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Press Releases

December 2007 - FROM TAPER RELIEF TO POSSIBLE RETIREMENT RELIEF

In last month’s enews we reported on the shock announcement in the Pre- Budget Report that capital gains tax taper relief and indexation allowance would be scrapped for disposals on or after 6 April 2008. Since then business leaders have been making representations to the Chancellor, Alistair Darling, to change his mind or to delay the introduction of the proposals which have significant implications for many taxpayers.

December 2007 - HMRC APOLOGISE TO CHILD BENEFIT CUSTOMERS

Following the announcement that HMRC disks, containing an estimated 25 million Child Benefit recipients’ personal and banking information, have gone missing, HMRC have put a letter on their website apologising to all those potentially affected.

December 2007 - CHANGES AHEAD FOR CAPITAL ALLOWANCES

As you are no doubt aware the system of tax reliefs on expenditure on equipment in your business is a complex one. Broadly when you buy a piece of equipment to use in your business you normally cannot set the full cost against that year’s profits, unless the value of the item is quite small, or a special tax relief applies. The cost of more expensive items is written off against profits over a number of years, using the capital allowances system.

December 2007 - PAYE PENALTIES

HMRC had previously issued a significant number of incorrect late filing penalty notices to employers in respect of their 2006/07 PAYE end of year forms P35 and P14. These forms are used to report details of employees pay, tax, national insurance contributions, etc.

December 2007 - 2008/09 ALLOWANCES ANNOUNCED

The government has published the 2008/09 rates and allowances for income tax, national insurance contributions (NI), the state retirement pension as well as other benefits and allowances.

December 2007 - STAFF PARTIES

Are you planning a party for your employees? Are you aware of the tax implications?

November 2007 - INHERITANCE TAX CHANGE WELCOMED

Chancellor Alistair Darling announced in his Pre-Budget speech a change to the way in which the inheritance tax (IHT) nil rate band of £300,000 can be used for married couples and civil partners.

November 2007 - CAPITAL GAINS TAX TAPER RELIEF TO BE ABOLISHED

The Pre-Budget speech also included the shock announcement that taper relief for capital gains tax (CGT) will be abolished from 6 April 2008. This announcement took everyone by surprise and it is still unclear in some circumstances how these rules will be applied. There is also much speculation that the proposed changes may not be implemented or may be deferred.

November 2007 - ADDITIONAL MATERNITY AND PATERNITY PAY AND LEAVE

The government had previously announced their intention to extend Statutory Maternity Pay (SMP), Maternity Allowance and Statutory Adoption Pay from the current 39 weeks entitlement to 52 weeks.

November 2007 - COMPANY CAR DRIVERS AND FUEL

The Pre-Budget report also contained an announcement which will affect some company car drivers.

November 2007 - INCOME ‘SHIFTING’

We have previously reported the case of Mr and Mrs Jones who finally won their case in the House of Lords in July this year. You may remember that the profits of Arctic Systems (their company) were paid equally to them by means of dividends. HMRC had tried to have the income assessed solely on Mr Jones rather than between them but failed in their attempt.

October 2007 - PRE-BUDGET REPORT SUMMARY 2007

With Gordon Brown now in the top seat, the eyes of the nation were on Alistair Darling as he delivered his first pre-budget report. The will-they-won’t-they speculation surrounding the election, plus some tax cuts promises from the opposition meant that Darling had to deliver some potentially vote-winning changes.

September 2007 - ARCTIC SYSTEMS – HMRC GIVES GUIDANCE

Following the decision in the Arctic Systems case HMRC have provided guidance on how tax returns are to be dealt with following the House of Lords’ decision.

September 2007 - HMRC APOLOGISE FOR PAYMENT DELAY

HMRC have apologised to small employers, those with less than 50 employees, awaiting their £150 tax-free incentive payment in respect of the 2006/07 tax year. The incentive payment is due where an employer, or their agent, successfully filed their Employer's Annual Return form P35 and the supporting employee forms P14s online.

September 2007 - VAT FUEL SCALE CHARGES

The VAT fuel scale charge is the output VAT charge payable by VAT registered businesses which allow their employees to claim all the fuel expenses on their company cars and reclaim VAT on the full amount of fuel purchased without making an adjustment for private use.

September 2007 - TAX HELP FOR THOSE AFFECTED BY FLOODS

The Chancellor of the Exchequer, Alistair Darling, has announced that HMRC will introduce a series of measures to help individuals and businesses affected by the recent severe flooding. The Government will introduce legislation in next year's Finance Bill to allow HMRC to waive interest and surcharges on tax paid late due to the floods.

September 2007 - HELP FOR THOSE AFFECTED BY FOOT AND MOUTH

HMRC have announced that they appreciate some individuals and businesses will find it difficult to meet their tax obligations due to the recent foot and mouth outbreak.

September 2007 - VAT CHANGE FOR INVOICES

HMRC have issued guidance on changes to the rules regarding the information to be shown on invoices issued from 1 October 2007.

August 2007 - ARCTIC SYSTEMS - THE VERDICT

The long running saga of Geoff and Diana Jones and their company, Arctic Systems Limited, has recently been back to the courts for the final time to the House of Lords.

August 2007 - HMRC TO TARGET BANK ACCOUNTS

HMRC have started a consultation on the way in which they pursue individuals who do not pay their tax liabilities on time. The proposal, which would result in HMRC taking money owed directly from an individual’s bank accounts, would aim to tackle the problem of approximately 200,000 people who are pursued through the courts each year for outstanding tax.

August 2007 - PHISHING SCAMS

HMRC have been made aware of certain so-called 'Phishing' scams targeting taxpayers in an effort to fraudulently obtain personal information from them.

August 2007 - ADVISORY FUEL RATES

HMRC have issued advisory fuel rates for company car drivers. These take effect for all journeys undertaken from 1 August so employers should advise affected employees and update any expense forms as soon as possible.

August 2007 - OFFSHORE DISCLOSURE - HMRC FOLLOW UP

Recently in enews we reported what has been widely reported in the press as HMRC’s ‘Tax Amnesty’.

August 2007 - BUSINESS DISRUPTION - POSTAL DISPUTE

HMRC have announced that VAT returns and payments that were delayed by postal disputes will be viewed sympathetically. There will be no liability to a surcharge where the postal strike has caused a delay in the returns or payment being received.

August 2007 - REFUND OF VOLUNTARY NICS

As previously reported in enews in some limited circumstances individuals who have paid voluntary national insurance contributions (NICs) may be entitled to a refund. HMRC have now issued further guidance on the refund of voluntary NICs, following the Paymaster General’s announcement on 16 January 2007.

August 2007 - DELAYS IN VAT REGISTRATION

According to HMRC’s website it is currently taking an average of 38 days to process new VAT registration applications. The reason given for the delay is that HMRC have to carry out anti fraud checks in some cases and this leads to significant delays.

July 2007 - TAX CREDITS FINAL REMINDER

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 have a dip in normal levels of income perhaps due to incurring trading losses.

July 2007 - PERSONAL ACCOUNTS PENSIONS

The government has published details of a new savings scheme which will give all employees the right to a workplace pension with a contribution from their employer. At present employers with five employees have to offer access to a pension scheme but do not have to make an employer contribution.

July 2007 - ARCTIC SYSTEMS DECISION

The long running saga of Geoff and Diana Jones and their company Arctic Systems Limited has been back to the courts last week, this time to the House of Lords.

July 2007 - 28 DAYS HOLIDAY ENTITLEMENT – BUT NOT YET

A couple of months ago we reported on the government’s proposal to increase the minimum statutory holiday entitlement from the current 20 days (including bank holidays) to 28 days (bank holidays inclusive). The 28 days equates to 5.6 weeks for an employee working a five day week.

July 2007 - P11D DEADLINE LOOMING

The forms P11D, which report employees and directors benefits in kind and expenses for the year ended 5 April 2007 are due for submission to HMRC by 6 July 2007. The process of tracking down the information can take some time so don’t leave things until the last minute.

July 2007 - PAYE ONLINE

HMRC have issued a reminder to employers concerning their PAYE online service. The online service, which is used by many employers to submit the employer annual returns P35 and P14, is also used by HMRC to issue PAYE notices and reminders back to the employer.

June 2007 - FURTHER NATIONAL MINIMUM WAGE PENALTIES

Alistair Darling, the Trade and Industry Secretary, has announced that the government is to target employers with new fines if they pay below the National Minimum Wage (NMW).

June 2007 - CHARITIES GUIDE

A concise guide for small charities has been issued. The Cabinet Office and Charity Commission have launched 'Charities Act 2006 - what trustees need to know', which is being marketed as a concise guide to the biggest shake up of charity law for centuries. The guide is primarily aimed at those running small charities to enable them to make the most of the new laws.

June 2007 - NEW CASH DECLARATION RULES

HMRC have announced new rules applying to people coming to or leaving the UK. From 15 June 2007, people travelling to or from a country outside the European Union (EU) will need to declare any sums of cash of 10,000 Euros or more (or the equivalent in another currency) to HMRC. There is no requirement to declare cash if travel is to or from another EU country.

June 2007 - SMOKE FREE FROM 1 JULY

In last month’s enews we reported that, as a result of provisions in the Health Act 2006, enclosed public places and workplaces have to be smoke free from Sunday 1 July 2007. This date applies to England only.

May 2007 - MITCHELLS ACCOUNTANTS ACQUIRE TEE & COMPANY

Cheltenham based accountancy practice Mitchells is today announcing its acquisition of Gloucester based Tee & Company.

May 2007 - HMRC ASK IF YOU HAVE ANYTHING TO DECLARE

It is a common misconception that interest from offshore bank accounts is not subject to UK tax.

May 2007 -MINIMUM HOLIDAY ENTITLEMENT TO RISE

A few months ago we reported on the proposal by the Department for Trade and Industry (DTI) to increase the minimum statutory holiday entitlement from the current 20 days (including bank holidays) to 28 days (bank holidays inclusive). The DTI have been consulting with interested parties and should shortly publish the findings of their consultation.

May 2007 - PENALTY NOTICES FOR EMPLOYERS

HMRC have recently issued a considerable number of penalty notices to employers for not submitting their 2005/06 employer annual and contractor returns, which were due for submission by 19 May 2006.

May 2007 - ALL CHANGE FOR CAPITAL ALLOWANCES

The system of tax reliefs on expenditure on equipment in your business is a complex one. Broadly when you buy a piece of equipment to use in your business you normally cannot set the full cost against that year’s profits, unless the value of the item is quite small, or a special tax relief applies. The cost of more expensive items is written off against profits over a number of years, using the capital allowances system.

April 2007 - CORPORATION TAX CHANGES

The Chancellor has moved to discourage small businesses from incorporating for tax reasons by increasing the tax they will pay on profits up to £300,000, from 19% to 20% with effect from 1 April 2007. The small companies rate will further increase 21% in 2008 and to 22% in 2009.

April 2007 - INCOME TAX RATES

There has been a lot of publicity about the announcement that the government propose to reduce the basic rate of income tax from 22% to 20%. This change is due to take effect from 2008/09 and not from 6 April 2007.

April 2007 - CONSTRUCTION INDUSTRY SCHEME

With the new scheme starting on 6 April 2007, HMRC have been issuing packs to contractors to help them with the new rules.

April 2007 - EMPLOYERS END OF YEAR RETURNS

The Employers annual returns P35 and P14 (P60) are due for submission to HMRC by 19 May 2007. There is a tax free incentive payments due of £150 for small employers with less than 50 employees who successfully file their returns electronically.

April 2007 - NATIONAL MINIMUM WAGE INCREASES

The new National Minimum Wage rate of £5.52 (£5.35) an hour from October 2007 has been announced. Other rates rise from £4.45 to £4.60 for 18-21 year olds, and from £3.30 to £3.40 for 16-17 year olds.

April 2007 - CHECK YOUR STATE RETIREMENT PENSION ENTITLEMENT

A recent case has once again illustrated the difficulties for people who don’t check their own state pension entitlement and later find out that there are ‘holes’ in their record.

April 2007 - VAT FUEL SCALE CHARGES

HMRC’s intention is to change significantly the VAT fuel scale charges payable by businesses on the provision of fuel for private motoring for their company car drivers. The system of calculating the output VAT charge on a simple cylinder banded table is withdrawn for the businesses first VAT return commencing after 1 May 2007.

March 2007 - BUDGET REPORT SUMMARY 2007

Gordon Brown has delivered his eleventh, and what is expected to be his final, Budget. This year’s measures contained a few shocks, with the Chancellor’s tax cut provoking an uproarious reaction from Labour and Conservative benches alike. The Budget has been described as ‘substantial’, no surprise if Mr Brown has his eye firmly on Number Ten.

March 2007 - ADVISORY FUEL RATES FOR COMPANY CARS

HMRC have announced new rates for journeys on or after 1 February 2007.

March 2007 - USE OF COMPUTERS

Before 6 April 2006 the first £500 of the benefit in kind charge arising on the private use of employer provided computer equipment was exempt from tax. As the ‘annual value’ benefit in kind on the use of an asset is calculated as 20% of the market value of the asset when first used to provide the benefit, this exemption generally covered any potential benefit in kind.

March 2007 - VAT FUEL SCALE CHARGES

HMRC have produced some of the tables but not the final VAT fuel scale charges which are due to come into effect on 1 May 2007. Businesses will have to use the new scale charges from the start of their first accounting period beginning on or after this date. HMRC are announcing the change early to allow businesses time to familiarise themselves with the new charging structure and make any necessary IT system changes.

March 2007 - CASH ACCOUNTING LIMIT RAISED

HMRC have announced that the threshold for the Cash Accounting Scheme will be more than doubled from £660,000 to £1,350,000 from 1 April 2007.

March 2007 - INCREASED MATERNITY PAY

HMRC have updated their guidance on Statutory Maternity Pay (SMP) due to women whose babies are due on or after 1 April 2007.

March 2007 - IMPLEMENTATION OF THE CHARITIES ACT 2006

The Government has issued the first commencement order which brings into force a number of the Act's provisions with an effective date of 27 February 2007. Details of exactly what becomes effective were summarised by the Office of the Third Sector in an implementation plan which can be reached using the link below

February 2007 - CHANGES REQUIRED TO WEBSITES AND ELECTRONIC DOCUMENTS

The government has recently issued new legislation extending the requirements for companies and Limited Liability Partnerships (LLPs) to provide certain particulars about themselves on their websites and in electronic versions of all documents.

February 2007 - TAX INSPECTORS TO RECEIVE BONUSES

The Times has reported that Tax Inspectors are to be encouraged to collect more money by being given bonuses linked to the amount of revenue they bring in.

February 2007 - PENSIONS BILL

More people than ever would be entitled to a full basic state pension as a result of measures included in the new Pensions Bill, which had its second reading in the middle of January.

February 2007 - MINIMUM HOLIDAY ENTITLEMENT SET TO RISE

Jim Fitzpatrick, Employment Minister, has announced the government's proposal to increase workers' holiday entitlement from 20 days per year to 28.

February 2007 - FINES FOR NON PAYMENT OF THE NATIONAL MINIMUM WAGE

Trade and Industry Secretary Alistair Darling has announced that employers who refuse to pay the minimum wage could face a £200 fine for every worker they underpay.

February 2007 - HOMEWORKING COSTS FOR THE SELF EMPLOYED

HMRC have revised their guidance on the deductibility of household expenses for those people who work from home on a self employed basis. This has always been a complex area and case law has meant that the rules were at least very confusing!

January 2007 - VAN DRIVERS HIT BY TAX INCREASE

Mitchells are warning company van drivers to be aware of a huge tax increase about to be introduced.

January 2007 - CONSTRUCTION INDUSTRY SCHEME

In last month’s enews we reported that HMRC had launched their press campaign on the introduction of the new Construction Industry Scheme (CIS) which will be introduced on 6 April 2007. In the Pre-Budget Report the government made two announcements regarding CIS tax rates.

January 2007 - MANAGED SERVICE COMPANIES ATTACKED

In 2000 the government introduced rules to tackle the provision of services through Personal Service Companies (PSCs). These rules have been referred to by the name of the press release of that time, IR35.

January 2007 - AIR PASSENGER DUTY

For those of you planning to fly off in the New Year you should be aware that Air Passenger Duty (APD) rates will be increased from 1 February 2007.

January 2007 - DATE FOR ARCTIC SYSTEMS HEARING ANNOUNCED

At last, it has been announced that the Arctic Systems case will be heard in the House of Lords from 5 to 7 June 2007. The case, and the subsequent uncertainty, has now been running for more than two years and it is to be hoped that some sort of finality to this issue can be obtained before the end of 2007.

January 2007 - HMRC EMAIL SCAM

HMRC have issued a warning to taxpayers about an email scam which is a ‘phishing exercise’ that uses bogus emails and websites to trick people into supplying confidential or personal information.

Mitchells Chartered Accountants

Mitchells Chartered Accountants | 41 Rodney Road | Cheltenham | Gloucestershire | GL50 1HX.
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