The government has started a consultation to transform support for sick and disabled staff and remove barriers for employees.

The Department for Work and Pensions has recently set out new measures to transform how employers support and retain disabled staff and those with a health condition.

Under the new measures the lowest paid employees would be eligible for Statutory Sick Pay (SSP) for the first time, while small businesses may be offered a sick pay rebate to reward those who effectively manage employees on sick leave and help them get back to work.

Under current legislation, to be eligible to receive SSP you must:

• be classed as an employee and have undertaken work for your employer,
• have been ill for at least 4 days in a row (including non-working days),
• earn an average of at least £118 per week, and
• tell your employer you’re sick before their deadline – or within 7 days if they do not have one.

Each year more than 100,000 people leave their job following a period of sickness absence lasting at least 4 weeks, and the longer someone is on sickness absence the more likely they are to fall out of work, with 44% of people who had been off sick for a year leaving employment altogether.

If you rent out all or part of your home this may create a Capital Gains Tax (CGT) charge when you sell the property.

Presently, HMRC excludes the last 18 months of your ownership – even if the property is let for this time – when assessing any CGT liability. In a draft of the Finance Bill released last month, HMRC have confirmed that this 18 month period will be reduced to 9 months from April 2020.

The exemption for disabled property owners or those in a care home will continue to be 36 months.

The draft Finance Bill also confirms a change to the letting relief rules.

Letting relief is an extra deduction you can make from any CGT payable as a result of letting your home. You can claim the lowest of the following three amounts:

1. The same amount that you can claim as private residence relief.
2. £40,000.
3. The same amount as the chargeable gain you made from letting your home.

From April 2020, you will only be able to claim this letting relief if you are in shared occupancy with the tenant.

Property owners contemplating the disposal of their home – which is or has been let for any period – may be advised to complete their sale before April 2020. In this way they will benefit from the 18 month exemption and the more flexible lettings relief.

It has been confirmed that from April 2020, the government will introduce a new 2% Digital Services Tax (DST) on the revenues of search engines, social media platforms and online marketplaces which derive value from UK users.

This is an attempt to tax revenues earned in the UK by these social media platforms from customers resident in the UK. At present, significant profits are being earned in the UK but transferred off-shore thus avoiding UK taxation.

In the notes confirming that these changes would be included in the Finance Bill 2019, HMRC said:

The revenues from the business activity – subject to DST – will include any revenue earned by the group, which is connected to the business activity, irrespective of how the business monetises the platform. If revenues are attributable to the business activity and another activity, the business will need to apportion the revenue to each activity on a just and reasonable basis.

A UK user is a user that is normally located in the UK.

The Digital Services Tax will apply to businesses that provide a social media platform, search engine or an online marketplace to UK users. These businesses will be liable to Digital Services Tax when the group’s worldwide revenues from these digital activities are more than £500m and more than £25m of these revenues are derived from UK users.

1 July 2019 – Due date for Corporation Tax due for the year ended 30 September 2018.

6 July 2019 – Complete and submit forms P11D return of benefits and expenses and P11D(b) return of Class 1A NICs.

19 July 2019 – Pay Class 1A NICs (by the 22 July 2019 if paid electronically).

19 July 2019 – PAYE and NIC deductions due for month ended 5 July 2019. (If you pay your tax electronically the due date is 22 July 2019)

19 July 2019 – Filing deadline for the CIS300 monthly return for the month ended 5 July 2019.

19 July 2019 – CIS tax deducted for the month ended 5 July 2019 is payable by today.

1 August 2019 – Due date for Corporation Tax due for the year ended 31 October 2018.

19 August 2019 – PAYE and NIC deductions due for month ended 5 August 2019. (If you pay your tax electronically the due date is 22 August 2019)

19 August 2019 – Filing deadline for the CIS300 monthly return for the month ended 5 August 2019.

19 August 2019 – CIS tax deducted for the month ended 5 August 2019 is payable by today.

New defensive controls recently deployed by HMRC have put an end to fraudsters spoofing the tax authority’s most recognisable helpline numbers.

Fraudsters have increasingly mimicked legitimate HMRC helpline numbers (often beginning with 0300) to dupe taxpayers and steal money. Last year alone, HMRC received over 100,000 phone scam reports. The ‘spoofing’ scam worked as taxpayers would receive calls and, on checking the numbers online, would find they appeared to belong to HMRC. This often led people to believe fake calls were real and enabled fraud.

The new controls, created in partnership with the telecommunications industry and Ofcom, will prevent spoofing of HMRC’s most used inbound helpline numbers and are the first to be used by a government department in the UK.

Criminals may still try and use less credible numbers to deploy their scams – but that means they will be easier to spot.

From 1 October 2019, contractors who employ subcontractors, will need to assume responsibility for declaring and paying the VAT that was previously settled by their VAT registered subcontractors.

From this date, registered subcontractors will no longer add VAT to their invoices and main contractors will pay this net of VAT amount.

Now the challenging part.

The main contractor will then add the appropriate subcontractor VAT to their VAT return and add the same amount to their input tax. These two amounts will contra so apart from the hassle of organising the accounting entries both parties, the subcontractor and the main contractor, will be in the same position as before.

So why, you may ask, were the changes made?

Unfortunately, in the past many subcontractors have registered for VAT, invoiced for their services and collected the VAT inclusive amount from their contractor customers, and then disappeared without paying over the VAT they had collected.

The new system, implementing the so-called “reverse charge” process outlined above, simply shifts the responsibility for settling the VAT from the subcontractor to the main contractor.

All that is required from the contractor’s viewpoint is a tedious change to the way you code and enter subcontractor invoices in your accounting software. We can help you make these changes.

As highlighted above, the cash effects of the changes are neutral. Main contractors pay the net amount to subcontractors, add the deemed VAT that should have been charged to their VAT return, and then deduct the same amount as input VAT.

Which supplies will be affected?

HMRC have said that the domestic reverse charge will only affect supplies at the standard or reduced rates where payments are required to be reported through the Construction Industry Scheme (CIS).

Therefore, supplies between sub-contractors and contractors, as defined by CIS, will be subject to the reverse charge unless they are supplied to a contractor who is an end user.

End users will usually be recipients who use the building or construction services for themselves, rather than sell the services on as part of their business of providing building or construction services.

The legislation also allows for those connected to end users, including landlords or tenants, to also be treated as end users. Therefore, intra-group and leasing re-charges of building and construction services connected to the end user are also excluded from the reverse charge.

Get ready for the changes

If you are likely to be affected, please call and we will organise any changes to your accounts software – most systems accommodate the reverse charge process – and show you how to process transactions affected after 1 October 2019.

You would also be wise to ensure that VAT registered subcontractors know what they need to do from 1 October 2019.

It looks increasingly likely that we are heading for a no-deal Brexit. Taken literally, this means that our present relaxed trading relationship with customers and suppliers in the EU will cease at the end of October this year.

Whilst there will be attempts to ease customs congestion and the effects of new tariffs, now is not a good time to sit back and see what might happen.

Many companies have already started a formal risk assessment to clarify how their supply lines and costs would be affected, and this is a process that we would recommend that all businesses consider, and as soon as possible. Even if your business has no direct trade with the EU, many of your customers and suppliers will, and this indirect linkage will have ramifications for your sales and costs post Brexit.

Trying to double guess the antics in parliament is a seemingly fruitless endeavour. If we are going to survive the disengagement with the EU it would be wise to join the ranks of those businesses that are planning for all eventualities.

If you are still unsure how to proceed with a formal review of your Brexit planning, please call, we can help you consider your options.

The government have recently announced that they are to extend the criteria for an approved, and therefore tax-effective, cycle-to-work scheme as part of their drive to reduce pollution and CO₂ emissions in urban environments.

E-bikes have an integrated motor that helps a cyclist pedal, allowing them to reach speeds of up to 15.5 mph in the UK. They are seen as a game changer for their potential to make it easier for older or less fit people to make cycling a part of their commute.

The refreshed guidance will make it easier for employers to provide bicycles and equipment including e-bikes worth over £1,000, by making it clear that FCA authorised third party providers are able to run the scheme on their behalf.

According to their press release, the government is also working to drive down emissions across all modes of transport, committing to end the sale of new conventional diesel and petrol cars and vans by 2040, investing in hybrid trains, doubling investment in cycling and walking since 2010, and launching the £2.5 billion Transforming Cities Fund which will develop innovative public transport schemes in some of England’s biggest cities.

Employers who draw their workforce from the local community might like to take a fresh look at adopting a formal scheme for their business.

1 June 2019 – Due date for Corporation Tax due for the year ended 31 August 2018.
19 June 2019 – PAYE and NIC deductions due for month ended 5 June 2019. (If you pay your tax electronically the due date is 22 June 2019)
19 June 2019 – Filing deadline for the CIS300 monthly return for the month ended 5 June 2019.
19 June 2019 – CIS tax deducted for the month ended 5 June 2019 is payable by today.
1 July 2019 – Due date for Corporation Tax due for the year ended 30 September 2018.
6 July 2019 – Complete and submit forms P11D return of benefits and expenses and P11D(b) return of Class 1A NICs.
19 July 2019 – Pay Class 1A NICs (by the 22 July 2019 if paid electronically).
19 July 2019 – PAYE and NIC deductions due for month ended 5 July 2019. (If you pay your tax electronically the due date is 22 July 2019)
19 July 2019 – Filing deadline for the CIS300 monthly return for the month ended 5 July 2019.
19 July 2019 – CIS tax deducted for the month ended 5 July 2019 is payable by today.

It is possible to make small tax-free payments to employees, including directors, and this might be an appropriate time to make a small tax-free bonus in advance of the annual holidays.
Employers and employees don’t have to pay tax on such a benefit if all of the following apply:
• It cost you £50 or less to provide,
• It isn’t cash or a cash voucher,
• It isn’t a reward for their work or performance,
• It isn’t in the terms of their contract.
HMRC describes these payments as a ‘trivial benefit’.
You can’t receive trivial benefits worth more than £300 in a tax year if you are the director of a ‘close’ company. A close company is a limited company that’s run by 5 or fewer shareholders.
Planning note
The only exception to the above is if the trivial benefits are made available as part of a formal salary sacrifice arrangement.