The taxes that are moving to compulsory online filing are:
end-of-year and in-year PAYE (Pay As You Earn) forms for employers
VAT
Corporation Tax
It is already possible to manage all of the above taxes online and many businesses do, but a timetable has now been put in place for filing online to become compulsory – so it makes sense to start getting used to the systems now.
For businesses with 50 or more employees, it is already mandatory to deliver certain information online. Smaller firms will have to file their end-of-year forms online by April 2010 at the latest, and filing in-year forms will become compulsory from April 2011.
VAT management will be switching to online filing and electronic payment only from April 2010, for companies registered on or after that date, as well as any company with a turnover of £100,000 or above.
Company Tax Returns and supporting documents need to be supplied in Extensible Business Reporting Language (XBRL) from 31 March 2011, relating to periods ending on 1 April 2010 or later. Individual companies are responsible for ensuring their software systems can cope with this, and tax returns not in the correct format will be treated as not having been delivered.
Danbro is used to working with the latest technology and is already working to help clients adjust to the new systems. For more advice about filing and paying tax online, please contact us.
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( 3 / 37 )In his Budget, the Chancellor announced two changes to tax relief on pension contributions for individuals with income above a certain level.
From 6 April 2011 it is intended that tax relief on pension contributions will be restricted for individuals with an annual income of £150,000 or more. Relief will be tapered away so that for those earning over £180,000 relief will be worth 20%, the same as to a basic rate taxpayer. The Government still needs to consult with interested parties before announcing the detail of the changes.
However, the Government is introducing new rules to apply from 22 April 2009 for those who will be affected by the changes from 6 April 2011. These rules will restrict the higher rate tax relief on pension contributions and will apply in 2009/10 and 2010/11 to individuals whose relevant income is £150,000 or higher, who change their normal ongoing regular pension contributions (or who have not made regular contributions in the past) and whose total pension contribution exceeds £20,000 (gross).
This will remove the advantage to individuals of increasing their pension contributions in excess of their normal pattern before the new rules are introduced on 6 April 2011.
Relevant income is defined in the new rules as total income for the tax year or either of the previous two tax years before pension contributions, personal allowances or any other reliefs or deductions, less normal deductions for reliefs (such as trading losses and any gift aid deductions) and deductions for pension contributions but to a maximum of £20,000 gross. Where a salary sacrifice is entered into on or after 22 April 2009 for pension contributions this must be added back in the calculation of the relevant income.
All pension contributions, whether made personally, by their employer or any third party, for those individuals who will be affected by the new rules will be taken into account in calculating the overall gross pension contributions limit of £20,000.
Regular pension contributions will be the annual amount of an individual’s total gross contributions (including any employer contributions) to the scheme providing that the contributions were made at least quarterly or more often before 22 April 2009 and any increase in contributions that was agreed before 22 April 2009.
This does imply that if individuals make regular contributions once a year they would not qualify.
If you would like to discuss the above in more detail or to check how the changes may affect you personally, please do not hesitate to contact us.
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( 3 / 35 )The adult rate of the National Minimum Wage (NMW) will rise to £5.80 (£5.73) an hour in October 2009. This is payable to those age 22 and over.
The hourly youth development rate will increase to £4.83 (£4.77) and for 16 and 17 year olds to £3.57 (£3.53) an hour.
Penalties for non compliance
HMRC are able to charge penalties to those employers found to be in breach of the NMW rules.
From 6 April 2009, automatic penalties are levied on employers where HMRC officers find NMW arrears. The penalties range from £100 to £5,000 with 50% prompt payment discounts for employers who settle within 14 days of notification.
The penalty is payable in addition to arrears owed to the workers.
The penalty notice will detail the amounts due to workers (calculated according to the formula shown below) and any penalty due on those arrears. The penalty is calculated as half the total underpayment. The underpayments are uprated to take into account the length of time the arrears have been outstanding.
For each payment period the formula is:
Original underpayment x Current NMW rate = Arrears
Original NMW rate
In serious cases of non compliance the employer may be tried in a Crown Court and in those cases the fines are unlimited.
If you have any queries on the NMW please do get in touch.
Internet links: HMRC guidance on penalties and NMW news release
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( 2.9 / 31 )HMRC have won their case in the Court of Appeal as to the treatment of tips and service charges for bar and restaurant workers.
The court ruled in favour of HMRC in the National Minimum Wage (NMW) legislation case relating to tips, gratuities and discretionary service charges. The case concerned Annabel's restaurant and night club and others.
The ruling confirms that employers must pay their employees at least the NMW without taking into account tips, gratuities, service charges or cover charges, unless they are paid to employees through the employer's payroll.
The case means that Annabel's and others must now pay over £125,000 in arrears to their employees.
Annabel’s had operated a ‘tronc’ scheme which HMRC had argued did not count towards the necessary payment of the NMW. A ‘tronc’ scheme is sometimes used where restaurant or bar service charges are paid by the customer to the employer, but are then paid into a 'troncmaster's' bank account for distribution in accordance with a 'tronc' scheme agreed between the ‘troncmaster’ and employees.
The court decided that where a ‘tronc’ scheme is used the amounts distributed to workers are not paid by the employer and therefore could not be included in pay for NMW purposes.
Rt Hon Stephen Timms, Financial Secretary to the Treasury, said:
"The government's priority is to ensure that all workers are paid at least the national minimum wage. I am extremely pleased that the court has recognised HMRC's commitment to ensuring that tips are correctly and fairly distributed to the people who earn them. This is good news for bar and restaurant workers across the UK."
Internet link: Press release
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( 3.1 / 33 )The ability of UK employers to allow employees to opt out from the European Working Time Directive is set to continue. This means that, where employees wish, they will still be able to work more than 48 hours a week.
The European Parliament had wanted to scrap the opt out.
Employment Relations Minister Pat McFadden said:
"We refused to be pushed into a bad deal for Britain. We have said consistently that we will not give up the opt out and we have delivered on that pledge.
Everyone has the right to basic protections surrounding the hours that they work, but it is also important that they have the right to choose those hours.
In the UK and many other Member States, choice over working hours has operated successfully for many years. The current economic climate makes it more important than ever that people continue to have the right to put more money in their pockets by working longer hours if they choose to do so."
For more information on the operation of the working time regulations please visit the Business Link guidance below.
Internet links: Press release and Business Link guidance
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