19th June: 5th June PAYE, Student Loan and CIS Deductions Are Due
Employers who have made PAYE deductions, and contractors who have used CIS to pay subcontractors need to pay attention to this deadline.
Employers need to make payments for income tax, NI, and student loan deductions to HMRC. Meanwhile contractors need to pay HMRC the tax deductions from subcontractors under CIS.
Any electronic payment needs to be cleared by Friday 21st June. “Faster Payments” need to clear by Saturday 22nd June. Failure to do so may result in penalties being applied.
Minimum Wage Regulation Non-Compliance
Findings from a recent Low Pay Commission report have revealed that 439,000 workers are still being paid less than the National Minimum Wage (NMW). The report shows that 369,000 of these employees paid less than the National Living Wage - an increase over previous years - were aged either 25 or over.
From 1 April 2019, the rates rose as follows:
Minimum wage rate
Hourly rate from 1 April 2019
National Living Wage (for workers aged 25 and over)
21-24 year-old rate
18-20 year-old rate
16-17 year-old rate
£7.55 per day: £52.85 per week
The report has also revealed that women are “more likely” to be paid less than men for the National Minimum Wage. It is also more likely that young people and older workers will be paid less than the NMW. The sectors where it is most common are:
The Chair of the Low Pay Commission, Bryan Sanderson, said:
“Our analysis reveals a worrying number of people are being paid less than the minimum wage. We recently celebrated 20 years of the minimum wage – it has raised pay for millions of workers, but it is essential that people receive what they are entitled to.
“It is also vital for businesses to be able to operate on a level playing field, and not be illegally undercut on wages.”
Company Car Fuel Rates
Guidance for new company car fuel rates, that will take effect from 1 June 2019, have stated that “You can use the previous rates for up to one month from the date the new rates apply”.
New company car advisory fuel rates are as follows:
1400cc or less
1401cc - 2000cc
1400cc or less
1401cc - 2000cc
1600cc or less
1601cc - 2000cc
These rates are only to be used in the following cases:
● to reimburse employees that have undertaken business travel in their company car
● To seek reimbursement from an employee for fuel used in private travel.
As far as fully electric cars are concerned, the Advisory Electricity Rate is 4 pence per mile.
Consultation on Ancillary Capital Gains Reliefs
If you have sold a residence that had been used as your sole or main residence, a capital gains tax (CGT) exemption will apply under the Private Residence Relief (PRR). As long as the relevant conditions are in play throughout ownership the exemption will apply. This exemption is supported by other types of relief that address other cases related to this.
Two ancillary reliefs had that had been announced and legislated for by the government to target owner-occupiers with PRR, are:
● reducing the final period exemption from 18 months to 9 months,
● and the reformation of lettings relief to only be relevant when an owner is sharing a residence with a tenant.
April 6th, 2020 is when these changes are due to come into force. Meanwhile the government is consulting on these changes, inviting opinions on PRR rules.
Companies House Reforms
A consultation has been launched by the government regarding reforms of Companies House. The consultation aims to extend “greater protection from fraud” to business owners.
The government’s consultation intends to tackle misuse of the register by:
● identifying the persons setting up, managing and controlling companies
● helping to prevent the abuse of corporate entities
● improving the data held on the companies register
● securing personal information
Companies House Chief Executive, Louise Smyth, has said: “This package of reforms represents a significant milestone for Companies House as they will enable us to play a greater part in tackling economic crime, protecting directors from identity theft and fraud, and improving the accuracy of the register.”
Welsh Income Tax Confusion
New income tax codes have been assigned to Welsh taxpayers from April 2019. They begin with C. However, it has come to light that Welsh taxpayers have mistakenly been allocated Scottish income tax codes by their employers. This means that Welsh taxpayers have been paying income tax with Scottish income tax rates and bands.
Overall, the tax paid by Welsh taxpayers is in line with that paid by English and Northern Irish taxpayers, with rates and bands ranging from 20% to 45%. In Scotland tax rates and bands range from 19% to 46%.
The full impact of the mistake is not yet clear but HMRC will review how the Welsh tax codes work in June 2019.
Chair of the National Assembly for Wales’ Finance Committee, Llyr Gruffydd, has said: 'We raised concerns about the flagging process for identifying Welsh taxpayers during our enquiries into fiscal devolution and the Welsh government's draft budget.
“On each occasion, we were told the matter was in hand, and the lessons from the devolution of income tax powers to Scotland, where there were similar issues, had been soundly learned and would be put into effect. We are seeking an immediate explanation of how this has happened and will be asking representatives from HMRC to appear before this Committee in the near future.”
Reporting Employee Benefits With the Forms P11D
The forms P11D are used to list the benefits and expenses afforded employees and directors are due to be submitted to HMRC by 6 July 2019. If this applies to you it is important to get this process underway as the collection of all relevant information can take some time. Employers who run the benefits through their payroll do not need to use the forms P11D.
HMRC has created a toolkit to help with the reporting of these expenses and benefits. This includes access to a handy checklist that helps employers to ensure that the forms are being completed correctly.
Dishonest Dog Breeders Hounded by HMRC
More than £5m has been recovered by an HMRC taskforce dedicated to tackling the sale of black market puppies by dishonest dog breeders. Animal welfare groups weighed in during discussions with HMRC that led to the debut of the taskforce in October 2015.
Puppies are being sold on the black market on a mass scale and at a huge profit, failing to declare sales and pay taxes. 257 cases have led HMRC to recover £5,393,035 since October 2015, using civil and criminal enforcement powers.
Tax bills handed out include:
● A former Crufts judge in the Midlands: £157,000
● A Northern Ireland dealer: £185,000
● A puppy breeder in Swansea: £110,000
● A Somerset puppy breeder: £114,000
● An East Scotland dealer: £400,000
Mel Stride MP, and Financial Secretary to the Treasury, has said: “It is utterly appalling that anyone would want to treat puppies in such an inhumane way and on such a scale. It's also deeply unfair to all of the legitimate businesses who do pay the right tax, and the total recovered by the taskforce is equivalent to the annual salaries for more than 200 newly qualified teachers.
“We continue to work hard with other government agencies and our partners to tackle these traders. We urge anyone with information about tax evasion to report it to HMRC online or call our Fraud Hotline on 0800 788 887.”
OTS Backs Smaller Businesses
The Office of Tax Simplification (OTS) has called for smaller businesses to be prioritised by the government in regards to the following issues:
● Early step-by-step guidance on things a business needs to run smoothly
● Help with working the PAYE system
● Using HMRC’s Agents Strategy
● Improving Corporation Tax return process
● Making sure business processes are considered when making changes to tax