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NMW and LW penalties for non-compliance

06 Jul, 2017

There are penalties for employers who don’t pay staff what they are legally entitled to under the National Minimum Wage (NMW) and National Living Wage (NLW) rates.

Employers who have paid a worker below the correct minimum wage must pay any arrears immediately. If not, there are penalties for non-payment of up to 200% of the amount owed, unless the arrears are paid within 14 days. The maximum fine for non-payment can be up to £20,000 per employee and employers who fail to pay, face a possible 15-year ban from being a company director.

Bricklayer turned accountant is jailed

06 Jul, 2017

An Essex based financial adviser has admitted tax fraud and has been jailed for five years. He set himself up as tax adviser despite having no financial qualifications. He had previously worked as a bricklayer and his clients were mainly made up of crane drivers, builders and other construction industry workers.

Taxman and the shed

06 Jul, 2017

One of the most often used and valuable of the Capital Gains Tax (CGT) exemptions covers the sale of the family home. In general, there is no CGT payable on the sale of a property which has been used as the main family residence. An investment property which has never been used will not qualify. This relief from CGT is commonly known as private residence relief (PRR).

Directors may not have to file a tax return

06 Jul, 2017

A recent First Tier Tribunal case examined whether a company director had an obligation to submit a Self Assessment tax return without receiving a notice to file. The taxpayer in question appealed against penalties totalling £1,300 relating to his 2014-15 Self Assessment return on the basis that he had a reasonable excuse for his appeal.

No benefits but still need to file a form?

06 Jul, 2017

As many of our readers will be aware, new payroll legislation on the treatment of certain business expenses and benefits came into effect from 6 April 2016. One of the main changes was the removal of the requirement for employers to report certain expenses paid to employees (whether deductible or not) on form P11D at the end of the tax year.

What is the best way to extract funds from your company?

28 Jun, 2017

Director shareholders are wont to ensure that they pay the lowest amount of tax and NIC consistent with their obligations under the relevant legislation. For many years, director shareholders have followed a high dividend, low salary extraction strategy. This tended to reduce Income Tax and NIC contributions. The dividend changes that came into effect in April 2016, took some of the shine off this strategy, but taking dividends in preference to salary is still effective.

Are pension benefits received taxable?

28 Jun, 2017

As our readers are most likely aware, there are special rules which allow individuals who set up private pension scheme(s) to benefit from significant tax reliefs when saving for their retirement. There is no overall limit to the amount of employer or employee contributions and no upper limit to the total amount of pension saving that can be built up. However, there are important limits that affect the tax reliefs available.

Swapping salary for pension benefits

28 Jun, 2017

Employers and employees may have noticed that HMRC has clamped down on the tax and NIC benefits of some aspects of salary sacrifice schemes. The changes are being rolled out gradually from April 2017, and will affect a number of employees who have sacrificed part of their salary for benefits and are currently paying less tax and NIC as a result.

For the time being, all arrangements in place before April 2017 will be protected for up to a year, and arrangements in place before April 2017 for cars, accommodation and school fees will be protected for up to 4 years.

Tax-free employee suggestion schemes

28 Jun, 2017

Do you have an employee suggestion scheme in place? There are still commercial and tax advantages to setting up such a arrangement. HMRC offers two tax-free award schemes that can be made available to employees:

Implementing a Cycle to Work Scheme

28 Jun, 2017

The Cycle to Work scheme was introduced in 1999 to help promote a healthy commute to work.

The scheme allows employers to provide (technically loan) bicycles and cyclists’ safety equipment to employees as a tax-free benefit. Where the scheme conditions are satisfied, employees can benefit from a tax and National Insurance Contributions (NICs) reduction of between 32% and 42% through a salary sacrifice arrangement; there are also possible employer NIC savings.

Tax Diary July/August 2017

27 Jun, 2017

1 July 2017 - Due date for Corporation Tax due for the year ended 30 September 2016.

6 July 2017 - Complete and submit forms P11D return of benefits and expenses and P11D(b) return of Class 1A NICs.

19 July 2017 - Pay Class 1A NICs (by the 22 July 2017 if paid electronically).

19 July 2017 - PAYE and NIC deductions due for month ended 5 July 2017. (If you pay your tax electronically the due date is 22 July 2017)

19 July 2017 - Filing deadline for the CIS300 monthly return for the month ended 5 July 2017.

What does the Queen’s Speech mean for employment law?

27 Jun, 2017

With the General Election having returned a minority government and with the government’s priority being to legislate for Brexit, a rather more modest agenda for employment law reform was outlined in the Queen’s Speech 2017 than originally may have been envisaged. Parliament will also sit for two years instead of the ordinary one year, to give MPs sufficient time to consider the laws required to prepare the UK for Brexit. This means there will not be a Queen’s Speech in 2018.

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