Abbey

Chartered Tax Advisers
Old Bishops' College
Churchgate
Cheshunt
Hertfordshire
EN8 9XP

T: 01992 642024

E: abbey@abbeyaccountants.com

Smiling businessmen and women

  TAX E-NEWS - Monthly Updates June 2015


Welcome to our monthly tax newsletter designed to keep you informed of the latest tax issues.

We hope you enjoy reading the newsletter; remember, we are here to help you so please contact us if you need further information on any of the topics covered.


Peter McDaid CTA ATT TEP
Director

AUTO-ENROLMENT PENSION SCHEME

New Pension regulations are in the process of being implemented known as automatic enrolment (auto-enrolment).

UK employers will at some point in time (the stage date) have to automatically enrol their staff into a workplace pension subject to the employer’s particular circumstances (i.e. size, number of employees etc.).

A number of our clients have received a letter from The Pension Regulator (TPR) telling them to "ACT NOW" to prepare for auto-enrolment under the new pension scheme rules. This is despite the fact that for most small businesses the auto-enrolment staging date will not happen until sometime next year.

The letter gives just a few weeks to nominate a contact to receive communications about auto-enrolment, with the threat of fines or prosecution if action is not taken.

In this situation we would advise you to nominate one of the company directors or the business owner as the point of contact. This will ensure that all communications issued by the TPR regarding the business’s legal obligations under these regulations are received and acted upon appropriately.

For our clients we would request that all such notifications be forwarded to us so that we can advise accordingly.

As a matter of interest the "staging date" for your business will be stated in the letter. This is the date by which you must have a pension scheme in place ready for your employees to join, that is if you do indeed need one.

A large number of small companies will be exempt from auto-enrolment, if they don't technically have any "workers" at their staging date. A company director is not a "worker" if he or she does not have a contract of employment with the company. A company with no staff other than directors has no obligations under auto-enrolment if any of the following apply:

It has only one director; or
It has a number of directors, but none of those have an employment contract; or
It has a number of directors, only one of whom has an employment contract.

So it is possible that a business can escape the red tape involved regarding these regulations but you do need to take advice in this connection.

We would strongly recommend for all businesses to fully review the position and the possible impact of these regulations at an early stage.

We will provide detailed guidance on this subject within the coming months.

FURTHER BUDGET ON 8TH JULY

Following the Election result on 8 May, the Chancellor has announced that there will be a second Budget. We expect this to include a number of Conservative manifesto tax pledges.



HMRC DON’T YET HAVE THE POWER TO RAID TAXPAYERS’ BANK ACCOUNTS

HMRC are seeking the power to recover unpaid tax over £1,000 from taxpayers’ private bank accounts and legislation was originally going to be included in the 2015 Finance Act. However the new measures were not included in the first Finance Act but may be included in the next one!

This new power will only be used where the taxpayer has ignored several demands for payment. Additionally, the taxpayer’s bank account should not be reduced below £5,000 by HMRC.  If enacted, this proposed new power will extend to joint bank accounts in the tax debtor’s name, but not those in the spouse’s sole name.

EMERGENCY PAYE TAX CODE TO BE APPLIED TO CERTAIN PENSION WITHDRAWALS

The new flexible pension rules came into force from 6 April 2015 for those aged 55 or over with money purchase pension schemes.

As announced by the Chancellor in last year’s Budget, these individuals will be able to withdraw as much as they wish from their pension fund but will be taxed on the amount withdrawn at their marginal tax rate, subject to the first 25% of the fund being tax free.

In some cases, the pension fund administrator will apply an emergency PAYE tax code to the payment on a month 1 basis which may result in more tax being deducted than the amount eventually due. This can either be reclaimed at the end of the tax year or during the year if you complete the appropriate HMRC form.

Note that we can advise you of the tax implications of the amounts that you are considering to withdraw from your pension fund and, where necessary, assist you in reclaiming any excess PAYE deducted.

TAX DIARY OF MAIN EVENTS FOR MAY/JUNE 2015

Date What's Due
01 June Corporation tax for year to 31/8/14
19 June PAYE & NIC deductions, and CIS
Return and tax for month to 05/06/15 (due 22 June if you pay electronically)
01 July Corporation tax for year to 30/9/14
06 July Forms P11D and P11D(b) for 2014/15 tax year and where
appropriate form P9D
19 July
PAYE & NIC deductions, and CIS Return and tax for month to 05/07/15 (due 22 July if you pay electronically); payment of Class 1A NICs for 2014/2015 (22 July if you pay electronically)


FORMS P11D DUE BY 6 JULY

As mentioned in the tax diary, the deadline for filing the 2014/15 returns of benefits and expenses paid to employees is 6 July 2015.

Note that there can be significant penalties for incorrect returns so they need to be
completed with great care. Remember that unless the employer holds a dispensation from HMRC, employees’ and directors’ reimbursed expenses (such as travel and subsistence) also need to be reported.

We can assist you in completing the forms and to put in place control procedures that will satisfy HMRC requirements to grant a dispensation from reporting certain
expenses.