Tuesday 28 April 2015

To P11D or not, Penalties for not declaring CGT, EIS assurance

In last week's newsletter we looked forward to the P11D submission deadline on 6 July 2015. If the forms aren't due you need to tell HMRC to avoid penalties. Taxpayers who avoid telling HMRC about CGT due will also be hit with high penalties, as we explain below. Finally we have news of a change in HMRC's procedure for EIS investments which anticipates a change in the tax law.

To P11D or not

It's the P11D and P9D season again. Those forms need to be submitted to HMRC by 6 July 2015 where expenses or benefits were provided to employees in 2014/15, which are not covered by a dispensation, or are not otherwise exempt from tax. If the P11Ds are not submitted on time, penalties will be issued.

But how does HMRC know whether a P11D/P9D is due to be filed? In pre-RTI years when completing the end of year form P35 you had to say whether a P11D was due. Those questions were carried over to the “final” RTI return, but from 6 March 2015 there has been no legal requirement to complete those end of year questions (see our newsletter 22 January 2015). 

If you didn't complete the “Is a P11D due?” question on the final FPS for 2014/15, HMRC may assume a P11D is needed anyway. To avoid any nastiness with automatic penalties you can tell the HMRC computer that no P11D/ P9D is needed and no Class 1A NIC is due by completing an online declaration (see link below).

The latest Employer Bulletin (no. 53) contains lots of tips for getting the P11Ds right first time, and its worth a read through as it contains some surprising facts. For instance, did you known that a P9D is not needed where an employee is provided with a medical benefit such as health insurance, and that employee earnsless than £8,500 per year?


This is an extract from our tax tips newsletter dated 23 April 2015. The newsletter itself contained links to related source material for this story and the other two topical, timely and commercial tax tips. It's clearly written and extremely good value for accountants in general practice. Try it for free by registering here>>>

Tuesday 21 April 2015

Share scheme reporting, Non-resident landlords scheme, ATED reporting

This newsletter looked ahead to the next tax form filing deadlines. July brings two deadlines for share scheme registration and reporting, which is particularly complicated this year. The non-resident landlord scheme annual return must also be made by 5 July. Finally don't forget the more pressing deadline for ATED return forms on 30 April 2015!

Non-resident landlords scheme 
The non-resident landlords scheme (NRL) has been in place for many years, but it still comes as a surprise to property owners who move abroad, and to many letting agents who ought to know better. 
  
The “non-resident” condition for a landlord to fall under the NRL is not aligned with the statutory residence test which determines whether person is not resident in the UK for tax purposes. A landlord is non-resident for the NRL if his normal place of abode is outside the UK. An absence from the UK for as little as six months can make the landlord fall under the NRL (see chapter 2 of NRL guidance), but that person may be still technically resident in the UK for other tax purposes. 
  
Unless the landlord has approval from HMRC to receive their rent gross, basic rate income tax must be deducted from rents paid to the landlord by the agent, or where there is no letting agent, by the tenant. The letting agent or tenant must make an annual report (form NRLY) to HMRC by 5 July 2015 for the year to 31 March 2015, and also account to HMRC for the tax deducted each calendar quarter. 
  
This year HMRC are not sending out reminders to letting agents to complete NRLY, so this will be an easy deadline to miss. Interest will be charged on the late payment of tax by agents, and penalties are due for errors in returns. 
  
An application to have rent paid gross must now be made online using an interactive PDF form NRL1i (for individuals), NRLi2 (for corporate landlords) or NRL3i (for all trustees). The rent must only be paid gross once permission is granted by HMRC, and that permission will only be back dated to first day of the quarter in which the application is approved. 


This is an extract from our tax tips newsletter dated 16 April 2015. The newsletter itself contained links to related source material for this story and the other two topical, timely and commercial tax tips. It's clearly written and extremely good value for accountants in general practice. Try it for free by registering here>>>

Monday 13 April 2015

Pension withdrawals, Employment intermediaries, VAT-MOSS or cancel registration

The new tax year has brought new opportunities for pension withdrawals, and new burdens for engagers of self-employed workers, as we explain in this week's tax tips newsletter. We also highlight new VAT-MOSS guidance from the EU and look at how someone can deregister for VAT.

Employment intermediaries 
A new quarterly reporting requirement came into force from 6 April 2015 for agencies and employment intermediaries. It is designed to provide HMRC with information on who is working as “false self-employed” or through off-shore agencies, but the regulations could catch many businesses who don't think of themselves as employment intermediaries.      
  
The Income Tax (Pay As You Earn) (Amendment No. 2) Regulations 2015 (SI 2015/171) define an intermediary for this purpose as: “a person who makes arrangements under or in consequence of which an individual works for a third person or if an individual is remunerated for work done for a third person.” This could apply to any contractor company in many industry sectors, including construction or security. 
  
There are exceptions in the regulations which exempt the contractor company from the reporting requirements if: 
·     it does not provide more than one person's services to a client; or 
·     those persons are all its employees; or 
·     it applies PAYE to the pay of the workers it places with clients.     
       
Thus one-person personal service companies (PSC) don't have to a worry about this new regulation, but if the PSC engages a substitute who is not an employee a reporting requirement may kick-in.   
  
The definition of an agency in the regulations is very broad: ”a person other than the worker, the client or a person connected with the client”. This could catch almost any business where there is another client in the contractual chain, even an organisation that connects clients with tax advisers for specific pieces of work. 
  
The contracting company which has the potential to be deemed to be an “agency” for these regulations needs to show it is the “client” for the services it commissioned, rather than an agent, in order that the reporting regulations do not apply. 
  
Our employment tax experts can help you decide if these new reporting regulations apply to you or your clients. 
 
This is an extract from our tax tips newsletter dated 9 April 2015. The newsletter itself contained links to related source material for this story and the other two topical, timely and commercial tax tips. It's clearly written and extremely good value for accountants in general practice. Try it for free by registering here>>>

Tuesday 7 April 2015

VAT-MOSS returns, RTI penalties, Auto-enrolment exemptions

The Parliamentary candidates are out banging on doors, appealing for votes. If you are bothered by such a call why not ask the candidate about: VAT-MOSS, RTI or auto-enrolment for pensions. These new processes have all made life more difficult for small businesses in the last five years. We also have further updates on these issues this week.

VAT-MOSS returns 
The first period for submitting VAT-MOSS returns opened on 1 April 2015. Those businesses who have registered for VAT-MOSS must submit their return by 20 April 2015, and pay any VAT due as reported under VAT-MOSS by the same date. Are you and your clients ready? 

The VAT-MOSS returns are always due by 20th of the month following the end of the calendar quarter, irrespective of when the UK VAT return is due. The VAT-MOSS return can be done online or by completing a very simple spread-sheet like template. If no digital sales have been made to non-business customers in other EU countries a nil VAT-MOSS return is required. 

The online version of the return may be easier to use as it contains some automatic calculation, which is missing from the spreadsheet template. The online return also has links to EU VAT rates, but you may find it easier to use the more direct link below. However, the trader also needs to report which VAT rate applies to their sale e.g. standard rate, reduced rate, zero rate etc. The same product will not necessarily attracted the same type of VAT rate in all EU countries. 

The value of each digital sale made from the UK and the amount of VAT due on each of those sales must be reported in pounds sterling. So if your client has priced their European sales in euros or other local currencies, those sales will have to be translated into £s. But which date should the business pick for calculating the relevant exchange rate: the date of sale or the end of the VAT period? 

In fact either date appears to be acceptable to HMRC. The VAT-MOSS guidance says if the trader has invoiced in currency other than sterling, that invoiced amount must be translated into sterling at the end of the calendar quarter. However, if the business automatically converts the foreign currency amount into sterling using an agreed daily or other periodic rate to use in their business accounts, those translated amounts should be used in the VAT-MOSS return.


This is an extract from our tax tips newsletter dated 2 April 2015. The newsletter itself contained links to related source material for this story and the other two topical, timely and commercial tax tips. It's clearly written and extremely good value for accountants in general practice. Try it for free by registering here>>>