In this month’s Enews we report on the latest guidance for employers, revised VAT fuel scale charges and the consultation to extend IR35. We also update you on the latest springtime tax scam and the government’s commitment to implement a pensions dashboard. With an update on Money Laundering failings, reaction to the flexible extension to Article 50 and a further delay to Scottish Air Departure Tax, there is a lot to update you on.
Latest guidance for employers
HMRC has issued the latest version of the Employer Bulletin. This April edition has articles on a number of issues including:
- Cash Allowances, Flexible Benefits Packages and Salary Sacrifice
- Unpaid work trials and the National Minimum Wage
- Diesel Supplement Company Car Tax Changes to meet Euro standard 6d
- Student Loans
- Construction Industry Scheme – helpful reminders for contractors and subcontractors
- Welsh rate of income tax and Scottish Income Tax.
If you have any queries on payroll matters please contact us.
Internet link: Employer Bulletin April 2019
VAT fuel scale charges
HMRC has issued details of the updated VAT fuel scale charges which apply from the beginning of the next prescribed VAT accounting period starting on or after 1 May 2019.
VAT registered businesses use the fuel scale charges to account for VAT on private use of road fuel purchased by the business.
Please do get in touch for further advice on this or other VAT matters.
Internet link: GOV.UK fuel scale charges
Consultation on extension of IR35 rules
HMRC has published guidance on the extension of the off-payroll working rules (also known as IR35) to the private sector, a year ahead of its implementation on 6 April 2020.
In the guidance, HMRC state that the responsibility to determine whether the off-payroll working rules apply will fall on the organisation receiving the individual’s service. It outlines a four-step process which can be used to prepare for the changes, starting with identifying any individuals who are supplying their services through PSCs.
The consultation closes on 28 May and asks for responses on several matters, including the scope of the reform and its impact on non-corporate engagers; information requirements for engagers, fee payers and personal service companies (PSCs); and how to address disagreements on an individual’s employment status.
The consultation also sets out HMRC’s plans to provide education and support for those businesses that are affected.
Government confirms implementation of pensions dashboards
The government has confirmed that the initiative to introduce a pensions dashboard will go ahead.
Pensions dashboards will allow those saving for retirement to view information from multiple pensions in one place stating that the dashboard will ‘open up pensions to millions’, and ‘provide an easy-to-access online view of a saver’s pensions’.
The Department for Work and Pensions (DWP) will bring forward legislation that will require pension scheme providers to make consumers’ data available to them through their chosen dashboard. The plan is to include State pension information as well.
Mike Cherry, National Chairman of the Federation of Small Businesses (FSB), said:
‘The government’s commitment to compel pension schemes to share data with platforms through primary legislation is particularly welcome. Some urgency is now required, and we question the three to four-year timeframe for schemes to prepare data for dashboards.’
‘Springtime’ tax scams target young people
HMRC has warned young people in the UK to ‘stay vigilant’ in order to avoid falling victim to ‘Springtime’ tax refund scams.
Criminals often target young individuals or the elderly as these groups of people are likely to be less familiar with the UK tax system. During the months of April and May, criminals often bombard taxpayers with tax refund scams at the same time as genuine rebates are processed by HMRC.
In the Spring of 2018, approximately 250,000 reports of tax scams were received by HMRC.
Individuals have been warned to be wary of text messages, calls and voicemails purporting to be from HMRC. These are often designed to extract personal or financial information from the taxpayer.
Angela MacDonald, Head of Customer Services at HMRC, said:
‘We are determined to protect honest people from these fraudsters who will stop at nothing to make their phishing scams appear legitimate.
‘HMRC is currently shutting down hundreds of phishing sites a month. If you receive one of these emails or texts, don’t respond and report it to HMRC so that more online criminals are stopped in their tracks.‘
Internet links: Action Fraud
HMRC has published a list of businesses that have not met their obligations under the Money Laundering Regulations.
As a supervisor of the Money Laundering Regulations HMRC has a duty to publish details of businesses that have been penalised for not complying with the regulations.
HMRC advises that it considers cases individually to decide whether to publish details in full, anonymously, or not at all. Where a decision is made to publish in full, the following information may be published:
- the name and address of the business owner or business
- the nature of the breach or breaches
- the penalty issued by HMRC
- the status of any appeal against the penalty
HMRC publishes anonymously if it considers that the effect of publishing details about an individual or business would be disproportionate.
Internet link: GOV.UK money laundering
‘Flexible extension’ to Article 50
Business groups, including the British Chambers of Commerce (BCC) and the Confederation of British Industry (CBI), have commented on the six-month ‘flexible’ extension of Article 50, granted to the UK by EU leaders.
The extension potentially pushes ‘Brexit Day’, the day when the UK officially leaves the EU, to 31 October 2019.
Reacting to the news, the BCC stated that the flexible extension is ‘preferable’ for most businesses. It said:
‘Politicians must urgently agree on a way forward. It would be a disaster for business confidence and investment if a similar late-night drama is played out yet again in October.’
The CBI said that UK businesses will now ‘adjust their no-deal plans’ instead of cancelling them. Carolyn Fairbairn, Director General of the CBI, said:
‘For the good of jobs and communities across the country, all political leaders must use the time well. Sincere cross-party collaboration must happen now to end this crisis.’
Scottish Air Departure Tax plans further delayed
The Scottish government has further delayed its plans to replace Air Passenger Duty (APD) with Air Departure Tax (ADT). The plans to introduce ADT have been delayed beyond 2020.
In 2016, as part of the Scotland Act, the Scottish Parliament was given devolved powers to charge tax on travellers leaving Scottish airports. Proposals were put forward to replace the UK-wide APD with an ADT.
The ADT was set to take effect in April 2018, but was delayed due to issues surrounding the current exemption which applies to airports in the Highlands and Islands.
Commenting on the delay, Kate Forbes MSP, Minister for Public Finance and Digital Economy, stated:
‘The Scottish government has been clear that it cannot take on ADT until a solution to these issues has been found, because to do so would compromise the devolved powers and risk damage to the Highlands and Islands economy.
‘While we work towards a resolution to the Highlands and Islands exemption, we continue to call on the UK government to reduce APD rates to support connectivity and economic growth in Scotland and across the UK.’