Tribunal criticises HMRC for delay in issuing penalties

In a recent case, HMRC have been criticised for deliberately issuing penalties for late forms P35 (Payroll end of year forms) several months late, generating higher penalties than were necessary. A summary of the case is reported below. This case has potentially wide ranging implications for other employers. Please do get in touch if you…

Changes to PAYE April 2011

Changes that will affect Employer Annual Returns and starter and leaver PAYE forms: From April, employers with fewer than 50 employees must now send starter and leaver forms – P45s, P46s and similar pension information – online to HMRC.   All employers who send their Employer Annual Return to HMRC after the 19 May filing…

Benefits in Kind – how to make life easier

P11D forms advise HMRC of benefits paid to employees and directors. If your business provides any sort of beneficial payment or gift of goods to employees, generally speaking most will be taxable as a benefit in kind – as if they were payments of salary etc. To make your life easier there are some beneficial…

Company Car Tax

Image via Wikipedia The taxable benefit on the use of company cars and fuel for those vehicles has increased from 6 April 2010. Take for example a petrol-powered car with CO2 emissions of 160g/km. In the tax year to 5 April 2010 you were taxed at 20% of the vehicle’s list price. From 6 April…

Construction subcontractors in the firing line

HMRC have indicated that they are considering reclassifying self-employed construction workers as employed. They have actually launched a consultation process with interested parties. Reclassified workers would be taxed through the PAYE system regardl ess of the length or brevity of each employment assignment. HMRC are convinced that a significant number of construction workers are taxed…

Medical check ups – now tax free

HMRC have now agreed that all medical check-ups provided by employers to an individual employee will be treated as tax and NIC free, even if the check-ups are not available to all employees. This clarifies a number of changes in their approach, and informal concessions, in the last few years. The change will be acknowledged…

PAYE code changes

If your local tax office sent you a demand to pay tax you would obviously take some interest in the issue – is this change correct? When do I have to pay it? Would you feel the same if you received a notification of change to your PAYE code number? Your tax code is set…

Tips for new employers

The basic rules for employers with new employees are important for any business. There is no ‘Casual Labour’ exemption, if you take an employee on with intention of keeping them for just a couple of weeks on a temporary basis – the rules still apply. If the correct PAYE and NIC is not deducted off…

Service companies and the year end return

It’s time for employers to complete and file the annual PAYE return (form P35), and for the second year the form asks about the status of the company, causing some confusion and concern. The form has these two questions which require yes or no answers: – Are you a Service Company? –  If “yes”, have…

Dispensations and benefits in kind

A dispensation removes the requirement to return to HMRC on P11d forms expense payments which are not taxable. If no dispensation exists the employee then has to submit a claim that the expenses reimbursed were incurred solely in relation to the business, and are therefore not taxable. In short a dispensation can save work for…