Employment Tax

Technical
1 February 2018

A round up of recent HMRC employment taxes related consultative forum meetings, including the Employment and Payroll Group, Student Loan Consultation Group, and IR35 Forum.

Technical
1 January 2018

The CIOT has welcomed HMRC’s intention to preserve in legislation the effect of ESC A37 and the administrative practices at EIM03002, EIM01120 and EIM61030.

Technical
1 December 2017

In September 2017 the government published draft clauses for the Finance Bill which will be published in December 2017, known as the Winter Finance Bill, along with accompanying explanatory notes, tax information and impact notes and other supporting documents. The CIOT commented on a number of these.

Technical
1 August 2017

PAYE is changing, HMRC is starting to use RTI data from employers in real time when recalculating employees’ tax codes. The RTI feed will be used to estimate earnings when a tax code review is triggered, for example when a new benefit-in-kind is notified. Where HMRC calculate that the new tax code will under-collect tax for the remainder of the year an in-year restriction will be included in the tax code, aimed at collecting that estimated underpayment in year.

Technical

The call for evidence was initiated by the (last) government to consider (i) whether the tax rules for expenses of employment need to change to reflect changes in employment engagement practices, (ii) whether the rules and their administration can be made simpler and clearer, and (iii) why there has been a 25% increase since 2009-10 in claims to HMRC from employees for tax relief on non-reimbursed expenses. In their submissions to the call for evidence, the ATT, CIOT and LITRG suggest that the existing system is not broken, per se, but could certainly be improved.

Technical
1 July 2017

April 2016 saw new rules limiting home to work travel and subsistence expense relief for workers employed through an intermediary, such as an umbrella company. Even where such expenses could be allowed, other new rules restrict the ways in which umbrella companies can reimburse workers’ expenses. LITRG reviews how the April 2016 rules are operating in practice. Umbrella companies have had to adapt and you may start to see some interesting issues in practice as a result.

Technical

The review, led by Matthew Taylor (Chief Executive of the Royal Society of the Arts), was commissioned by the last government to consider how employment practices need to change in order to keep pace with new forms of work – in particular those driven by online platforms. In their submissions to the review, the CIOT and LITRG both highlight the importance of tax – something not formally within the remit of the review – in the debate.

Technical
1 June 2017

The first Finance Act of 2017 introduces new IR35 rules for workers in the public sector, changes the way salary sacrificed benefits-in-kind are taxed and imposes a 25% tax charge on transferring pension savings offshore.

Technical
1 May 2017

New rules contained in the Finance Bill are designed to remove the tax advantages that arise when certain non-cash benefits-in-kind are provided as part of a salary sacrifice or flexible benefit arrangement. The changes affect more than traditional salary sacrifice so that, broadly, where an employee has an option to receive cash or benefits, the new rules may be relevant. If the new rules apply then the higher of the cash equivalent of the benefit-in-kind and the amount of salary forgone, less any amounts made good by the employee, is subject to tax and employer’s NICs.

Technical
1 May 2017

We round up four HMRC forum meetings from March: (i) the Employment and Payroll Group (ii) the Collection of Student Loans Consultation Group, (iii) Pensions Industry Stakeholder Forum and (iv) Construction Industry Scheme Operation Forum.