Newsletter – July 20th 2016

By 20th July 2016Latest news


Requesting an SA302 from HMRC Income Tax

HMRC has tweeted a reminder to taxpayers who need to request a copy of their SA302 tax calculation. The SA302 tax calculation and tax year overview documents are commonly used as evidence of income for loan or mortgage purposes for the self-employed. The forms have become more widely used since the mortgage rules have required proper evidence of income.

The tax calculation (SA302) shows the breakdown of the income returned on the taxpayers tax return, including commercial versions. The tax year overview confirms the tax due from the return submitted to HMRC and shows any payments made, cross…

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The Apprenticeship levy Payroll

New research by the Chartered Institute of Personnel and Development (CIPD) has revealed that over a quarter of employers do not know if they will be expected to pay the new Apprenticeship Levy that is expected to commence in April 2017. Further, only a third of those employers who expect to pay the levy have calculated how much it will cost them each year.

Peter Cheese, Chief Executive of the CIPD, said:

‘We share the Government’s ambition to increase the number and quality of apprenticeships in the UK. However, our research suggests while the levy will boost apprenticeship numbers among some…

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New national minimum and living wage factsheet Payroll

A new factsheet has been launched by HMRC entitled “Carrying out a self-review of the National Living Wage and the National Minimum Wage”. The factsheet will be issued by HMRC as part of their checks to ensure that employees are being correctly paid the National Living Wage (NLW) and National Minimum Wage (NMW). The factsheet provides employers with instructions on how to self-review their records. The NLW and NMW are the minimum legal amounts that employers must pay their employees.

The size and scope of a self-review will depend on a number of factors such as:

  • the size of the workforce;
  • the…

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Professional bodies approved for tax relief Payroll

Many professionals such as accountants, lawyers and health professionals are required to make a subscription to a professional body or learned society. HMRC has recently published an updated list of the organisations that they will accept as valid professional bodies. This list is updated from time to time and the most recent update lists all approved bodies as at 23 June 2016.A statutory fee or contribution shown in the list is an allowable expense where employees:

  • Pay this out of their earnings from an employment and
  • are required to pay this as a statutory condition of following their…

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LITRG comments on secondary annuities market Pension

The Low Income Tax Reform Group (LITRG) was established in 1998 to improve the policy and processes of the tax, tax credits and associated welfare systems for the benefit of those on low incomes. The LITRG has recently published a new press release on the government’s plan to introduce a new secondary annuity market by April 2017.

The introduction of a secondary annuity market will affect more than five million people who own an annuity as well as anyone who purchases an annuity in the future. These proposals will extend the pension freedoms introduced last year and will be especially relevant…

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Tribunal issues VAT default surcharge ruling Value Added Tax

HMRC imposes a VAT default surcharge on businesses that submit late VAT returns. VAT registered businesses are required by law to submit their return and make sure that payment of the VAT due has cleared to HMRC’s bank account by the due date. The normal deadline for submission of a VAT return and making payment is one calendar month and seven days after the end of the relevant VAT quarter.There is no penalty for a first offence, however a business that submits a VAT return late is issued with a surcharge liability notice that begins on the date of the notice and ends twelve months from the…

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Money Laundering Regulations Corporate Governance & Regulation

The MLR101 form used by MSB’s and TCSP’s to apply for a Fit and Proper test under the MLR has recently been updated.The Money Laundering Regulations (MLR) are designed to protect the UK financial system and put in place certain controls to prevent businesses being used for money laundering by criminals and terrorists.

Many businesses are monitored by the Financial Services Authority or certain professional bodies. However, businesses that HMRC is responsible for supervising should be aware of the requirement to register with HMRC and the penalties for not doing so.

HMRC is responsible for…

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Landfill tax guidance Landfill Tax

Landfill tax was introduced by the Government in 1996 to encourage efforts to minimise the amount of waste produced in the UK and the use of non-landfill waste management options such as, recycling, composting and recovery. HMRC’s landfill tax manual has been temporarily withdrawn whilst it is being updated.However, HMRC’s Notice LTF1: A general guide to landfill tax remains available on the GOV.UK portal. The notice is primarily for landfill site operators but will also be of interest to waste producers, others involved in the waste management industry and environmental bodies under the…

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Classifying imports and exports HMRC notices

HMRC has recently issued new guidance that stresses the importance of correctly classifying goods. Customs Code Implementing Regulation 2454/93, Article 199 states that importers and / or exporters are legally responsible for the correct Tariff classification of goods, even where they employ an agent to handle customs entries on their behalf.There are special procedures for classifying imports and / or exports. It is important that goods are classified correctly according to the UK Tariff in order to clear goods through Customs. There are penalties that could be levied if goods are…

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Turkmenistan and UK tax treaty Overseas tax issues

The UK signed a new Double Taxation Conventions with Turkmenistan on 10 June 2016. The agreement will be effective in the UK for income tax, capital gains tax and corporation tax and for taxes in Turkmenistan on profits (income) of juridical persons and on the income of individuals.The new convention generally incorporate the latest standards on business profits, exchange of information and assistance in collection of taxes. The agreements generally follow the provisions of the latest Organisation for Economic Co-operation and Development (OECD) Model Double Taxation Convention. The…

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Updated digest of Double Taxation Treaties Overseas tax issues

HMRC has published an updated (April 2016) issue of the Digest of Double Taxation Treaties. The digest includes updated information on double taxation arrangements between the UK and a number of other countries.The digest is intended as a guide to double taxation relief for certain types of UK income received by the residents of the territories listed in the digest. The digest does not explain the conditions for relief and specific questions should be addressed by reference to the relevant countries treaty and any subsequent protocols.

The comprehensive list includes all countries with which…

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New online database of employment tribunal decisions Employment Law

The HM Courts & Tribunals Service (HMCTS) has announced plans to introduce a new online database of employment tribunal decisions in autumn 2016. HMCTS has said that the new database will be available to all to search on the internet. It will include judgments from England, Wales and Scotland and it will initially only cover new judgments. HMCTS has not yet taken a decision on whether existing judgments will be converted and made available in the online database.Currently, paper copies of employment tribunal judgments in England and Wales are held at Bury St Edmunds and judgments in…

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BREXIT and the implications for employment law Employment Law

Now that the UK has voted to leave the European Union by 52% to 48%, the government will, in due course, inform the European Council of its intention to leave the EU in accordance with Article 50 of the Treaty on European Union. This notification then triggers a two-year period for the negotiation of the terms of a member state’s withdrawal. It seems that this will not happen before October 2016, when the current prime minister, David Cameron, says he will step down and leave it to his successor to invoke Article 50 and negotiate the UK’s withdrawal terms. Unless an agreement is reached by all…

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Pension schemes newsletter Pension providers

A new pension schemes newsletter has been published by HMRC. The latest edition of the newsletter includes details of the following topics:

  1. Pension flexibility. Guidance on operating PAYE on pension flexibility payments. New guidance applies to pension flexibility payments from 6 April 2016 onwards.
  2. Annual allowance. From April 2016, the annual allowance is tapered for taxpayers whose income exceeds £150,000. The allowance will reduce by £1 for every £2 that an individual’s income exceeds £150,000, down to a minimum of £10,000 for individuals with income of £210,000 or more. The Pensions Tax…

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Britain vote to leave the EU General

Following a hard fought campaign, Brexit emerged as the winner of the European Union referendum campaign. The decision means that Britain has a voter mandate to exercise her right to leave the European Union. The exact timetable for Britain’s withdrawal from the European Union has not been laid out. However, the Prime Minister, David Cameron, has confirmed that the formal negotiations for withdrawal from the European Union, known as triggering Article 50, will be a job for the next Prime Minister following the Conservative leadership election in September.

The Chancellor, George Osborne…

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Fraudulent emails from ‘HMRC’ General

Taxpayers are reminded that the problem of fraudulent emails continues. A new type of email phishing scam regarding ‘Tax Returns’ has been identified by HMRC. These emails are part of a phishing exercise that use bogus e-mails and websites to trick taxpayers into supplying confidential or personal information. These emails aren’t genuine HMRC messages and should be ignored.

The emails often start with phrases which alert taxpayers to the fact that they are due a refund of tax with the emails containing links to fraudulent websites. Any email that appears to be fraudulent should not be opened…

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