Archive for August, 2015

Higher rate of film tax relief has been given the go ahead.

Wednesday, August 26th, 2015

Britain is set to attract the production of more films like The Theory of Everything, Gravity and Avengers: Age of Ultron after the Chancellor of the Exchequer, George Osborne announced a new higher rate of film tax relief has been given the go ahead.

 

Under the new plans the £1.4 billion film industry will receive a tax credit of 25% on all qualifying expenditure bringing it in-line with TV tax relief. This means a British film costing £40 million will receive an additional £1 million towards productions costs from the change.

 

The Chancellor announced the scheme, which will be backdated to apply from April 2015, whilst visiting the set of Agatha Raisin, a new British TV series being filmed in Wiltshire that is benefiting from the government’s high-end TV tax relief. Under the scheme the government provides a tax credit of 25% on qualifying British TV productions.

 

Chancellor of the Exchequer George Osborne said:

 

“British made films are watched and celebrated all over the world – last year alone we saw eight British made films nominated for an Oscar.

 

A key part of our long term economic plan is supporting our creative industries that contribute billions to the economy and provide millions of jobs.

We want to see more films, like Gravity and Avengers: Age of Ultron, made in Britain and that’s why we’ve made our film tax relief even more generous.”

 

The government’s film tax relief has supported almost £8 billion of production expenditure since its introduction, including films such as Oscar winning Gravity, Maleficent and Harry Potter. It supported 222 films in 2014 alone. In the March 2015 Budget, the government announced that it would further support the film industry by increasing the rate of film tax relief to 25% for all qualifying productions. Previously, the rate was 25% for the first £20 million of qualifying expenditure and 20% for spending above this threshold. The scheme has just been given State Aid approval by the EU which means it can now go ahead as planned.

Pension Schemes for Auto Enrolment

Monday, August 24th, 2015

The Pensions Regulator (TPR) has published some guidance aimed at the 1.3 million small and micro employers who are preparing for pensions auto enrolment. The guidance aims to help employers find a good quality pension scheme. TPR research suggests one in five (290,000) employers will not seek advice when choosing a pension scheme, while one in ten (130,000) do not know how to select a scheme, or think it will be difficult.

The information includes details of a list of ‘master trust’ pension schemes open to employers of all sizes, and which have been independently reviewed to help to demonstrate that they are administered to a high standard.

TPR have also made available a quick guide for small and micro employers on what to look out for when choosing a scheme suited to their needs. They have also updated their webpage guidance to advisors.

Lesley Titcomb, chief executive of The Pensions Regulator, said:

‘I strongly believe that the vast majority of the 1.3 million small and micro employers approaching automatic enrolment want to do the right thing. However, many will choose not to seek advice and will need additional support to meet their duties.

We are committed to providing them with the information they need to make confident choices when it comes to choosing a quality scheme for their employees.’

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

Internet link: Press release

Alcohol Wholesaler Registration Scheme

Monday, August 24th, 2015

The Alcohol Wholesaler Registration Scheme (AWRS) is being introduced on 1 October 2015 by HMRC to tackle alcohol fraud. HMRC are advising that if you are an alcohol wholesaler or trade buyer, you need to prepare for the new registration scheme now.

Who the scheme applies to

HMRC are advising that the AWRS will apply to existing, and new, wholesalers of alcohol, trading at or after the point at which excise duty has become payable. In addition all businesses that trade in or retail alcohol will in future need to make sure that any UK wholesalers that they buy from are registered with HMRC. The types of business who will be affected include:

  • alcohol wholesalers
  • brokers
  • auctioneers
  • alcohol retailers.

The scheme will not apply to private individuals purchasing alcohol from retailers.

HMRC are advising that:

  • from 1 October 2015, all alcohol wholesalers must apply online to HMRC to register for AWRS
  • from 1 January 2016 HMRC will start to review all AWRS applications to decide whether businesses are ‘fit and proper’ to be accepted onto the register. Where a business fails the ‘fit and proper’ test, HMRC will remove its right to trade in wholesale alcohol
  • from 1 April 2017, all businesses that trade in, or retail, alcohol will need to make sure that any UK wholesalers that they buy from are registered with HMRC. HMRC will provide an online look up service so that trade buyers can ensure wholesalers they buy from are registered with HMRC.

Internet link: GOV.UK AWRS

Time to Pay Arrangements – Mandatory Direct Debit

Monday, August 24th, 2015

Where a taxpayer has difficulty paying their tax liabilities HMRC may agree ‘time to pay arrangements’ whereby the taxpayer agrees to pay off the amount owing by instalments after the due date. These arrangements are only entered into where the taxpayer is genuinely unable to pay by the due date and is able to commit to agreed payments to bring their tax up to date.

HMRC have announced that where time to pay arrangements are agreed the payments will need to be made by Direct Debit.  This has always been HMRC’s preferred method of collection but this became mandatory from 3 August 2015.

However, HMRC do state that:

‘We recognise that there will be exceptional circumstances where a customer is unable to set up a direct debit, perhaps because their bank account will not allow it. In such cases payment by other methods may be agreed.’

Internet link: GOV.UK blog

NMW campaign targets hair and beauty sector

Monday, August 24th, 2015

HMRC are targeting employers in the hairdressing and beauty sectors who pay their staff below the national minimum wage (NMW).

HMRC and the Department for Business, Innovation and Skills (BIS), supported by the National Hairdressers’ Federation and the Hair and Beauty Industry Authority, will work with hair and beauty businesses to help them understand their pay obligations to their employees.

In a new approach HMRC will provide employers with tools and guidance to check if they are paying the correct amount.

Employers who take this opportunity to ‘self-correct’ will not have to pay penalties, nor will they be ‘named and shamed’. If employers choose not to comply with their NMW obligations, HMRC will take action to ensure that employees are paid what they are owed.

As detailed in the press release ‘BIS analysis shows that 42% of businesses in the sector do not pay level 2 and level 3 apprentices the correct minimum wage – the highest underpayment rate of any sector. Those paying under the minimum wage now have a chance to put things right. If they fail to do so it could result in their business being publicly ‘named and shamed’ and facing a fine of up to £20,000 per employee.’

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

‘This innovative campaign is about helping employees who have been underpaid get the money they are legally due back into their pockets. It will help them understand where they can report underpaying employers confidentially.

It is also about helping employers check if they are making mistakes, and self-correct if they are. Some employers will need a bit of a reminder to check they are getting it right, and some will need stronger action from us, so we are bringing in more enforcement officers to support this campaign.

I urge all employers and employees in the sector to check that salary is being paid correctly, as we will use these extra resources to find and investigate where it is not. Check you’re paying NMW correctly – it’s worth it.’

Employers in the hair and beauty sector are being asked to come forward as part of the National Minimum Wage Campaign by:

  • advising HMRC they want to take part in the campaign
  • disclosing details of arrears now paid to their workers and confirming that wages worth at least the NMW are now paid to all workers.

If you would like help with NMW issues please contact us.

Internet link: GOV.UK nmw campaign

Tax-Free Childcare to launch in 2017 following court ruling

Monday, August 24th, 2015

The government has welcomed a judgment from the Supreme Court that found the proposals for delivering Tax-Free Childcare to be lawful. The new Tax-Free Childcare Scheme was being challenged by some of the providers of the childcare vouchers typically used in the current Employer Supported Childcare arrangements.

The scheme is now expected to launch from early 2017. The existing Employer Supported Childcare scheme will remain open to new entrants until Tax-Free Childcare is launched.

Exchequer Secretary to the Treasury, Damian Hinds said:

‘We are pleased that the government’s proposals for delivering Tax-Free Childcare have been found to be clearly lawful. This government is absolutely clear on the importance of supporting families with their childcare costs.’

‘It is disappointing that some organisations involved in the existing scheme felt the need to take and persist in this costly and wasteful course of action, which has led to a delay in the launch of Tax-Free Childcare.’

If you would like advice on Employer Supported Childcare please contact us.

Internet link: GOV.UK news

Latest job market statistics

Monday, August 24th, 2015

The Office for National Statistics (ONS) has released figures showing that the UK employment rate has dropped by 67,000 when compared to the three months to February 2015. As detailed in the press release the figures show:

  • There were 30.98 million people in work. This was 67,000 fewer than for the 3 months to February 2015, the first quarterly fall since February to April 2013. Comparing March to May 2015 with a year earlier, there were 265,000 more people in work (272,000 more people working full-time and 7,000 fewer people working part-time).
  • The proportion of people aged from 16 to 64 in work (the employment rate) was 73.3%, little changed compared with the 3 months to February 2015 but higher than for a year earlier (72.9%).
  • There were 1.85 million unemployed people. This was 15,000 more than for the 3 months to February 2015, the first quarterly increase since January to March 2013. Comparing March to May 2015 with a year earlier, there were 273,000 fewer unemployed people.
  • The proportion of the economically active population who were unemployed (the unemployment rate) was 5.6%, little changed compared with the 3 months to February 2015 but lower than for a year earlier (6.5%). Economically active people are those in work plus those seeking and available to work.
  • There were 9.02 million people aged from 16 to 64 who were out of work and not seeking or available to work (known as economically inactive), 30,000 more than for the 3 months to February 2015 and 104,000 more than for a year earlier.
  • The proportion of people aged from 16 to 64 who were economically inactive (the inactivity rate) was 22.2%, little changed compared with the 3 months to February 2015 but higher than for a year earlier (22.0%).
  • Comparing March to May 2015 with a year earlier, pay for employees in Great Britain increased by 3.2% including bonuses and by 2.8% excluding bonuses.

Internet link: ONS

Benefit in kind changes

Monday, August 24th, 2015

From 6 April 2016 HMRC are introducing an exemption from paying tax and National Insurance contributions (NICs) on qualifying paid or reimbursed expense payments to employees. This means that where an employee is entitled to claim a fully matching tax deduction (i.e. if they incur a business expense they can claim it back from their employer) employers will no longer need to apply for a dispensation, or report those expenses on form P11D. All other non-allowable expenses will still be subject to tax and NICs as they are now. Employees will still be able to claim tax relief from HMRC in respect of non-reimbursed expenses.

This new exemption will not, however, apply to expenses or benefits in kind provided under a relevant salary sacrifice arrangement. This includes any arrangement where employees give up the right to receive earnings in return for tax free expenses payments, or where the level of their earnings depends on the amount of any expenses payment. After 5 April 2016 any expenses payments you pay to employees under these arrangements will need to be paid after deducting tax and NICs.

 All current dispensations agreed with HMRC will no longer apply after 5 April 2016.

 Advisory Mileage Allowance payment (AMAP) and Advisory Fuel Rates (AFRs)

If you have employees who travel for work purposes (excluding normal commuting) in their own vehicle you will still be able to reimburse them using the AMAP rate. (Currently, up to 45p per mile for the first 10,000 business miles and 25p per mile thereafter.) Employees receiving less than the AMAP rates for business travel will still be able to claim Mileage allowance relief (MAR) on the difference. Employees carrying out business travel in a company car, and not getting employer provided fuel, will still be able to receive fuel payments based on our AFRs. Employees can claim a tax deduction for non-reimbursed fuel costs using the existing rules.

 

Couple banned from acting as directors

Thursday, August 20th, 2015

Mark and Janet Styler have been disqualified from acting as directors for six years for withdrawing funds from Window & Conservatory Options Limited after they had been told the company was insolvent and could not afford to continue the level of payments to them.

The company, which began trading in March 2009, sold and installed double-glazing and conservatories to domestic customers throughout the Tameside, Peak District and Derbyshire areas.

An insolvency service investigation found that:

  • In June 2011, Mr & Mrs Styler approved accounts which showed that the company was insolvent. At the time, accountants warned them about the risk of continuing to trade and that their level of drawings from the company exceeded the profits, as they owed the company £95,862
  • The directors received draft accounts on 6 February 2012 for the period ending 30 September 2011, which showed the company was still insolvent. The accountants again warned the directors about their level of drawings of £133,448 for that year
  • A few days later, on 10 February 2012, the directors instructed new accountants to re-do the 2011 accounts. The new accountants amended the accounts based on information provided by Mr & Mrs Styler. The revised accounts showed that the company remained insolvent. However, the amount that the directors owed to the company had disappeared
  • From 11 February 2012 to 17 September 2013 the directors received further payments of £172,715.50 from the company
  • The directors ignored the warnings and continued to withdraw funds from the company, and as a result the company could not make payments to its creditors. On 27 September 2013 the company was placed into Liquidation

Commenting on the disqualification, Cheryl Lambert, Chief Investigator at the Insolvency Service, said:

Directors who abuse limited liability and use company funds to meet their personal expenses can expect to be investigated by the Insolvency Service and enforcement action taken to remove them from the market place. Mr & Mrs Styler repeatedly ignored warnings from professional advisors and used company funds as their own.

Taking action against Mr & Mrs Styler is a warning to directors of their responsibilities and requirements to act for the good of the company and its creditors.

Paid too much or too little tax

Tuesday, August 18th, 2015

 HMRC have issued a press release advising tax payers that they are sending out annual statements for the tax year to 5 April 2015.

The statements are styled P800 forms and summarise income and allowances for the year and the calculation of tax due and tax paid. If you have over paid tax the statement will trigger a repayment in most cases. If you have underpaid, HMRC will generally adjust your PAYE coding to recover the amount due during the tax year 2016-17. If this is not practical you will get a request to make a payment. HMRC have also acknowledged that is cases of financial hardship they will negotiate extended repayment terms.

 Here’s what HMRC published to their website:

“This year, if you’ve paid too much or too little tax, we’re making the process as easy as possible for you.

We will tell you how we’re collecting any underpayment, or we’ll give you a cheque if we owe you money.

There is no need to contact us unless you think the details we’ve used are wrong.

What you need to do

If you get a P800 tax calculation, please check the details are correct.

You can:

  • compare the figures used with your own records, such as your P60, P11d, bank statements or letters from the Department for Work and Pensions (DWP)
  • use the HMRC tax checker to check how much tax you should have paid

You don’t need to do anything if the calculation is correct.

If you’ve underpaid tax

If you haven’t paid enough tax, we’ll usually change your tax code for the next year to collect the money you owe. This happens automatically so you won’t need to do anything and don’t need to contact us.

Sometimes we can’t collect the money you owe through your tax code, for example, if you’re now out of work. In this case, we’ll write to you explaining how to pay the money you owe.

If you’ve overpaid tax

If you have paid too much tax, we will automatically send you a cheque within 14 days of receipt of your P800. You won’t need to do anything and don’t need to contact us.”

However complex your tax affairs, it is advisable to check the P800 form when it arrives.