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We are committed to ensuring none of our clients pay a penny more in tax than is necessary and they receive useful tax and business advice and support throughout the year.
Please contact us for advice in your own specific circumstances. We’re here to help! May 2024
· Treasury collects £10bn extra in Business taxes
· Tax penalty fears for pensioners as millions ‘dragged into net’
· New employment rights kick in
· HMRC helpline axe saga rumbles on as closure looms again
· May Questions and Answers
· May Key Dates
It has been revealed that companies across the UK have paid £95.2 billion in Business taxes in the financial year just finished (23/24) – a rise of £10.3 billion compared to the year before.
These taxes include receipts from Corporation Tax, Petroleum Revenue Tax, Bank Levy, Bank Surcharge, Diverted Profits Tax, Digital Services Tax, Residential Property Developer Tax, Energy Profits Levy, Electricity Generator Levy and Economic Crime Levy.
For all taxes across the board, total HMRC receipts for April 2023 to March 2024 were £827.7 billion, which is £39.1 billion higher than the same period last year. The figures were revealed by HMRC in one of its latest statistical round ups.
The latest data also contained information on PAYE income tax receipts, which were seen to grow by 11.4% year-on-year. But receipts from income tax collected via self-assessment declined slightly by 1% year-on-year.
If you need any advice on business tax at your organisation, do please get in touch.
Baroness Ros Altmann, a leading campaigner on pensions, has highlighted her fears after figures showing that the number of pensioners liable for tax have doubled in the last 14 years.
The number has risen to over 9 million, compared to just 4.5million back in 2010.
She said the stats were ‘worrying’ and means millions more pensioners are being ‘dragged’ into the tax net.
Baroness Altmann, who served as Pensions Minister under David Cameron, said as the new State Pension climbs above 90% of the personal tax threshold, more pensioners may be hit with tax penalties.
Writing on her website, she stated: ‘It is worrying that so many more pensioners could be dragged into the tax net. Many may have no idea they need to pay tax at all, especially if they have never been liable before.’
She added: ‘More pensioners are at risk of facing fines for not paying tax they never knew was due: Most of those tipped into tax will be poorer pensioners with little more than their state pension to live on. Most of them will be totally unaware of any liability and will probably never have filled in a tax return in their life. They are then at risk of being hit with fines and penalties for not paying a tiny amount of tax that they didn’t even know about.’
Business owners need to be aware of a batch of new laws that have just taken effect covering employees’ rights.
There are new protections for pregnant women and new parents facing redundancy.
And workers are also getting more flexibility over where and when they work.
New laws are said to provide greater security for workers by strengthening existing redundancy protections to cover pregnancy and a period of time after parents return to work.
And The Employment Relations (Flexible Working) Act has also come into force. Employees now have ‘the right to request reasonable flexible working from their first day of employment’, according to the Government. Requests are, however, subject to business approval. But employers must consult with their employee before rejecting such a request. Two such requests can be submitted each year.
The changes to redundancy rules took effect from 6 April, extending the redundancy-protected period for pregnant employees or anyone taking maternity leave. Previously, women were only protected while on maternity leave.
The new laws also protect workers who have not started maternity leave and notified their employer of their pregnancy before 6 April 2024. The redundancy-protected timeframe starts when an employee informs their employer about being pregnant and it ends 18 months from the day the baby is born.
Business Minister, Kevin Hollinrake, said: ‘Whether you’re a new parent trying to juggle work commitments with a newborn or a pregnant woman balancing the pressures of work and life, or looking after a disabled or elderly family member while working, these new laws will give families greater security and flexibility.’
The saga over whether HMRC will axe its tax helpline continues to rumble on, with the latest comments suggesting it may still close after all.
HMRC had to back down from a proposal that would see the Self-Assessment line closed from 8 April to 30 September, following widespread pressure and then the intervention of Chancellor Jeremy Hunt.
In the latest twist though, Jim Harra, HMRC’s chief executive, has refused to rule out future helpline cuts. Speaking to The Treasury Select Committee in late April, he said the time-limited closure of the phone line had been trialled successfully last year and was part of the body’s strategy.
Despite recently halting plans to cull it for half the year, Mr Harra told MPs: ‘I am not saying we won’t return to this.’
HMRC has started a consultation to look into the impact that shutting the helpline would cause for small businesses and taxpayers.
Rather than use the phone line, anyone seeking help from HMRC officials would be faced with using online services such as a chatbot instead.
Mr Harra said: ‘Making best use of online services allows HMRC to help more taxpayers and get the most out of every pound of taxpayers’ money by boosting productivity.’
A: Thanks for your question. This is actually a subject which has risen to the surface lately after HMRC issued a clarification. The upshot is that when a hybrid worker travels to their employer’s office, it does NOT qualify for tax relief.
We’ve seen a debate on this since hybrid became a new common working pattern after the pandemic, with some arguing the case that going to the office should count as a ‘journey in the performance of the duties of employment’. Under this description, these travel expenses normally do qualify for tax relief for employees.
The new HMRC guidance stated: ‘The fact that an employee’s home is treated as a workplace for tax purposes is not enough, on its own, to enable the employee to obtain relief under Section 337 for the expenses of travelling to another permanent workplace. For most people, the place where they live is a matter of personal choice. So the expense of travelling from home to any other place is a consequence of that personal choice, not an objective requirement of their job.’
It adds: ‘The expenses of travelling from home to another workplace do not qualify for relief under Section 337 unless the location of the employee’s home is itself dictated by the requirements of the job.’
However, if you were on a remote worker contract, as many these days are, that would be different if you were asked to travel into an office.
The HMRC guidance says on this: ‘Where an employee’s home is itself a place of work, the cost of travel between there and other permanent workplaces may sometimes be deductible under Section 337 as travel in the performance of the duties.’
A: It’s true that in hiring a veteran there is a tax implication to consider – but a good one! Your new recruit will be referring to the fact that businesses who employ former UK Armed Forces personnel, who are entering their first job in civilian employment, can apply zero-rate of secondary National Insurance contributions (for that employee) for up to 12 months. To ensure the veteran qualifies for the NI relief, you must only double check these two points. They must have:
– served at least one day in the regular armed forces
– completed at least one day of basic training
The way you need to claim the relief is by submitting a revised Final Payment Submission (FPS) using National Insurance category letter V for qualifying veteran employees. The relief only applies to the part of the employee’s earnings below the veterans upper secondary threshold.
A: Firstly, you’re right. As with other types of taxable income and benefit, they have an associated monetary value, and do need to be reported to HMRC. You may have heard of a P11D form? If not, what that is a means to report ‘benefits in kind’ – the type of benefits for staff that you’re talking about.
You need to submit a P11D for all staff and directors who get benefits – whether these are the ones you’ve outlined or anything else.
Any items that your business pays for which the staff member gains benefit from must be included on the P11D. So, think also about phones, company cars, loans for rail season tickets, and so forth. Some expenses are not required to be included in these forms. That’s things like business travel and entertainment expenses or credit cards used for company purposes.
In terms of filing a P11D they must be submitted to the tax man by July 6 after the tax year in question. They only accept digital filing these days. It’s all online.
The alternative to the P11D is paying benefits via payroll. You must register with HMRC if you want to do this, but it could save time, depending on how many staff you have (and therefore how many P11D forms you need to fill out). And in actual fact, changes are afoot that mean in future (from April 2026) the P11D will be scrapped, and it will become mandatory to report employment benefits and pay Class 1A National Insurance Contributions (NIC) through payroll software.
So, you might consider whether it’s best to be prepared for this compliance change now, rather than wait.
5th
– Companies House fees are increasing due to the recent introduction of the ECCTA. It will cost £50 to incorporate a company online – an increase from £12. The cost of filing a confirmation statement will go up to £34 (from £13).
5th
– Deadline for a 2024/25 tax credits claim to be backdated to 6 April 2024.
19th
– For employers operating PAYE, this is the deadline to send an Employer Payment Summary (EPS) to claim any reduction on what you’ll owe HMRC
22nd
– Deadline for employers operating PAYE to pay HMRC. This is also the quarterly deadline for businesses that pay per quarter. For those paying by post, the deadline is 31 May.
31st
– Corporation Tax Returns are due for companies with year-end of 31 May
31st
– Deadline for P60s for employees who were on your payroll on 5 April 2024
Disclaimer
The information contained in this newsletter is of a general nature and no assurance of accuracy can be given. It is not a substitute for specific professional advice in your own circumstances. No action should be taken without consulting the detailed legislation or seeking professional advice. Therefore no responsibility for loss occasioned by any person acting or refraining from action as a consequence of the material can be accepted by the authors or the firm.
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