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The new State Pension

26 Jul, 2017

The new State Pension is payable to those that reach the State Pension age on or after 6 April 2016. The full new State Pension is currently £159.55 per week and is payable to eligible women born on or after 6 April 1953 and eligible men born on or after 6 April 1951. Retirees that reached the State Pension age before 6 April 2016 will continue to receive the State Pension (not the New State Pension) under the old rules.

Credit card transaction charges to be banned

26 Jul, 2017

The EU second Payment Services Directive (PSDII) was approved by the European Parliament and European Council in December 2015 and seeks to widen the scope of the existing EU Payment Service Directive (PSD) that defines the information that consumers and businesses must receive when making payments. This includes making reforms to the way payments by debit and credit cards, direct debit, credit transfers, standing orders and other digital payments are transacted. 

Tax credit renewal final reminder

26 Jul, 2017

This coming Monday (31 July) is the last day for families and individuals that receive tax credits to renew their tax credit. As in previous years, there is expected to be a huge last-minute rush and it may be difficult to contact HMRC by phone.

Claims can be renewed by post, phone or online. A press release from HMRC released on 24 July highlighted that almost one million renewals were outstanding. According to HMRC the online renewal process has been improved and now allows taxpayers to track the process of their renewal, and receive email confirmation once submitted.

PAYE tax refunds and underpayments

26 Jul, 2017

HMRC’s annual reconciliation of PAYE for the tax year 2016-17 is well under way. HMRC uses salary and pension information to calculate if the correct amount of tax has been paid. Where the incorrect amount of tax has been paid, HMRC uses the P800 form to inform taxpayers of any under or over payments. The forms currently being sent show HMRC’s tax calculations in respect of the tax year ending 5 April 2017. HMRC expects to send all P800 forms by the end of October 2017.

Directors, beware minimum wage legislation

26 Jul, 2017

We have recently considered some of the issues surrounding various tax efficient strategies for paying director shareholders. One aspect of this complex area that we have not yet examined is whether company directors need to be concerned with employment legislation in relation to the minimum wage.

At the most basic level, company directors who do not have a contract of employment are defined as office holders. Office holders are neither employees nor workers. Directors who are considered to be office holders do not qualify to receive the National Minimum or Living Wage.

Making Tax Digital – common sense prevails

20 Jul, 2017

A new timetable for the introduction of Making Tax Digital (MTD) has been announced. The new regime was due to start from April 2018, but was delayed by the snap general election earlier this year. The government now appears to have listened to concerns that the roll-out of the MTD was moving too fast. The original proposals would have required most businesses to upload quarterly figures to HMRC.

Under the new implementation plan these obligations have been substantially changed. They are:

Gift Aid donations only available to taxpayers

20 Jul, 2017

The Gift Aid scheme is available to all UK taxpayers, but in order to sign up to the Gift Aid scheme when you make a donation, you must be paying UK income tax.

There are clear advantages for charities if you make your donation in this way. The charity or Community Amateur Sports Clubs (CASC) concerned can take your donation and, provided all the qualifying conditions are met, can reclaim the basic rate tax, which means that the value of your donation increases by 25p for every pound donated to charity.

Changes to deemed domicile rules

20 Jul, 2017

In July 2015, the then Chancellor George Osborne announced a series of reforms to the non-domicile rules. The new rules were due to come into effect from April 2017, but were removed from the cut-back Finance Bill that was rushed through parliament before the general election. It has now been announced that the necessary legislation to introduce these reforms will be included in the new Finance Bill to be published after the summer recess and that these measures will have retroactive effect from April 2017 as originally intended.

Employed or self-employed?

20 Jul, 2017

Working out whether you are an employee or self-employed can be a tricky business and HMRC’s view can sometimes be at odds with status defined under employment law.

Clearly, although not always, there are tax and NIC advantages for you and the business that contracts for your services if you are treated as self-employed as opposed to employed. However, you may have more rights - holiday pay for example - if you are employed rather than self-employed.

New Finance Bill to be published

20 Jul, 2017

The government has confirmed that a new Finance Bill will be introduced as soon as possible after the summer recess. The House of Commons returns to Westminster on 5 September 2017.

In a joint press release from HMRC and HM Treasury we are told that the new Finance Bill will legislate for all policies that were included in the pre-election Finance Bill but not included in the Act that was rushed through Parliament before the snap election.

Class 1 NICs zero rate band

20 Jul, 2017

Many director shareholders take a minimum salary and any balance of remuneration as dividends. This tends to reduce National Insurance Contributions (NICs), and in some cases Income Tax. The planning strategy is to pay a salary at a level that qualifies the director for State benefits, including the State Pension, but does not involve payment of any NICs.

Online filing exclusions for 2016-17

13 Jul, 2017

HMRC’s list of exclusions from online filing for 2016-17 continues to multiply. The list of exclusions has been updated with the publication of version 4.0 of the document. There are now a total of 32 live exclusions on the list including 5 new additions to the list.