Taxation & Social Security - January 2010

Penalties for late payment of employer and contractor PAYE
On 29 January 2010, HM Revenue & Customs published for external comment a draft order applying late payment penalties to certain National Insurance contributions. This works in conjunction with the PAYE Appointed Day Order (draft published on 23 December 2009), which becomes effective on the same day.
The draft order is available at: www.hmrc.gov.uk/drafts/sscregs2010.pdf
© Copyright Bizezia Limited, publisher of LEARNEZIA
-----------------------------------------------------------------------------------------------------------------------------------------
Latest survey finds deep anger over tax system among small firms
A poll carried out by the Forum of Private Business (FPB) published on 28 January 2010, found that more than two thirds of SME owners believe the tax burden placed on them is unfair - and over half think the tax system favours big companies. The research has been released just ahead of the 31 January 2010 tax payment deadline for submission of self-assessment forms on the HM Revenue and Customs website.

The research was compiled by canvassing owners of small and medium-sized businesses through the FPB's Tax and Budget Member Panel which serves as a dedicated, subject-specific opinion-taker:

  • An overwhelming 43% of respondents to the panel said 'fairness' should be the main priority for the tax system;
  • The next popular priority was 'simplicity', which was selected by one in five smaller businesses, echoing widespread anger with a system which is among the most complex in the world;
  • Additionally, 13% said they want to see the tax system reformed to make Britain more competitive internationally. And, in more general terms, 45% of respondents said their tax burden was a 'very serious' issue for their firms.

Source: www.fpb.org/news/2296/Latest_survey_finds_deep_anger_over_tax_system_among_small_firms.htm
© Copyright Bizezia Limited, publisher of LEARNEZIA
-----------------------------------------------------------------------------------------------------------------------------------------
Enterprise Investment Scheme and Venture Capital Trusts
On 28 January 2010, HMRC published a note informing that consultation on a proposed new condition for the venture capital schemes based on the EC Small Enterprise definition has been extended to 12 March 2010. 

A deadline of 1 February 2010 was originally set for comments on the draft legislation but in response to requests to allow more time for the consultation:

(1)    The deadline for the receipt of comments on the proposed new condition based on the EC Small Enterprise definition has been extended to 12 March 2010. The deadline for comments on the draft legislation making changes required for State aid approval remains 1 February 2010.

(2)    The Government's current intention is that any legislation to apply a new condition based on the EC Small Enterprise definition would only apply to money raised by VCTs or EIS Funds after a final announcement of the detail of any legislation. Money raised before then by a VCT or EIS Fund, but which is not invested until a later date, would not therefore be affected.
Source: http://www.hmrc.gov.uk/pbr2009/venture-capital-1260.htm
© Copyright Bizezia Limited, publisher of LEARNEZIA
-----------------------------------------------------------------------------------------------------------------------------------------
Residence and Domicile: foreign currency bank accounts
On 27 January 2010, HMRC published new guidance on the treatment of foreign currency bank accounts, including the extension of HMRC Statement of Practice 10/84 and a de minimis for foreign exchange calculations.

The Finance Act 2008 made a number of changes to the remittance basis tax rules and some changes to the tax residence rules. The changes can be found in sections 24 and 25 and Schedule 7 of the Finance Act 2008 - a brief summary of the changes is available at: www.hmrc.gov.uk/cnr/finance-act-2008.htm

HMRC has produced some new, and some replacement, guidance which reflects the 2008 Finance Act changes and other recent changes. Some wholly new guidance is being issued in some areas, such as domicile, to help people correctly self-assess their tax liability. HMRC will be introducing two new guidance manuals, the 'Residence, Domicile and Remittances' manual and the 'Transfer of Assets' manual:

  • The new guidance on the remittance basis forms part of the Residence, Domicile and Remittances manual. The new guidance on domicile will also be moved to that manual in autumn 2009. HMRC will be providing additional technical guidance on residence for incorporation in the new manual later in 2010;
  • The new guidance on the application of the remittance basis to the Transfer of Assets legislation will be moved to the new Transfer of Assets manual when it is published later in 2010.

Source: http://www.hmrc.gov.uk/cnr/res-dom-tax-amends.htm
© Copyright Bizezia Limited, publisher of LEARNEZIA
-----------------------------------------------------------------------------------------------------------------------------------------
Taxpayers could 'pay too much' after new IT system
On 25 January 2010, the Chartered Institute of Taxation (CIOT) urged HMRC to make taxpayers aware that they may be paying more tax than necessary due to incorrect tax coding notices being sent out.

Following the introduction of a new computer system in 2009 which was intended to simplify the system by combining information on people's National Insurance contributions and PAYE, it is suspected that large numbers of people have been allocated the wrong tax code, costing them hundreds of pounds.

CIOT claim that those with complex tax affairs, for example workers with more than one job, or separate sources of income are the most likely to be affected. As a result, by the time the new codes come into force into April 2010, incorrect codes will be applied by employers and pension companies thereby deducting too much tax through PAYE. It is thought that levels of overpayment could be as much as £108 a month, or £1,295 a year.

Around 25 million codes were sent out in the 2009/10 tax year, compared with 12 million in 2008/09, usually sent between the beginning of January and the first week of March.

Advice from HMRC is for taxpayers to check their codes and, if in doubt, query with HMRC before April 2010.
Source: http://www.tax.org.uk/showarticle.pl?id=8884
© Copyright Bizezia Limited, publisher of LEARNEZIA
-----------------------------------------------------------------------------------------------------------------------------------------
Government publishes proposals to enhance UK attractiveness to multinationals
On 26 January 2010, the Government published proposals for reforming the UK tax treatment of controlled foreign companies (CFCs).  The proposals, set out in a discussion document, are intended to enhance the competitiveness of the UK, while providing adequate protection of the UK tax base. The discussion document sets out the overarching framework of the new rules and proposals for how monetary assets and intellectual property could be treated.   

The controlled foreign company rules exist to protect the UK corporation tax base and apply in situations where UK groups move profits into low tax jurisdictions to avoid UK tax. This reform forms the second part of the foreign profits package. The first part was introduced in Finance Act 2009 and included an exemption for foreign dividends and an interest restriction measure.

The full discussion document and other CFC reform publications are available on the HM Treasury website. 
Full details available at: http://www.hm-treasury.gov.uk/press_08_10.htm 
© Copyright Bizezia Limited, publisher of LEARNEZIA
-----------------------------------------------------------------------------------------------------------------------------------------
New leaflet for the VAT and Excise wrongdoing penalty
On 25 January 2010, HMRC published a leaflet giving a simple summary of the new VAT and Excise wrongdoing penalty. It explains when we will apply the penalty, what can affect it, and what the customer should do to avoid it.

The new penalties are being introduced to help prevent abuse in the VAT and Excise tax systems.

What is the VAT and Excise wrongdoing penalty?~
Penalties are used to stop people, who don't take care, from gaining an unfair advantage.  From 1 April 2010, HMRC will apply new wrongdoing penalties where a person:

  • issues an invoice that includes VAT which the person is not entitled to charge;
  • handles goods on which Excise Duty has not been paid or deferred;
  • uses a product in a way that means more Excise Duty should have been paid;
  • supplies a product at a lower rate of Excise Duty knowing that it will be used in a way that means a higher rate of Excise Duty should be paid.

Source: http://www.hmrc.gov.uk/about/new-penalties/wrongdoing-penalty.pdf 
© Copyright Bizezia Limited, publisher of LEARNEZIA
-----------------------------------------------------------------------------------------------------------------------------------------
Post transaction valuation check (PTVC) procedures: Updated
On 22 January 2010, HMRC's Shares and Assets Valuation's (SAV's) updated their PTVC procedures.

Individuals and trustees can have the value of unquoted shares and goodwill checked by SAV if they wish. But, SAV can only do this:

  • after disposals relevant to Capital Gains Tax;
  • before the date you have to complete your Self Assessment tax return.

This is called a post transaction valuation check. If you wish to do this, you should complete form CG34 (which you can get from any HMRC Office or Enquiry Centre) and, for individuals, partnerships and personal representatives send it direct to the Capital Gains Team in Cardiff:
Taxpayers dealt with by the High Net Worth Units, Trust Offices or Public Department should continue to send CG34s to those offices. 

Where appropriate, SAV will check the details on your CG34 and let you know if it:

  • accepts the value you have provided;
  • requires further information from you;
  • suggests an alternative value to negotiate with you.

SAV's valuer will try to complete the valuation process quickly. However, sometimes it will not be possible to agree values before you have to send in your tax return, which must be done by the due date, whether or not SAV have completed the valuation check. 

You should enter the amount of the gain (or loss) that you expect SAV to agree from the valuation on your tax return.

Your Tax Office may have to give you formal notice that it is carrying out an enquiry, if:

  • SAV have not completed a post transaction valuation check
  • have not agreed the values within 12 months after the filing date of the tax return

Source: http://www.hmrc.gov.uk/shareschemes/shares-valuation.htm#7 
For more information on the PTVC process, go to: Working Together Bulletin 38 
© Copyright Bizezia Limited, publisher of LEARNEZIA
-----------------------------------------------------------------------------------------------------------------------------------------
2008-09 Penalties for outstanding PAYE Employer Annual Returns (P35 and P14s)
From 23 January 2010, HMRC will start to send penalty notices to employers if their records indicate that HMRC had not yet received the 2008-09 returns. The 2008-09 Employer Annual Returns (P35 and P14s) were due by 19 May 2009.

The penalty will be £100 per 50 employees for each month the return is outstanding, from 20 September 2009 to 19 January 2010. So, an employer with 50 or less employees will receive a £400 penalty. This penalty is in addition to those sent in September 2009.
Source: http://www.hmrc.gov.uk/employers/penalties220110.htm 
© Copyright Bizezia Limited, publisher of LEARNEZIA
-----------------------------------------------------------------------------------------------------------------------------------------
Corporation Tax: Summary of responses - compulsory online filing of Company Tax Returns
Following Lord Carter's "Review of HMRC Online Services", the Government announced proposals in the 2006 Budget to introduce

  • online filing of company tax returns using XBRL standard for all returns delivered after 31 March 2011 for accounting periods ending after 31 March 2010;
  • electronic payment of all Corporation Tax liabilities after 31 March 2011.

The consultation on draft regulations to implement these proposals was published on 7 May 2009, and concluded on 31 July 2009. The aim of the consultation was to ensure that the regulations, as drafted, will successfully implement the compulsory requirement for company tax returns. The consultation was run to provide customers, representative bodies and other interested parties with an opportunity to comment on the proposed changes.

The amended draft regulations have been laid before Parliament. The summary of responses received to the consultation on draft amendment legislation for the compulsory online filing of Company Tax Returns and electronic payment of Corporation Tax was published by HMRC on 22 January 2010.
Source: Summary of responses
© Copyright Bizezia Limited, publisher of LEARNEZIA
-----------------------------------------------------------------------------------------------------------------------------------------
Revenue & Customs Brief 02/10
Announcement on 22 January 2010 of HMRC's revised policy on Lennartz accounting following a ruling by European Court of Justice.

Taxpayers who are not permitted to use Lennartz accounting must apportion VAT incurred for both economic and non-economic activities on the basis of use and intended use from the date of this announcement.  However, HMRC will consider claims from taxpayers who have already entered into binding commitments for projects on the understanding that Lennartz accounting will be available.
Source: http://www.hmrc.gov.uk/briefs/vat/brief0210.htm
© Copyright Bizezia Limited, publisher of LEARNEZIA
-----------------------------------------------------------------------------------------------------------------------------------------
HMRCs old bank accounts are closing - make sure you use the new ones
During 2009 HMRC moved its banking services from the Bank of England to Citi and Royal Bank of Scotland Group. This meant that all HMRC bank sort codes and account numbers changed during 2009.

Although HMRC temporarily continued to accept payments made using the old Bank of England account details, this will change during 2010 when the old accounts will be closed. If you've not yet set up your payments to go to the new accounts please do so now - see below for more on how to do this. If you pay by Bank Giro, please make sure you use one of the newly issued payslips slips.

If you are paying HMRC by Direct Debit you don't need to do anything. Your Direct Debit instruction remains active. 

Return of payments made to old accounts
From 2010, if you make a payment using the old bank account numbers it may be returned. This could result in your payment reaching HMRC late, which in turn could lead to your being charged a late payment penalty, interest or surcharges. 

New account details for BACS Direct Credit, Internet/telephone banking or CHAPS
To check the new HMRC bank account details for payments by BACS Direct Credit, Internet/telephone banking or CHAPS please follow the link below and read the relevant guide for the type of tax or other payment you're making.
Source: HMRC Press Release 22/1/2010
The Paying HM Revenue & Customs: When and how to pay web page is available at: www.hmrc.gov.uk/payinghmrc/index.htm
© Copyright Bizezia Limited, publisher of LEARNEZIA
-----------------------------------------------------------------------------------------------------------------------------------------
More sports clubs should register for tax benefits
Thousands of amateur sports clubs across the UK are missing out on a share of tax savings running into millions of pounds according to Sports Minister Gerry Sutcliffe. On 21 January 2010, he said hHe wants more clubs to join the Community Amateur Sports Club (CASC) scheme so they will have more money to help drive a sporting legacy from 2012. 

The rallying cry comes as Sutcliffe visited the Stocksbridge Tennis, Rugby and Netball Clubs in Sheffield that are registered with the CASC scheme that has, according to figures produced by Deloitte, resulted in over £60 million worth of tax savings for sports clubs in the last seven years.  There are over 5,500 clubs currently registered with the CASC scheme.

CASC legislation came in via the 2002 Finance Act and enables amateur sports clubs that meet certain criteria to qualify for a number of tax advantages. These include:

  • Mandatory business rate relief for 80 per cent of the total business rates bill;
  • The potential to reclaim Gift Aid on donations from individuals - for every £1 donated clubs can claim an extra 25p tax refund from the government with an additional 3p per £1 available until April 2011;
  • Exemption from Corporation Tax on profits if their annual trading income is under £30,000 per year.

Clubs eligible are those that encourage participation in a qualifying sport, are open to the whole community, without discrimination, and ensure profits go back into the club, benefitting sport.    
Source: NDS - Department for Culture, Media and Sport  
© Copyright Bizezia Limited, publisher of LEARNEZIA
-----------------------------------------------------------------------------------------------------------------------------------------
Forthcoming changes to the car benefit rules
On 19 January 2010, HMRC published an updated car and car fuel benefit Internet calculator to allow calculations for 2010-11. The car benefit charge for a full year is obtained by multiplying the price of the car for tax purposes (in most cases, the list price plus accessories less capital contributions) by the 'appropriate percentage'. A more detailed guide is available for employees in the HS203 Self Assessment helpsheet at: www.hmrc.gov.uk/helpsheets/hs203.pdf and for employers in booklet 480 at: www.hmrc.gov.uk/guidance/480.pdf.

The information published records changes to the car benefit rules which take effect from 2010-11 onwards. It will be updated as further announcements are made in due course. 

Changes from 2010-11:

  • The lower threshold (the CO2 emissions figure which sets the 15 per cent rate) is reduced from 135 to 130 g/km.
  • The appropriate percentage for cars powered solely by electricity is reduced to 0 per cent for five years.

 Changes from 2011-12: The car benefit rules will be significantly simplified from 6 April 2011:

  • There will no longer be any reductions for alternative fuels (hybrids, bi-fuels and cars manufactured to run on E85 - types H, B and G).
  • The diesel surcharge will apply to all diesels (including type L diesels approved to Euro IV emissions limits and first registered before 1 January 2006).
  • Electric cars will still have an appropriate percentage of 9 per cent, but this will be given directly in primary legislation. The temporary reduction to 0 per cent until 2014-15 will continue to be given by secondary legislation.
  • The £80,000 limit for the price of a car for car benefit purposes will no longer apply.
  • The lower threshold (the CO2 emissions figure which sets the 15 per cent rate) will be reduced from 130 to 125 g/km.
  • The number of letters used to describe cars will therefore be reduced to three: E for electric-only cars (as at present), D for all diesels (current types D and L) and A for all other types (current types H, B, C, G, P).

 Changes from 2012-13:

  • The special rules for QUALECs (qualifying low emissions cars, those with CO2 emissions not exceeding exactly 120 g/km) will be abolished.
  • The lowest appropriate percentage will still be 10 per cent, but will apply to cars with CO2 emissions of up to 99 g/km. The rate for emissions of 100 g/km will be 11 per cent and will increase by 1 per cent for every 5 g/km to the current maximum of 35 per cent, as at present.

Changes from 2015-16:

  • The appropriate percentage for cars powered solely by electricity reverts to 9 per cent unless this figure is changed in any future announcement.

Source: www.hmrc.gov.uk/cars/rule-changes.htm
-----------------------------------------------------------------------------------------------------------------------------------------
Corporation Tax on Chargeable Gains
HMRC said that the value of the retail price index, as published by the Office for National Statistics, for December 2009 is 218.0 (January 1987 = 100).

Source and access to the full indexed rise to be used in calculating the indexation allowance in respect of assets disposed of in December 2009 available at: http://www.hmrc.gov.uk/rates/c_gains_subject_c_tax.htm#d
© Copyright Bizezia Limited, publisher of LEARNEZIA
-----------------------------------------------------------------------------------------------------------------------------------------
Draft Tax Regulations for Funds Investing in Non-Reporting Funds (FINROFs)
On 19 January 2010, HM Treasury issued draft regulations for FINROFs for comment. The draft regulations introduce a new tax regime to cater for changes to the investment powers of some authorised investment funds as proposed by the Financial Services Authority.
Source: http://www.hm-treasury.gov.uk/finrofs_draftregulations.htm
© Copyright Bizezia Limited, publisher of LEARNEZIA
-----------------------------------------------------------------------------------------------------------------------------------------
Company Residence revised guidance
On 19 January 2010, HMRC published revised guidance on treaty non-residence. It includes a revised version of INTM120070 and a new paragraph, INTM120075, covering with the interaction with self-assessment.
Source: http://www.hmrc.gov.uk/international/company-residence.htm
© Copyright Bizezia Limited, publisher of LEARNEZIA
-----------------------------------------------------------------------------------------------------------------------------------------
Draft Statutory Instrument - The Child Trust Funds (Amendment) Regulations 2010 (Opens new window)On 19 January 2010, OPSI published draft regulations to make Child Trust Fund payments to disabled children.  The regulations will come into force on 1 April 2010.
Source: http://www.opsi.gov.uk/si/si2010/draft/ukdsi_9780111490648_en_1
© Copyright Bizezia Limited, publisher of LEARNEZIA
-----------------------------------------------------------------------------------------------------------------------------------------
Updating Negligible Value List
On 18 January 2010, HMRC updated its Negligible Value List to 31 December 2009. There were no new Negligible Value agreements during December 2009.
Source: http://www.hmrc.gov.uk/cgt/negvalist.htm
© Copyright Bizezia Limited, publisher of LEARNEZIA
-----------------------------------------------------------------------------------------------------------------------------------------Dispensations: New HMRC Guide
On 18 January 2010, HMRC published a new guide dealing with dispensations.  A dispensation is a notice from HM Revenue & Customs (HMRC) that removes the requirement to report expenses and benefits to them at the end of the year on forms P11D or P9D. There is also no need to pay any tax or NICs on items covered by a dispensation. Once granted, dispensations last indefinitely. But HMRC reviews them regularly (usually at intervals of five years or less) to make sure that the conditions under which they were issued still apply.

The new guide explains how dispensations can remove the reporting requirements for certain expenses and benefits. It outlines the kinds of expense and benefit that can be included in a dispensation, and it also explains how to go about applying for one.
Source: http://www.hmrc.gov.uk/paye/exb/schemes/dispensation.htm
© Copyright Bizezia Limited, publisher of LEARNEZIA
-----------------------------------------------------------------------------------------------------------------------------------------
Excise: Modernisation and Compliance Checks: the next stage - Draft Legislation
On 13 January 2010, HMRC published a supplementary consultation paper with draft legislation and explanatory notes for the proposed compliance checking framework.

On 9 December 2009 further consultation was announced on developing a modernised framework of compliance checking powers for excise. The proposed framework covers record-keeping, information and inspection powers and increases in time limits for assessments and claims in respect of excise duties.

Those affected by the proposed legislation would be anyone involved in or likely to become involved in dealing with duties in alcohol, tobacco, energy products, gambling and air passenger duty.
The consultation document "Excise: Modernisation and Compliance Checks: the next stage" can be found at: http://www.hmrc.gov.uk/consultations/index.htm (under 'Current Consultations').
© Copyright Bizezia Limited, publisher of LEARNEZIA
-----------------------------------------------------------------------------------------------------------------------------------------
Time-to-pay arrangements top £4.3bn
On 13 January 2010, Accountancy Age reported that HMRC had allowed businesses to postpone an aggregate of £4.37bn of tax through "time to pay arrangements". This facility helps struggling companies as they battle to survive the recession:

  • As of 20 December 2009, the Business Payment Support Service had approved nearly 250,000 "time to pay arrangements" of which £3.33bn has been repaid so far;
  • The facility has been available to allbusinesses, including partnerships and LLPs, since it started in November 2008;
  • About 60% of the arrangements are for periods of three months or less.

Source: www.financialdirector.co.uk/accountancyage/news/2256058/pay-arrangments-top-3bn
© Copyright Bizezia Limited, publisher of LEARNEZIA
-----------------------------------------------------------------------------------------------------------------------------------------
ICAS calls for consistency from HMRC
On 13 January 2010, the Institute of Chartered Accountants of Scotland (ICAS) called for HM Revenue & Customs (HMRC) to be consistent in the application of tax rules across different sectors.

It comes as HMRC began a campaign aimed at dealing with non-compliance in the medical profession. This campaign, using new information powers, targets doctors' (and dentists') tax affairs and charges interest and a fixed 10 percent penalty on unpaid tax. The practice of targeting different sectors is expected to become the norm in the future.

By contrast, an HMRC campaign has also targeted the fish and chip shop owners in isolation but puts no restrictions on the penalties for non-compliance.

ICAS have stated that the criteria and penalties need to be consistent across all sectors for HMRC to gain acceptance of new measures.
Source: ICAS
© Copyright Bizezia Limited, publisher of LEARNEZIA
-----------------------------------------------------------------------------------------------------------------------------------------
Dairy Farmers of Britain Limited: Revenue & Customs Brief 01/10
On 14 January 2010, HMRC published Revenue & Customs Brief 01/10. It deals with Dairy Farmers of Britain Limited and the tax treatment on shares and debt owned by its members.

On 3 June 2009, Stephen Oldfield, Ian Green and David Kelly, from PricewaterhouseCoopers, were appointed joint receivers and managers of Dairy Farmers of Britain Limited. The purpose of the note published on 14 January 2010 is to discuss the tax treatment that will be available to the members of Dairy Farmers of Britain (DFB) in respect of their shares and debt in the company. This summary of the tax position is necessarily brief and omits some details. There is more detail in the 'Questions and Answers' on the HMRC website but if, after reading those, you are not certain how the rules apply to you, you may need to oprofessional advice.

The Brief focuses on the tax treatment of members who are individuals. The treatment of members who are companies is different in some important respects, in particular because there are special rules for the treatment of debt in computing profits for Corporation Tax purposes. For advice on losses arising to companies which are members of DFB, HMRC recommend contacting the company's agent or the tax office which deals with its Corporation Tax affairs.

The Brief covers:

  • Income Tax treatment
  • Treatment of shares in DFB
  • Types of debt for Capital Gains Tax purposes
  • DFB's debts
  • Loan Stock
  • Member's Liability Loans, the Member Capital Accounts and the Member Investment Accounts
  • Conversion of debt into 'A' Ordinary Shares 

The HMRC website (see address below) has further useful information in a Q&A format.
Source: www.hmrc.gov.uk/briefs/cgt/brief0110.htm
© Copyright Bizezia Limited, publisher of LEARNEZIA
-----------------------------------------------------------------------------------------------------------------------------------------
List of registered Community Amateur Sports Clubs
On 12 January 2010, HMRC published an updated list of registered CASC's.
The list is available at: www.hmrc.gov.uk/casc/clubs.pdf
© Copyright Bizezia Limited, publisher of LEARNEZIA
-----------------------------------------------------------------------------------------------------------------------------------------
Self Assessment deadline
Additional guidance for tax agents and advisers to help manage the 31 January Self Assessment deadline was published by HMRC on 12 January 2010.
Read the guidance at: www.hmrc.gov.uk/NEWS/agents-sa-31jan.htm
© Copyright Bizezia Limited, publisher of LEARNEZIA
-----------------------------------------------------------------------------------------------------------------------------------------
Corporation Tax - Detailed HMRC directions under the new regulations
On 12 January 2010, HMRC published directions applying to filing Company Tax Returns and paying Corporation Tax, late payment interest and late filing penalties. They came into force on 11 January 2010 and set new rules for returns and payments from 1 April 2011.
Further information: www.hmrc.gov.uk/ebu/mandatory-online-filing.pdf
© Copyright Bizezia Limited, publisher of LEARNEZIA~
-----------------------------------------------------------------------------------------------------------------------------------------
Tariff preference: Changes to arrangements regarding imports from Israel
On 12 January 2010, HMRC published changes to the arrangements applicable to imports into the European Community of agricultural products, processed agricultural products and fish and fishery products originating in the State of Israel.
Further information is available at: Tariff preference: Changes to arrangements regarding imports from Israel
© Copyright Bizezia Limited, publisher of LEARNEZIA
-----------------------------------------------------------------------------------------------------------------------------------------
Statutory payment rates: 2010-11
On 13 January 2010, HMRC announced the statutory payment rates for 2010-11.

Changes for 2010-11

Employers may have to pay employees statutory sick pay (SSP), statutory maternity pay (SMP), statutory paternity pay (SPP) or statutory adoption pay (SAP). The following statutory payment rates have been announced for 2010-11. However these rates are still subject to parliamentary approval.

  • SSP: £79.15 per week (this remains unchanged from 2009-10);
  • SMP: Six weeks at 90% of the employee's average weekly earnings followed by a further 33 weeks at £124.88 per week or 90% of average weekly earnings - whichever is lower;
  • SPP: One or two weeks' at £124.88 per week or 90% of average weekly earnings - whichever is lower. If the employee opts to take two weeks' leave, they must be taken together;
  • SAP 39 weeks at £124.88 per week or 90% of weekly earnings - whichever is lower. 

For employees earning £97 or more per week in 2010-11, the above rate of SSP will apply from 6 April 2010, and for SMP, SPP and SAP the above rates will apply for complete pay weeks commencing on or after 4 April 2010 (the first Sunday in April). 

Because the rate of SSP remains unchanged the daily rate table in the 2009-10 edition of the employer helpbook E14 can continue to be used until the 2010-11 edition is published. 

The threshold for recovery of SSP under the percentage threshold scheme remains unchanged from last year at 13 per cent.

From 6 April 2010 employers who do not qualify for small employers' relief can recover 92 per cent of the SMP, SAP and SPP paid to their employees.

From 6 April 2010 employers who do qualify for small employers relief can recover 100 per cent of the SMP, SAP and SPP paid to their employees, plus 4.5 per cent compensation for the additional National Insurance Contributions (NICs). These figures are unchanged from last year. 

For the 2010-11 tax year, a small employer is an employer who has paid or was liable to pay total gross Class 1 NICs of £45,000 or less in the individual employees qualifying tax year. This is unchanged from last year.
Source: www.hmrc.gov.uk/NEWS/statutory-payment-rates.htm and Business Link
-----------------------------------------------------------------------------------------------------------------------------------------
Reciprocal preferential trade agreement between the EC and Serbia

On 11 January 2010, HMRC announced the entry into force on an interim basis on 1 February 2010 of a new reciprocal preferential trade agreement between the European Community and Serbia.
Source: Tariff Preference: Interim trade agreement between the EC & Republic of Serbia
© Copyright Bizezia Limited, publisher of LEARNEZIA
-----------------------------------------------------------------------------------------------------------------------------------------
Customs Civil Penalties
On 11 January 2010, HMRC announced amendments to The Customs (Contravention of a Relevant Rule) Regulation 2003 - Customs Civil Penalties. 

It took effect on 24 December 2009 and runs until to 31 March 2010.
Source: Amendment to Customs Civil Penalties
© Copyright Bizezia Limited, publisher of LEARNEZIA
-----------------------------------------------------------------------------------------------------------------------------------------
Illegal, Unreported & Unregulated (IUU) fishing regulation customs formalities
On 11 January 2010, HMRC announced information on Customs import and export procedures for fish products.

It affects all importers and exporters of fish and fish products, freight agents and freight forwarders who handle such imports and exports, staff at the National Clearance Hub and took effect from 1 January 2010.
Source: IUU Fishing Regulations
© Copyright Bizezia Limited, publisher of LEARNEZIA
-----------------------------------------------------------------------------------------------------------------------------------------
Temporary problem with issue of Payslip Booklets for 2009-2010
If you are an employer and currently pay your PAYE and National Insurance using a Payslip booklet you may be affected by the announcement from HMRC on 11 January 2010.

HMRC temporarily cannot issue PAYE Payslip Booklets for the tax year 2009-10 because they are issuing the bulk of booklets for 2010-11. This problem will affect customers between the following dates depending on which Accounts Office they are linked to:

  • Shipley Accounts Office - 4 January 2010 to 29 January 2010
  • Cumbernauld Accounts Office - 25 January 2010 to 19 February 2010

2009-10 booklet issue will resume as normal after the above dates. 

Customers who have a payment to make before these dates who do not have a payslip (or payslip booklet) should use the online facilities to make payment. HMRC recommend that payment is made online as this is the safest, quickest and most secure method. You can also tell HMRC online that no payment is due; again you do not need a payslip.
Further information on how to pay and to let us know that no payment is due can be found by visiting the page: How to pay PAYE/Class 1 National Insurance contributions
Source:  www.hmrc.gov.uk/employers/payslip-booklets.htm
© Copyright Bizezia Limited, publisher of LEARNEZIA
-----------------------------------------------------------------------------------------------------------------------------------------
Qualifying Recognised Overseas Pension Schemes (QROPS)
On 11 January 2010, HMRC published a list of Qualifying Recognised Overseas Pension Schemes (QROPS) that have consented to have their details published - not all QROPS will necessarily feature within it.

This list is based on information provided to HMRC by schemes when applying to be a QROPS. As part of its application the scheme notifies HMRC that it fulfils the requirements for being a "recognised overseas pension scheme". Publication on the list should not be seen as confirmation by HMRC that it has verified all the information supplied by the scheme in its application.
Source:  www.hmrc.gov.uk/pensionschemes/qrops.pdf 
© Copyright Bizezia Limited, publisher of LEARNEZIA
-----------------------------------------------------------------------------------------------------------------------------------------
Corporation Tax - HMRC recognised commercial software
On 11 January 2010, HMRC published a list of HMRC recognised commercial software that is compatible with the new Corporation Tax Online service. These can be used to file Company Tax Returns including accounts and computations online in the statutory iXBRL data standard. 

The information published by HMRC is a guide to third party software suppliers that have tested with them and provided evidence that they have developed software that can produce one or more element of a Company Tax Return, including Accounts and Computations, in the statutory iXBRL data standard. Other features of the software listed have not been tested, including usability and security, and users must therefore ensure that their software of choice meets their full filing requirement. 

A number of software suppliers are still currently testing their products with HMRC. When they have tested successfully and provided the required evidence, they will be added to the HMRC list.
Source:  http://www.hmrc.gov.uk/efiling/ctsoft_dev.htm
© Copyright Bizezia Limited, publisher of LEARNEZIA
-----------------------------------------------------------------------------------------------------------------------------------------
Medical professionals offered Tax Health Plan
On 10 January 2010, HM Revenue & Customs (HMRC) announced that medical professionals are being encouraged under a new Tax Health Plan to tell HMRC if they have understated income. Those who contact HMRC by 31 March 2010 to make a voluntary disclosure will be able to put their tax affairs in order simply and on the best available terms.

After 31 March 2010, using information it holds about how much is paid to them, HMRC will carry out targeted investigations aimed at medical professionals who have not come forward. Substantial penalties or even criminal prosecution could follow for those who have undeclared tax liabilities. 

The Health Plan is the first initiative in a new HMRC campaign focused on professionals. It is designed to make it easy for customers to put their tax affairs right and keep them that way.

The aim is to make it as easy as possible for people to come forward, make a full disclosure and benefit from the certainty of a reduced 10 per cent penalty that HMRC is making available to those who qualify for this opportunity.

The Health Plan will operate in two stages:

  • From 11 January to 31 March 2010, medical professionals can register their intention to make a voluntary disclosure with HMRC.
  • By 30 June, those who have registered must have made their disclosure as well as arrangements to pay all tax interest and penalties due.

To notify your intention to make a disclosure:

The benefits of the Tax Health Plan are that you can avoid the possibility of:

  • a penalty of up to 100 per cent of the tax due,
  • an investigation resulting in criminal prosecution.

HMRC has prepared a list of Frequently Asked Questions (FAQs) at: www.hmrc.gov.uk/tax-health-plan/thp-faqs.pdf to explain THP in more detail and answer general questions. New FAQs emerging, if any, will be added to the FAQ page.
Source: http://nds.coi.gov.uk/content/detail.aspx?NewsAreaId=2&ReleaseID=410208&SubjectId=2 and www.hmrc.gov.uk/tax-health-plan/index.htm
© Copyright Bizezia Limited, publisher of LEARNEZIA
----------------------------------------------------------------------------------------------------------------------------------------
Fleming Guidance
On 7 January 2010, HMRC published supplementary internal notes (these run to over 70 pages) on certain types of claims - these are used by HMRC officers alongside main Fleming guidance.

The European Court of Justice (ECJ) case Kretztechnik AG v Finananzamt Linz c-465-03 (26.5.2005) established that the issue of shares by a public limited company in return for capital invested is not a supply for VAT purposes. In that case the VAT incurred on associated costs was residual input tax because the share issue was carried out by Kretztechnik in order to increase its capital for the benefit of its economic activity in general. As Kretztechnik only made taxable supplies, the input tax was fully recoverable. The subsequent case of Securenta (C-437/06) indicated that a share issue was not automatically connected with taxable supplies, but could also be made to fund a non-economic purpose as well, and in that case a business/non-business apportionment was also needed. Where the business was partly exempt then a proportion, as determined by the partial exemption method in place at the time, could be recovered, HM Revenue & Customs (HMRC) BB12/05 S4 refers. HMRC BB 21/05 S3 subsequently confirmed that as well as cases identical to Kretztechnik the issue of other securities in return for investment capital should also follow the Kretztechnik ruling.
Source: www.hmrc.gov.uk/menus/fleming-kretztechnik.pdf
© Copyright Bizezia Limited, publisher of LEARNEZIA
-----------------------------------------------------------------------------------------------------------------------------------------
New guidelines on completing customs documents released
On 8 January 2010, HM Revenue and Customs (HMRC) published in January 2010 new guidelines for completing customs documents. The notice cancels and replaces Notice 144 April 2008. Details of any changes to the previous version can be found in paragraph 1.1 of the notice.

The notice is intended to give general guidance to postal importers of trade consignments for which a declaration (entry) on a Single Administrative Document (SAD) is required. Further information on the completion of SAD forms is contained in the Integrated Tariff of the United Kingdom (the Tariff).
Source and access to full report available at: HM Revenue and Customs
© Copyright Bizezia Limited, publisher of LEARNEZIA
-----------------------------------------------------------------------------------------------------------------------------------------
How to help your employees with Childcare
On 4 January 2010, HMRC published amendments to employer help-book E18. It provides updated guidance to reflect recent changes to qualifying childcare.
Source: http://www.hmrc.gov.uk/helpsheets/e18.pdf
© Copyright Bizezia Limited, publisher of LEARNEZIA
-----------------------------------------------------------------------------------------------------------------------------------------
Paying for Childcare - getting help from your employer
On 4 January 2010, HMRC published amendments to HMRC leaflet IR115 - 'Paying for Childcare - Getting Help From Your Employer'. It provides Updated guidance to reflect recent changes to qualifying childcare.
Source: www.hmrc.gov.uk/leaflets/ir115.pdf
-----------------------------------------------------------------------------------------------------------------------------------------
The 'Hidden Economy' review
On 5 January 2010, the Hidden Economy Advisory Group formed from independent experts and chaired by HM Revenue & Customs (HMRC) is to review the hidden economy and what can be done to reduce it. This new group of experts will identify new practical steps to tackle the problem.

It is estimated that the hidden economy contributes to around 7.5% of the net tax gap, which means the UK could be losing around £3bn a year from people who are living and working in the hidden economy but paying no tax.

The group will endeavour to understand the behaviours, attitudes and circumstances of those working in the hidden economy and then identify the incentives and deterrents to encourage them to move into the formal economy and make recommendations to HMRC.

The new Hidden Economy Advisory Group was announced as part of the 2009 Pre-Budget Report. It will present initial findings in time for Budget 2010.
Source: HRMC NAT 03/10
© Copyright Bizezia Limited, publisher of LEARNEZIA
-----------------------------------------------------------------------------------------------------------------------------------------
Free help and advice for employers and the self-employed
On 5 January 2010, HMRC announced the offer of help to businesses during the month of January with its programme of free workshops to locations throughout Northern Ireland.

Aimed at employers, sole traders & those in partnerships, the workshops will offer advice on subjects such as how to complete the Self Assessment return to how to pay Statutory Sick Pay.

The HMRC Advice Team are available on 0845 603 2691.  Further workshops will take place in February, details of which will be released at the end of January.
Source and access to full report available at: HRMC Newsfeed
© Copyright Bizezia Limited, publisher of LEARNEZIA
-----------------------------------------------------------------------------------------------------------------------------------------
Changes to personal import allowances
HMRC announced on 4 January 2010 an increase to the value of goods that travellers can personally bring into the UK from a non-EU country. The increase also applies to the amount of goods received through the post without needing to pay customs duty.

The changes came into effect on 1 January 2010 and include:

  • Travellers arriving in the UK by commercial sea or air transport from a non-EU country can now bring in up to £390 worth of goods for personal use. Those arriving by other means, including by private plane or boat for pleasure purposes, can bring in goods up to the value of £270;
  • Individuals who buy goods over the internet or by mail order from outside the EU will now only be charged customs duty if the value of the package is above £135, and the actual amount of duty due is over £9;
  • Although the duty limits have changed, import VAT is still due on packages valued at over £18. However, if a package is received as a 'gift', VAT will only now be charged if its value exceeds £40.

The duty-free limits for imports of alcohol and tobacco products from outside the EU have not changed. Individuals travelling from the Member States of Bulgaria, Romania. Lithuania and Estonia can now bring back unlimited amounts of tobacco products, bringing them into line with the other Member States.
Source and access to full report available at: HRMC NAT 02/10
© Copyright Bizezia Limited, publisher of LEARNEZIA
-----------------------------------------------------------------------------------------------------------------------------------------
VAT Notice 725
Revised notice 725 was published by HMRC on 31 December 2009. This notice cancels and replaces Notice 725 (January 2007).

This notice explains the way VAT is charged and accounted for on movements of goods within the EC Single Market and how businesses should account for VAT on goods they buy from other EC Member States.
Source: HMRC Notice 725
© Copyright Bizezia Limited, publisher of LEARNEZIA
-----------------------------------------------------------------------------------------------------------------------------------------
FAQ: Import & Export - Customs Duties and VAT
On 31 December 2009, HMRC announced that, following the annual revalorisation of the Euro, new fiscal limits when importing goods take effect from 1 January 2010.
Source: FAQ: Import & Export
© Copyright Bizezia Limited, publisher of LEARNEZIA
-----------------------------------------------------------------------------------------------------------------------------------------
Standard rate of VAT returns to 17.5%
With effect from 1 January 2010 the temporary reduction in the standard rate of VAT (to 15%) ended and it has reverted to 17.5%.
Source: www.hmrc.gov.uk/vat/forms-rates/rates/rate-changes.htm
© Copyright Bizezia Limited, publisher of LEARNEZIA
-----------------------------------------------------------------------------------------------------------------------------------------
Cross-Border VAT Changes 2010
On 1 January 2010 the VAT rules for cross-border supplies of services changed. These affect place of supply, EC Sales lists (ESLs) requirement for certain services, timescales for all ESLs and the system for reclaiming VAT from other EU countries.

Businesses that will be affected by the changes are those:

  • supplying services to overseas businesses;
  • receiving services from overseas businesses;
  • supplying goods to other EC countries;
  • that want to reclaim VAT incurred in another EC country.

From 1 January 2010 most services provided to business customers will be treated as supplied in the country where the business customer is established, and the business customer will account for VAT under the reverse charge mechanism.  Services provided to non-business customers will still generally be liable to VAT in the country of the supplier. As now, there will be changes to these general rules.  The changes will be phased in on 1 January 2010, 1 January 2011, 1 January 2013 and 1 January 2015. 

Notice 741A - Place of supply of services explains the new rules which take effect from 1 January 2010 to determine the place of supply of your services and who must account for VAT on the supply of those services.
Source: www.hmrc.gov.uk/vat/cross-border-changes-2010.htm
© Copyright Bizezia Limited, publisher of LEARNEZIA