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Further changes to impact employers

19 December 2014

 

Further changes to impact employers

Additional HMRC powers

HMRC will be allowed to impose penalties for the failure to furnish any information, or produce any document or record required to be submitted in connection with the avoidance of employment taxes by UK agencies engaging UK workers via non-UK agencies.

 

Payrolling benefits

During the 2015-16 tax year, HMRC will amend regulations so that employers can voluntarily process certain benefits via the payroll process from 6 April 2016.

 

Where an employer chooses to payroll BIK for car fuel, medical insurance and gym membership, they will no longer need to submit form P11D. Employers may want to consider whether the additional training requirements may be necessary to enable staff to process the amounts via payroll.

 

Special purpose share schemes

Companies may use special purpose share schemes to offer shareholders the choice to receive either a dividend or a similar amount. These may subsequently be purchased by the company or sold to a pre-arranged third party. Under the new rules, where a shareholder is given a choice between receiving a taxable distribution, or an alternative receipt of substantially the same value, the alternative receipt will be subject to Income Tax, if that choice is taken.

 

Van benefit charge for zero emission

From April 2015, the taxable benefit for zero CO2 emission vans will increase from nil to 20%, this will increase to 40% on 6 April 2016, 60% from April 2017 and 90% from April 2019. With effect from April 2020, a single rate will apply to all vans.

 

Construction Industry Scheme (CIS)

A series of changes will be introduced to improve the operation of the CIS making it easier for businesses to access the gross payment status, reduce administration burdens and move more transactions online. These include:

 

From 6 April 2015

  • allow an earlier repayment to liquidators in insolvency proceedings
  • the nil return obligation will be amended
  • joint ventures where there is already one member with a gross status will be allowed an easier access to a gross pay status.

 

From 6 April 2016

  • turnover test will be reduced to £100,000 for multiple directorships
  • the initial and annual compliance tests will focus on fewer obligations.

 

From 6 April 2017

  • mandation of filing of CIS returns and online verification.

 

Travel and subsistence review

In the Budget 2014, the government announced a review of the rules for tax relief on travel and subsistence payments, in response to the Office of Tax Simplification’s review on employee benefits and expenses. The government has undertaken the initial stages of this review and continues to take this work forward towards a full public consultation on the framework for new rules. We understand that HMRC is currently rewriting the booklet 490 with a view to publishing a revised and updated guidance ahead of the Budget 2015.

 

Tax exemption for travel expenses of members of local authorities

The government will exempt travel expenses, paid to councillors by their local authorities, from Income Tax and employee NIC. The exemption will be limited to the Approved Mileage Allowance Payment rates where it applies to mileage payments. This change will take effect from 6 April 2015. This seems to provide unfairness if the councillors can already claim a tax deduction for travel expenses while performing the duties of their office. Furthermore, why should this tax exemption for travel expenses not apply to others for example, trustees and non-executive directors?

 

Abolish employer NICs up to the upper earnings limit for apprentices aged under 25

The government will abolish employer NICs up to the upper earnings limit for apprentices aged under 25. This will come into effect from April 2016.

 

For further information on any of the above details, please contact your usual contact Crowe Clark Whitehill advisor orSusan Ball on 020 7842 7238.

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