to be able to recover unclaimed SSP for previous years until 5 April 2016. Do contact us if you think this may apply to your business.

The government has announced that the current PTS funding will be moved into a new scheme to help employees who have been incapacitated for four weeks or more get back to work as part of the government’s Health Work and Wellbeing Initiative.

Internet link: Employer bulletin

Disclosure facility for those with undisclosed second incomes

The Second Incomes Campaign is an opportunity open to individuals in employment who have an additional untaxed source of income.

The new facility allows those with untaxed income to get up to date with their tax affairs in a simple, straightforward way and take advantage of the best possible terms.

If you would like any advice on this area please do get in touch.

Internet links: Second incomes campaign Guide to disclosure

More guidance on Class 3A NIC

Further guidance has been issued on Class 3A National insurance contributions (NIC).

In the autumn of 2013 the Government announced plans to introduce a scheme to allow pensioners to top up their Additional State Pension by paying a new class of voluntary National Insurance contribution, to be known as Class 3A.

‘The scheme will open in October 2015 and will be available to all pensioners who reach State Pension age before the introduction of the new State Pension in April 2016. The scheme is expected to run for 18 months.’

‘Class 3A will give pensioners an option to top up their pension by up to £25 a week in a way that will protect them from inflation and offer protection to surviving spouses. In particular, it could help women, and those who have been self-employed, who tend to have low additional State Pension entitlement.’

Internet link: Publication

More HMRC guidance on the Employment Allowance

The Employment Allowance of up to £2,000 is available to most employers from 6 April 2014. Employers can reduce the amount of National Insurance contributions (NICs) they pay for their employees by up to £2,000. This is called the ‘Employment Allowance’.

Employers generally won’t have to pay any employer National Insurance contributions at all if they usually pay less than £2,000 a year.

HMRC has issued more guidance on the practicalities of claiming the allowance which can be found by visiting the link below.

For help with payroll matters please do contact us.

Internet links: Employment allowance detail Employment allowance key facts

Tax-free childcare

Details of the new Tax-Free Childcare scheme which is to be launched in autumn 2015 have been announced.

The scheme will be worth a maximum of £2,000 per child per year. The maximum amount due is calculated on 20% of the costs of childcare (up to a total of childcare costs of £10,000 per child per year).

The scheme will be launched in autumn 2015. All children under 12 within the first year of the scheme will be eligible. To qualify for Tax-Free Childcare all parents in the household must:

meet a minimum income level based on working eight hours per week at the National Minimum Wage (around £50 a week at current rates)
each earn less than £150,000 a year, and
not already be receiving support through Tax Credits or Universal Credit.

Self-employed parents will be able to get support with childcare costs in the Tax-Free Childcare scheme, unlike the current employer supported childcare scheme. To support newly self-employed parents, the Government is introducing a ‘start-up’ period. During this period a newly self-employed parent will not have to earn the minimum income level.

The current system of employer supported childcare will continue to be available for current members if they wish to remain in it or they can switch to the new scheme. Employer supported childcare will continue to be open to new joiners until the new scheme is available.

It is proposed that parents register with the Government and open an online account. The scheme will be delivered by HMRC in partnership with National Savings and Investments, the scheme’s account provider. The Government will then ‘top up’ payments into this account at a rate of 20p for every 80p that families pay in.

Internet link: News

Increase in NMW rates

The Government has approved a rise in the National Minimum Wage rates which will come into effect on 1 October 2014:

a 19p (3%) increase in the adult rate (from £6.31 to £6.50 per hour)
a 10p (2%) increase in the rate for 18 to 20 year olds (from £5.03 to £5.13 per hour)
a 7p (2%) increase in the rate for 16 to 17 year olds (from £3.72 to £3.79 per hour)
a 5p (2%) increase in the rate for apprentices (from £2.68 to £2.73 per hour.

The rise will take effect in October 2014, as Business Secretary Vince Cable has accepted in full the independent Low Pay Commission’s recommendations for 2014, including plans for bigger increases in future than in recent years.

The Low Pay Commission (LPC) has said the rise, the first real terms cash increase since 2008, is manageable for employers and will support full employment.

Business Secretary Vince Cable said:

‘The recommendations I have accepted today (12 March 2014) mean that low paid workers will enjoy the biggest cash increase in their take home pay since 2008. This will benefit over 1 million workers on National Minimum Wage and marks the start of a welcome new phase in minimum wage policy.’

Meanwhile HMRC have revealed some of the excuses given for not paying the NMW.

Internet links: Press release HMRC NMW excuses

Advisory fuel rates for company cars and fuel benefit charge

Where private fuel is provided by the employer for a company car then a separate benefit is assessable on the employee. This benefit charge is calculated by applying the same percentage figure used to calculate the company car benefit to a fixed figure which for 2014/15 is set at £21,700. The percentage is linked to the car’s CO2 emission figures.

Now is a good time to consider whether this benefit is value for money for both the employee and employer.

The alternative is to reimburse the employee for business miles using the company car advisory fuel rates. The current rates are:

Engine size	Petrol
1400cc or less	14p
1401cc – 2000cc	16p
Over 2000cc	24p

Engine size	LPG
1400cc or less	9p
1401cc – 2000cc	11p
Over 2000cc	17p

Engine size	Diesel
1600cc or less	12p
1601cc – 2000cc	14p
Over 2000cc	17p

Other points to be aware of about the advisory fuel rates:

Employers do not need a dispensation to use these rates.
Employees driving employer provided cars are not entitled to use these rates to claim tax relief if employers reimburse them at lower rates. Such claims should be based on the actual costs incurred.
The advisory rates are not binding where an employer can demonstrate that the cost of business travel in employer provided cars is higher than the guideline mileage rates. The higher cost would need to be agreed with HMRC under a dispensation.

If you would like to discuss your car policy, please contact us.

Internet link: HMRC advisory fuel rates

P11d deadline approaching

The forms P11D, and where appropriate P9D, which report details of expenses and benefits provided to employees and directors for the year ended 5 April 2014, are due for submission to HMRC by 6 July 2014. The process of gathering the necessary information can take some time, so it is important that this process is not left to the last minute.

HMRC have updated their expenses and benefits toolkit for 2013/14 and record keeping for 2014/15. The toolkit consists of a checklist which may be used by advisers or employers to check they are completing the forms P11D correctly.

If you would like any help with the completion of the forms or the calculation of the associated Class 1A National Insurance liability please get in touch.

Internet links: http://www.hmrc.gov.uk/payerti/exb/forms.htm Toolkit

Newsletter – August 2011

Posted on August 31, 2011 by Henry Cooper

In this month’s enews we report on HMRC’s announcement of a Civil Disorder Helpline. Please contact us if you would like any further details on any of the issues covered.

eNEWS quicklinks
HMRC Civil Disorder helpline	Pensions online interactive tools
‘Ghost’ plumbers arrested in tax raids	Autoclenz status case
Closure of HMRC’s old bank accounts	Data Protection Breach
HMRC update advice on delayed statements	Enterprise Zones

HMRC Civil Disorder helpline

HMRC have announced a new helpline – 0845 366 1207- to assist businesses and individuals adversely affected by the recent civil disorder.

According to the press release:

‘The dedicated Civil Disorder helpline is available to provide comprehensive advice and deal sympathetically with problems currently faced by businesses and individuals. In particular, HMRC will:

agree payment schedules with those who are unable to pay their tax bills due to short-term financial difficulties; and
discuss practical solutions where businesses and individuals cannot meet their other obligations to HMRC – for instance, their records have been lost or destroyed in the disturbances.’

‘In these circumstances, and whenever possible, HMRC will review any penalties imposed and withhold additional surcharges that would normally be triggered by missed deadlines.’

‘In short, if you want to talk about how the disorder has affected you in relation to the tax system (including tax credits), please contact HMRC – we are here to help. There are a range of existing reliefs available and HMRC’s trained advisors will be happy to help.’

Please do get in touch if you would like further advice.

Internet link: News release

Pensions online interactive tools

The Pensions Regulator has launched an online tool designed to help smaller businesses get to grips with their employer duties under the new laws, which start in 2012. The tools cover issues such as:

Find out your staging date (this is the date from which these rules will apply to your business)
Your employer duties
How to automatically enrol your staff
Your minimum employer contributions

Internet link: The Pensions Regulator website

‘Ghost’ plumbers arrested in tax raids

HMRC have announced that five plumbers have been arrested and approximately 600 are under civil investigation by HMRC for failing to pay the right amount of tax.

The arrests and investigations have taken place as part of a campaign targeting plumbers which invited them to put their tax affairs in order, referred to as the Plumbers Tax Safe Plan (PTSP). Under the PTSP those coming forward to make full disclosures of unpaid liabilities face reduced penalties. They have until 31 August 2011 to arrange for payment. According to the HMRC press release they believe that some of those involved owe up to £150,000.

More raids are expected to take place over the coming weeks across the UK, including Yorkshire, Kent, Cambridgeshire, Tyne & Wear, Midlands and South Wales.

John Pointing, Assistant Director of HMRC Criminal Investigation, said:

‘These raids and arrests of ‘ghosts’ – people who have not declared income from the work they do – are the culmination of months of work by HMRC.’

‘We provided a chance for those we have arrested, and the 600 we are investigating, to come forward voluntarily and put things right. These arrests send a clear message that HMRC will take action against those who choose not to come forward and pay the tax they owe.’

Mike Wells, Director HMRC Risk & Intelligence Service, said:

‘These arrests are just the start. HMRC is considering hundreds of further cases for criminal investigation in the plumbing and medical professions. Some people may have thought we were bluffing when we said we have information that we will use to prosecute tax evasion.’

Internet link: News release

Autoclenz status case

A Supreme Court judgement has found that workers engaged as car valeters by Autoclenz were in fact employees and not self-employed as Autoclenz had contended.

The case was brought by a group of car valeters engaged by Autoclenz in an attempt to show that they were employees. Autoclenz claimed that a substitution clause in the workers contracts, which obliged the individuals to provide a substitute to perform the cleaning services when they themselves were unable to, meant that the individuals were self-employed.

The Supreme Court confirmed that these clauses were not a true reflection of the reality of the situation and that in fact no genuine right of substitution existed. They therefore concluded that the individuals were working under contracts of employment.

This case could have implications for other employment status cases. We will keep you informed of developments.

Internet link: Supreme Court ruling

Closure of HMRC’s old bank accounts

Business Link is reminding businesses that HMRC Bank of England accounts closed with effect from 9 August 2011. They are also warning that where businesses use these account details the payments will no longer be accepted. This may result in interest charges if the payment is not received by HMRC by the agreed payment date.

Businesses should use the correct HMRC bank account details, to make electronic payments by BACS Direct Credit, internet/telephone banking or CHAPS.

Where paying HMRC by Bank Giro please ensure that the payslip shows the correct NatWest account details. Payslips containing HMRC’s old Bank of England account details should no longer be used as the payment will be rejected.

Internet link: Business Link guidance

Data Protection Breach

The Information Commissioner’s Office (ICO) has ruled that cosmetics retailer Lush breached the Data Protection Act after the security of its website was compromised. The breach, which happened between October 2010 and January 2011, meant that hackers could access the payment details of 5,000 customers who had previously used the company’s website.

Lush has signed an undertaking to ensure that future customer credit card data will be processed in accordance with the Payment Card Industry Data Security Standard.

The ICO is warning online retailers that if they do not adopt this standard, or provide equivalent protection when processing customers’ credit card details, they risk enforcement action from the ICO.

Lush discovered the security lapse in January 2011 after receiving complaints from 95 customers who had been the victim of card fraud. On investigating, Lush discovered that hackers had managed to access their customers’ payment details.

The ICO’s investigation found that Lush’s systems were not sufficient to prevent a determined attack on their website. The business’s procedures for recording suspicious activity on their website were also insufficient, causing a delay in identifying the security breach.

Acting Head of Enforcement, Sally Anne Poole said:

‘With over 31 million people having shopped online last year, retailers must recognise the value of the information they hold and that their websites are a potential target for criminals.’

‘Lush took some steps to protect their customers’ data but failed to do regular security checks and did not fully meet industry standards relating to card payment security. Had they done this, it may have prevented the fraud taking place and could have saved the victims a great deal of worry and time invested in claiming their money back. This breach should serve as a warning to all retailers that online security must be taken seriously and that the Payment Card Industry Data Security Standard or an equivalent must be followed at all times.’

Internet link: ICO press release

HMRC update advice on delayed statements

HMRC have updated their guidance to those taxpayers who did not receive their Self Assessment statements on time. As previously advised, HMRC have had more Self Assessment statements than usual to issue this year. Normally these are all issued in July, but this year some are being issued in August. However, many taxpayers wait for the statement to confirm what they need to pay. More importantly, if HMRC have asked taxpayers to make a second payment on account in July, they normally have to pay this by 31 July.

However, due to the delays in issuing some statements HMRC have advised:

‘You don’t need to worry about this. If HMRC have asked you to make a second payment on account, you normally should have paid this by 31 July.’

‘You usually have to pay interest if you don’t pay on time. If you receive your statement in August, you should still pay the tax due as soon as you can. However you’ll only be asked to pay interest on the tax due on the second payment on account if you still haven’t paid it by 27 September.’

HMRC are also reminding taxpayers that if they use their online service, they can check their statement online.

If you have any concerns regarding payment please do get in touch.

Internet link: HMRC update

Enterprise Zones

The government has announced 11 new Enterprise Zones as part of the government’s ‘Plan for Growth’.

The government had previously announced 11 Enterprise Zones in some of the country’s largest cities, including Manchester, Birmingham, Merseyside and Newcastle and had invited applications for 10 more in other areas.

According to the press release ‘the strength of the applications from Local Enterprise Partnerships was such that Government has agreed to increase this invitation to 11.’

The second wave of Enterprise Zones will be located in:

Humber Estuary Renewable Energy Super Cluster

Daresbury Science Campus in Warrington

Newquay AeroHub in Cornwall

The Solent Enterprise Zone at Daedalus Airfield in Gosport

MIRA Technology Park in Hinckley Leicestershire

Rotherwas Enterprise Zone in Hereford

Discovery Park in Sandwich, Kent and Enterprise West Essex in Harlow

Science Vale UK in Oxfordshire

Northampton Waterside

Alconbury Airfield, near Huntingdon in Cambridgeshire, and

Great Yarmouth in Norfolk, and Lowestoft in Suffolk.

The Chancellor of the Exchequer George Osborne, said:

‘It is vital that we create balanced economic growth across the country. It is time for us to help every part of the country to grow and realise its potential.’

‘Enterprise Zones are a critical part of our Plan for Growth and will support economic development and create over 30,000 new jobs by 2015. The zones will benefit from over £150 million in tax breaks over 4 years, new superfast broadband, lower levels of planning control and the potential to use enhanced capital allowances.’

Internet link: Press release

Newsletter – June 2011

Posted on June 30, 2011 by Henry Cooper

In this month’s enews we report on HMRC’s plans to extend their ‘tax cheats’ campaigns.

Please browse through the articles using the links below and contact us if any issues or questions arise.

eNEWS quicklinks
HMRC extend ‘tax cheats’ campaigns	Another email scam warning from HMRC
Workplace pensions reform	Consultation on residency
The Bribery Act	Tax credits renewal deadline
Changes to the law to protect Patent and Design rights	P11D deadline looming

HMRC extend ‘tax cheats’ campaigns

HMRC have announced that they will be launching new campaigns over the next year targeting VAT defaulters, private tutors and e-marketplaces.

HMRC will use more IT, such as ‘web robot’ software, to search the internet and find targeted information about specified people and companies. Using the software, HMRC feel that they can pinpoint more accurately people who have failed to pay the right tax. The software, used with HMRC’s Connect computer system, also helps find people who are trading without telling HMRC.

The Connect computer system alerts HMRC to previously invisible tax evasion by matching a vast amount of HMRC and third-party data. It can identify previously hidden relationships, uncovering anomalies between such elements as bank interest, property income and lifestyle indicators before homing in on unexplained inconsistencies.

HMRC announced last month that a campaign targeting VAT rule-breakers trading above the £73,000 turnover threshold but who have not registered for VAT will be launched in the summer.

Other campaigns to be launched in 2011/12 will focus on:

those who provide private tuition and coaching
e-marketplaces, which buy and sell goods as a trade or business
trades, which will build on HMRC’s plumbers’ campaign and give an opportunity to another group of ‘tradespeople’ to declare unpaid tax.

Mike Wells, HMRC’s Director of Risk and Intelligence, said:

‘We want to make sure HMRC listens to as many informed views as possible for our future campaigns. We want the views and experience of people and organisations outside the department to play a fuller part in the campaigns that we design for customers.’

‘By being open about our areas of interest for the coming year we hope to maximise that exchange of information and ensure we reduce the tax gap and help customers pay what they owe.’

‘We will use the information we gather to pursue people who choose not to use the opportunities we provide for them to put their affairs in order on the best possible terms. It will be more expensive if we come and find people, so I urge them to come forward and disclose voluntarily.’

Internet link: News release

Another email scam warning from HMRC

HMRC are once again alerting taxpayers to a surge of fake ‘phishing’ emails sent out by fraudsters in the run-up to the tax credits renewal deadline.

The email informs the recipient they are due a tax rebate and provides a click-through link to a cloned replica of the HMRC website. The recipient is asked to provide their credit or debit card details. Fraudsters then try to take money from the account using the details provided.

Since the beginning of April 2011, when the first tax credits renewals forms were sent out to claimants, more than 46,000 phishing emails have been reported. During the same period of time HMRC helped shut down more than 150 scam websites.

Joan Wood, Director of HMRC Online and Digital, said:

‘We currently only ever contact customers who are due a tax refund in writing by post. We don’t use telephone calls, emails or external companies in these circumstances. If anyone receives an email claiming to be from HMRC, please send it to phishing@hmrc.gsi.gov.uk before deleting it permanently.’

HMRC strongly advises taxpayers to:

check the advice published at http://www.hmrc.gov.uk/security/examples.htm to see if the email you have received is listed
forward suspicious emails to HMRC at phishing@hmrc.gsi.gov.uk and then delete it from your computer/mail account
do not click on websites, links contained in suspicious emails or open attachments.

Internet links: News Release www.hmrc.gov.uk/security/index.htm

Workplace pensions reform

The government has introduced measures aimed at encouraging greater private saving which includes workplace pension reforms. New legal obligations will require employers to automatically enrol their eligible jobholders into a qualifying pension scheme.

A new workplace pension scheme called NEST (National Employment Savings Trust) will be one of the qualifying schemes and will be open to any employer who wants to use it to meet their obligations.

The initial roll out of the scheme will be October 2012 but this will impact on employers with 120,000 employees or more. For those with a more modest workforce the start date varies; for example, those with less than 500 employees the date is 1 January 2014 and for those with less than 50 employees the earliest start date is 1 March 2014.

Employees eligible for automatic enrolment will be:

those who are not already active members of a qualifying scheme
are aged at least 22 years and below the State Pension age, and
earn over £7,475 gross a year.

The qualifying scheme may be the existing employer pension scheme if it meets certain conditions or if an employer does not have a qualifying scheme, they will have to set one up or use a NEST pension scheme.

Minimum contributions levels for qualifying schemes are as follows:

Minimum Contribution	Employee Pays	Tax Relief	Minimum Employer Contribution
8%	4%	1%	3%

Employees will be able to opt out of the scheme if they so wish. However, for those employees within the scheme it is expected that the employer will have to contribute at least 3% of ‘qualifying’ earnings. These earnings are the employees’ basic salary plus commissions, bonuses and overtime between £5,035 and £33,540 a year (in 2006/07 terms but to be uprated). Pension contributions are to be phased in.

A great deal more information is starting to be released and can be viewed via The Pensions Regulator website.

Internet links: The Pensions Regulator website Basic employers guide

Consultation on residency

Over recent weeks, HMRC have issued numerous consultation documents totalling hundreds of pages.

One of these details how individuals will be judged to be resident or not resident in the UK for tax purposes.

The government proposes to introduce a statutory residence test (SRT) to take into account both the amount of time the individual spends in the UK and the other connections they have with the UK.

There are parts of the test where a distinction will be made between:

arrivers – defined as individuals who were not UK resident in all of the previous three tax years; and
leavers – defined as individuals who were resident in one or more of the previous three tax years.

The SRT will:

determine tax residence for individuals but not companies
apply for the purposes of income tax, capital gains tax and inheritance tax
not apply for non-tax purposes (including national insurance contributions), and
supersede all existing legislation, case law and guidance for tax years following its introduction.

The SRT will have three parts:

Part A contains conclusive non-residence factors that would be sufficient in themselves to make an individual not resident.
Part B contains conclusive residence factors that would be sufficient in themselves to make an individual resident.
Part C contains other connection factors and day counting rules which will only need to be considered by those whose residence status is not determined by Part A or Part B.

The above is part of a consultation process at present. HMRC intend to implement the measures from 6 April 2012.

We will keep you informed of developments but please do contact us if you have any concerns in the meantime.

Internet link: Press release

The Bribery Act

The Bribery Act 2010 comes into force on 1 July 2011. The new Act replaces, updates and extends the existing UK law against bribery and corruption. This important new legislation:

introduces a corporate offence of failure to prevent bribery by persons working on behalf of a business. A business can avoid conviction if it can show that it has adequate procedures in place to prevent bribery;
makes it a criminal offence to give, promise or offer a bribe and to request, agree to receive or accept a bribe either at home or abroad. The measures cover bribery of a foreign public official; and
increases the maximum penalty for bribery from seven to 10 years imprisonment, with an unlimited fine.

The introduction into law of the new corporate offence of failure of commercial organisations to prevent bribery is an important development that essentially requires all businesses to consider the requirements of the new Act. This new corporate offence is coupled with a defence where, if the business can show that it had ‘adequate procedures’ in place to prevent bribery, it can be protected from committing the new criminal offence.

All businesses should familiarise themselves with the statutory guidance and assess the risk of bribery occurring in the business. The extent of any further action will be dependent on the results of this risk assessment.

The Act also requires the government to produce guidance on what constitutes ‘adequate procedures’ and the Ministry of Justice has produced this. This can be found using the links below.

Internet links: Bribery Act 2010 guidance Quick start guide

Tax credits renewal deadline

Tax credits are state benefits which are generally available to lower income families. However, entitlement to the credits is significantly increased where individuals pay for childcare or suffer a drop in normal levels of income perhaps due to incurring trading losses or redundancy.

Individuals who have already claimed tax credits for 2010/11 have to finalise their provisional award, which would have originally been based on their 2009/10 income, and advise HMRC of any changes in their circumstances for 2011/12. This procedure is known as the renewals process. The deadline for the submission of tax credit renewals is generally 31 July 2011.

HMRC have been busily advertising the renewals process in the national press and on their website. Claimants need to be aware that the payment of tax credits will stop at the end of July if they have not renewed their applications by that date. There are significant changes to the income limits and claw back of entitlements for 2011/12 so you may wish to review the HMRC guidance. Alternatively if you need any help with the completion of your form or any advice on tax credits generally please do get in touch.

Internet links: HMRC tax credit deadlines HMRC Tax credit changes

Changes to the law to protect Patent and Design rights

The government has announced that it expects small and medium sized businesses to benefit from a new law which gives them easier access to justice to protect their patent and design rights. The introduction of a damages cap of £500,000 for claims made in the Patents County Court (PCC) means smaller businesses seeking damages up to that amount are less likely to have to resort to the High Court which could prove more costly.

The Patents County Court (Financial Limit) Order 2011 sets out to create a clearer definition of what disputes can be heard in the PCC and which ones should go to the High Court. Under the previous system businesses with a legal case worth less than £500,000 could face litigation in either court. This potentially exposed them to unknown levels of financial risk.

According to the press release:

‘The change in law will ensure that lower value, less complex cases, which would typically involve small businesses, will automatically fall within the jurisdiction of the lower, cheaper PCC. Therefore the risk of having costly disputes over where the case should be heard will be reduced. In the past some companies were put off protecting their rights due to the uncertainty of how much it would cost.’

Minister for Intellectual Property, Baroness Wilcox said:

‘Maintaining an effective and efficient intellectual property framework for businesses is not enough to drive innovation. We must offer businesses a more accessible justice system for them to enforce their rights. By making it easier for small firms and entrepreneurs to use the legal processes it will give them more time to concentrate on business activities.’

‘These changes will help small businesses and encourage them to innovate. It will also provide clarity over the legal processes, certainty over the risks and give small enterprises the confidence to stand on an equal footing with financially stronger companies.’

Internet link: News release

P11D deadline looming

The forms P11D, and where appropriate P9D, which report benefits and expenses for both employees and directors for the year ended 5 April 2011, are due for submission to HMRC by 6 July 2011.

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 12.8% (for 2010/11) on the provision of most benefits. The calculation of this liability is detailed on the P11D(b) form. For those employers who submit paper forms P11D these should all be sent to the address detailed in the link at the end of this article.

If you would like any help with the forms P11D or the calculation of the Class 1A liability please get in touch.

Internet links: HMRC P11D guidance HMRC advice HMRC new address for paper forms P11D