Archives for 2018

The following definitions should help to clarify employee and employer rights and responsibilities regarding entitlement to holiday pay.

Almost all workers are legally entitled to 5.6 weeks’ paid holiday per year (known as statutory leave entitlement or annual leave). An employer can include bank holidays as part of statutory annual leave.

Most workers who work a 5-day week must receive at least 28 days paid annual leave per year. This is the equivalent of 5.6 weeks of holiday.

Part-time workers are entitled to less paid holiday than full-time workers. They are entitled to at least 5.6 weeks of paid holiday but this amounts to fewer than 28 days because they work fewer hours per week.

Statutory paid holiday entitlement is limited to 28 days, and so staff working 6 days a week are still only entitled to 28 days’ paid holiday.

Bank holidays or public holidays do not have to be given as paid leave. An employer can choose to include bank holidays as part of a worker’s statutory annual leave. An employer can also choose to offer more leave than the legal minimum. They don’t have to apply all the rules that apply to statutory leave to the extra leave. For example, a worker might need to be employed for a certain amount of time before they become entitled to the additional entitlement.

Additionally, workers have the right to:

• get paid for leave;
• build up (‘accrue’) holiday entitlement during maternity, paternity and adoption leave;
• build up holiday entitlement while off work sick;
• request holiday at the same time as sick leave.

Paid annual leave is a legal right that an employer must provide. If a worker thinks their right to leave and pay are not being met there are a number of ways to resolve the dispute.

HMRC will consider extended options for settling your outstanding tax bill. The key is to contact HMRC, explain why you can’t pay on time, and discuss how you can settle any outstanding liabilities.

If you can’t pay before the deadline, call the Business Payment Support Service. Anyone can use this service, not just businesses.

Business Payment Support Service

Telephone: 0300 200 3835
Monday to Friday, 8am to 8pm
Saturday and Sunday, 8am to 4pm

Nominated partners in business partnerships can negotiate time to pay with HMRC on behalf of the partnership or individual partners.

If you’ve missed your payment date

If you’ve received a payment demand, like a tax bill or a letter threatening you with legal action, call the HMRC office that sent you the letter.

Call the Business Payment Support Service if you haven’t received a bill or letter about payment yet.

Self-assessment

Call the Self-assessment helpline if you’ve missed your payment date.

Telephone: 0300 200 3822
Monday to Friday, 8am to 8pm
Saturday, 8am to 4pm

 

1 May 2018 – Due date for corporation tax due for the year ended 30 July 2017.

19 May 2018 – PAYE and NIC deductions due for month ended 5 May 2018. (If you pay your tax electronically the due date is 22 May 2018)

19 May 2018 – Filing deadline for the CIS300 monthly return for the month ended 5 May 2018.

19 May 2018 – CIS tax deducted for the month ended 5 May 2018 is payable by today.

31 May 2018 – Ensure all employees have been given their P60s for the 2017-18 tax year.

1 June 2018 – Due date for corporation tax due for the year ended 31 August 2017.

19 June 2018 – PAYE and NIC deductions due for month ended 5 June 2018. (If you pay your tax electronically the due date is 22 June 2018)

19 June 2018 – Filing deadline for the CIS300 monthly return for the month ended 5 June 2018.

19 June 2018 – CIS tax deducted for the month ended 5 June 2018 is payable by today.

 

Up to 5 April 2018, certain payments in lieu of notice were not taxable, primarily, those not contractually required to be made.

This is no longer the case.

Employers will now need to pay Income Tax and Class 1 National Insurance contributions (NICs) on an element of all termination payments from 6 April 2018, whether or not they are contractual payments.

The element that is now chargeable to Income Tax and NIC is the amount of the termination payment that represents payment in lieu of notice (PILON). This change applies to payments, or benefits received on, or after, 6 April 2018 in circumstances where the employment also ended on, or after, 6 April 2018. This follows an announcement at Budget 2016 that government would introduce rules to prevent employers from manipulating the system.

This measure is intended to bring fairness and clarity to the taxation of termination payments by making it clear that all PILONs, rather than just contractual PILONs, are taxable earnings.

All employees will pay Income Tax and Class 1 NICs on the amount of basic pay that they would have received if they had worked their notice in full, even if they are not paid a contractual PILON.

This means the tax and NIC consequences are the same for everyone and are no longer dependent on how the employment contract is drafted or whether payments are structured in some other form, such as damages.

 

As you would expect there are a range of conditions that affect the answer to this question. We have reproduced below a summary of the main conditions to be observed.

Workers must be at least school leaving age to get the National Minimum Wage. They must be 25 or over to get the National Living Wage.

Contracts for payments below the minimum wage are not legally binding. The worker is still entitled to the National Minimum Wage or National Living Wage.

Workers are also entitled to the correct minimum wage if they are:

• part-time
• casual labourers, for example someone hired for one day
• agency workers
• workers and homeworkers paid by the number of items they make
• apprentices
• trainees, workers on probation
• disabled workers
• agricultural workers
• foreign workers
• seafarers
• offshore workers

Apprentices are entitled to the apprentice rate if they’re either:

• under 19
• 19 or over and in the first year of their apprenticeship
• Apprentices over 19 who have completed the first year of their apprenticeship are entitled to the correct minimum wage for their age.

The following types of workers aren’t entitled to the National Minimum Wage or National Living Wage:

• self-employed people running their own business
• company directors
• volunteers or voluntary workers
• workers on a government employment programme, such as the Work Programme
• members of the armed forces
• family members of the employer living in the employer’s home
• non-family members living in the employer’s home who share in the work and leisure activities, are treated as one of the family and aren’t charged for meals or accommodation, for example au pairs
• workers younger than school leaving age (usually 16)
• higher and further education students on a work placement up to 1 year
• workers on government pre-apprenticeships schemes
• people on the following European Union programmes: Leonardo da Vinci, Youth in Action, Erasmus, Comenius
• people working on a Jobcentre Plus Work trial for 6 weeks
• share fishermen
• prisoners

people living and working in a religious community

Now that Wales and Scotland have devolved powers for taxation purposes, residents that live and work in the border areas with England have more planning options.

Wales have their own stamp duty regime from April 2018, the Land Transaction Tax (LTT), and Scotland, from April 2015, the Land & Building Transaction Tax (LBTT). Scotland have devolved powers to set their own rates of Income Tax.

Regarding property purchases, this can create interesting differences for individuals buying in the border areas of Wales/England and Scotland/England. For example:

Consider Llanymynech, a village that straddles the border between Powys (Wales) and Shropshire (England). The amount of stamp duty payable on an identically priced house, say £179,000, would cost the buyer £1,080 in Stamp Duty Land Tax if bought in the English side of the village, but no Land Transaction Tax would be payable for an equivalently priced house on the Welsh side of the village. A definite incentive to buy in this price bracket the Welsh side of the border.

If you live in the Scotland/England border areas and you are contemplating the purchase of an expensive property and your budget is £1m, you may want to consider the following numbers:

• Buying in Scotland would cost you £78,350 in Land & Building Transaction Tax, and
• Buying in England would cost you a mere £43,750 in Stamp Duty Land Tax.

Scotland has also set its own Income Tax rates for 2018-19. So, depending on the amount of your income, you may pay variable rates of Income Tax depending on which side of the border you choose to live.

 

1 April 2018 – Due date for corporation tax due for the year ended 30 June 2017.

19 April 2018 – PAYE and NIC deductions due for month ended 5 April 2018. (If you pay your tax electronically the due date is 22 April 2018)

19 April 2018 – Filing deadline for the CIS300 monthly return for the month ended 5 April 2018.

19 April 2018 – CIS tax deducted for the month ended 5 April 2018 is payable by today.

30 April 2018 – 2016-17 tax returns filed after this date will be subject to an additional £10 per day late filing penalty.

1 May 2018 – Due date for corporation tax due for the year ended 30 July 2017.

19 May 2018 – PAYE and NIC deductions due for month ended 5 May 2018. (If you pay your tax electronically the due date is 22 May 2018)

19 May 2018 – Filing deadline for the CIS300 monthly return for the month ended 5 May 2018.

19 May 2018 – CIS tax deducted for the month ended 5 May 2018 is payable by today.

31 May 2018 – Ensure all employees have been given their P60s for the 2017-18 tax year.

Britain’s black cabs now qualify for an incentive to go green as the new tax exemption for electric taxis comes into force this month. The exemption, worth £1,550, will apply to new cabs purchased from April 2018 onwards, and follows the Autumn Budget announcement that zero emission taxis worth over £40,000 will no longer have to pay a Vehicle Excise Duty charge.

Currently, all cars over £40,000 are required to pay this charge. By exempting zero emission taxis, it is hoped that cabbies will be incentivised to replace their old diesel taxi for a cleaner, greener electric version.

If just one switches to a zero-emission vehicle, it would rid the country of seven tonnes of carbon dioxide a year. With over 75,000 black cabs operating in England alone, the impact this would have on the environment would be significant.

According to government sources, black cab owners have had limited choice in the type of vehicle they can buy. This has meant that they have been forced to pay charges which their competitors – who can choose more affordable vehicles – can avoid.

Not only will today’s exemption save drivers from paying the VED charge, but by transferring to a zero-emission electric cab they will also benefit from average fuel savings of over £400 a month.

This initiative is part of a wider government plan to transform air quality and it builds on the £7,500 Plug in Taxi Grant, which helps cab drivers buy a zero-emission vehicle.

From 1 October 2018, HMRC will be gaining access to information from tax havens that will enable it to identify UK citizens with undisclosed offshore assets, and by inference, undisclosed UK income and taxable gains. Why does this matter?

It matters because HMRC has introduced new legislation called the Requirement to Correct which will dramatically increase the penalties for people who have not declared tax or declared the wrong amount of tax on their offshore income and gains.

If you have declared your taxable income and gains, then you have nothing to worry about, but if you haven’t, and HMRC finds out, you could face an investigation and be required to pay the undeclared tax, plus a penalty of up to double the tax you owe – with a minimum penalty of 5% of tax owed.

You can avoid being charged the higher penalties by making a full disclosure of all undeclared tax liabilities under existing disclosure facilities.

Offshore income sources that should be declared include:

• interest from overseas bank or building society accounts,
• dividends and interest from overseas companies,
• rent from overseas properties, and
• wages, benefits or royalties earned outside the UK.

If you are concerned, now is the time to come forward. You have until 30 September 2018 to correct matters before the tougher new penalties are introduced.

Tax payers who are uncertain if they are affected are advised to call and seek guidance.