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Welcome to the Latest Edition of Whiting & Partners Newsletter for 2015

We are pleased to send to you our latest e-news of the year.  We hope you find this useful and will continue to do so throughout the year.

Please contact us if you would like any further details on any of the issues covered.

eNews - June 2015

In this month’s eNews we report on a number of issues including the announcement of the date of the Summer Budget, recent warnings over pension scams and guidance on the things to avoid when completing forms P11D. We also include links to the latest Pensions Regulator auto enrolment guidance for employers with no workers and the latest advisory fuel rates for company car drivers.

We also report on guidance issued to charities on VAT reclaims and payroll processing together with the end of the paper counterpart to the photo driving licence.

 

Please contact us if you would like further information.

Warning over pension scams
Lack of awareness of VAT rules
P11D forms - don’t get them wrong
VAT recovery on car-derived vans and combi vans
Government announces date of Summer Budget
HMRC issue guidance on VAT reclaims by qualifying charities
HMRC payroll guidance - harvest casuals and casual beaters
TPR guidance for small employers with no ‘staff’
Driving licence paper counterpart no longer valid
Advisory fuel rates for company cars

Warning over pension scams

Those approaching retirement are being urged to be aware of a rise in pension scams, as criminals seek new ways to defraud pensioners.

Savers have been urged to be aware of a rise in pension scams, as criminals seek new ways to defraud pensioners. A report produced by Citizens Advice looked at 150 cases where pensioners had fallen victim to fraudsters. The report identified common types of scams which include:
 
  • encouraging pensioners to move their savings into a ‘new’ pension
  • fake investment opportunities and
  • offering apparently ‘free advice’ and support which actually costs money.
In some cases pensioners are charged a fee for a service that isn’t required, while others are encouraged to part with personal information and bank details, either by email or phone.

Gillian Guy, Chief Executive of Citizens Advice said:  

'Scammers see pensioners as a prime target….‘There are many people looking to benefit from the new pension rules, including scammers. Fraudsters can ruin people’s retirement plans by taking a portion or all of a victim’s pension pots.’

The Pensions Regulator (TPR) has recently launched a campaign to alert people to the danger posed by fraudsters.

From 6 April 2015 individuals have more flexibility as to how they use their pension pot, including the option to choose to take all their savings as a cash lump sum. TPR has warned that scammers are exploiting this change by enticing those about to retire with promises of ‘one-off investments‘ or ‘pension loans’ or ‘upfront cash’, most of which are bogus.

Individuals who believe they are being targeted by a pension scam should contact the Pensions Advisory Service on 0300 123 1047. The Financial Conduct Authority’s website also has a list of known scams. Visit scamsmart.fca.org.uk.

Internet links: Citizens Advice publications  Press release
 
Lack of awareness of VAT rules
 
According to research 36% of the UK’s smallest businesses are unaware of the rules governing VAT thresholds.

A third of the UK’s smallest businesses are unaware of the rules governing VAT thresholds, recent research has revealed.

This lack of understanding could mean that approximately 780,000 businesses are at risk of being fined by HMRC.

Meanwhile, according to the research, 9%% of small businesses intentionally limit their trading in order to avoid reaching the VAT threshold.

Under the current rules, where a taxable person (for example an individual, company or partnership) has VAT taxable turnover of more than the current registration threshold of £82,000 in a rolling 12 month period or where turnover is expected to exceed the registration threshold in the next 30 day period then they must register for VAT.

It is important to monitor turnover, as there is a penalty for late registration in addition to the tax payable.

Please contact us if you would like advice on VAT issues.

Internet links: icaew news   GOV.UK news
 
P11D forms - don't get them wrong
 

HMRC have published a list of common errors in the completion of forms P11D. The information is part of the latest Employer Bulletin and we have reproduced the guidance below.
 

  • Submitting duplicate P11D information on paper where P11D information has already been filed online to ensure ‘HMRC have received it’. These duplicates can cause processing problems.
  • Using a paper form that relates to the wrong tax year – check the top right hand corner of the first page.
  • Not ticking the ‘director’ box if the employee is a director.
  • Not including a description or abbreviation, where amounts are included in sections A, B, L, M or N of the form.
  • Leaving the ‘cash equivalent’ box empty where you’ve entered a figure in the corresponding ‘cost to you’ box of a section.
  • Completing the declaration on the final FPS/EPS submission accurately (for those employers whose software package requires them to be completed) or question 6 in section A of RT 4 form to indicate whether P11Ds are due.
  • Not advising HMRC either by paper form P11D(b) or electronic submission that there is no Benefits in Kind & Expenses return to make.
  • Where a benefit has been provided for mixed business and private use, entering only the value of the private-use portion – you must report the full gross value of the benefit.
  • Not completing the fuel benefit box/field where this applies. This means an amended P11D has to be sent in.
  • Incorrectly completing the ‘from’ and ‘to’ dates in the ‘Dates car was available’ boxes. For example entering 06/04/2014 to 05/04/2015 to indicate the car was available throughout that year. If the car was available in the previous tax year, the ‘from’ box should not be completed and if the car is to be available in the next tax year, the ‘to’ box should not be completed.

If you would like help with the completion of the forms P11D please contact us.

Internet link: Employer Bulletin 53
 

VAT recovery on car-derived vans and combi vans

HMRC have issued a list of makes and models of car derived vans and combi vans which VAT registered businesses can use to determine if the VAT paid on the purchase can be reclaimed as input tax.

The issue is that VAT will normally be claimable in full on the purchase of a commercial vehicle.  However if the vehicle purchased is a passenger car VAT is not recoverable unless it is used ‘exclusively for the purposes of a business’. Generally cars are therefore VAT ‘blocked’ and no input VAT is recoverable.

The VAT guidance states

‘Motor car means any motor vehicle of a kind normally used on public roads which has three or more wheels and either:
a) is constructed or adapted solely or mainly for the carriage of passengers; or
b) has to the rear of the driver’s seat roofed accommodation which is fitted with side windows or which is constructed or adapted for the fitting of side windows’

Whether or not a vehicle is commercial is not specifically defined but instead the definition of a car excludes:
 

  • vehicles capable of accommodating only one person or suitable for carrying twelve or more people including the driver
  • vehicles of more than three tonnes unladen weight;
  • caravans, ambulances and prison vans
  • special purpose vehicles such as ice cream vans, mobile shops, hearses, bullion vans and breakdown and recovery vehicles
  • vehicles constructed to carry a payload of one tonne or more.

Many car-derived vans are not cars for VAT purposes as they have no rear seats, have metal side panels to the rear of the front seats and a load area which is highly unsuitable for carrying passengers etc.

HMRC have issued the clarification due to developments in the car-derived van market as some vehicles with a payload of less than one tonne, have ‘blurred’ the distinction between cars and vans.

If you would like help with this or any other VAT issue please contact us.

Internet link: GOV.UK news

Government announces date of Summer Budget

The Chancellor of the Exchequer George Osborne has announced that there will be a Summer Budget on Wednesday 8 July 2015.

Mr Osborne admitted that it was unusual to deliver two budgets in one year, but said he didn’t want to wait to ‘deliver on the commitments we have made to working people’.

‘It will continue with the balanced plan we have to deal with our debts, invest in our health service and reform welfare to make work pay.’

‘But there will also be a laser-like focus on making our economy more productive so we raise living standards across our country’ he added.

We will keep you informed of the pertinent Budget announcements.

Internet links: GOV.UK news  BBC news
 

HMRC issue guidance on VAT reclaims by qualifying charities

HMRC have issued guidance on VAT reclaims by ‘qualifying charities’ under recent changes to the rules. ‘Qualifying charities’ for this purpose are those concerned with palliative care, air ambulance, search and rescue and medical courier charities.

The guidance details which charities are eligible to use the refund scheme to claim a refund of VAT incurred on goods and services used for their non-business activities. It also covers issues such as what to do when circumstances change, what falls within the scope of the refund scheme and how charities can make a claim.

If you would like any guidance on this or any other VAT or charity issue please do get in touch.

Internet link: GOV.UK news
 
HMRC payroll guidance - harvest casuals and casual beaters

HMRC have issued useful guidance for those employers who pay casual employees working outdoors harvesting perishable crops, or as casual beaters for a shoot.

The guidance outlines the specific circumstances which must apply in order for these employees to be paid without the deduction of tax. The guidance also stresses that their pay is still taxable income and these employees must ensure that any tax due is paid.

Monthly penalties (of between £100 and £400 depending on the size of the employer) now apply to broadly all employers who fail to submit necessary information to HMRC via the Full Payment Submission (FPS) on or before the time wages are paid to employees. It is therefore important that the rules are complied with and returns are submitted on a timely basis.

Please contact us if you would like help with payroll issues.

Internet links: GOV.UK news  GOV.UK late return penalties
TPR guidance for small employers with no 'staff'

The Pensions Regulator (TPR) has updated its guidance on pensions auto enrolment including what businesses need to do when they have no workers.  

If you would like help with auto enrolment please do get in touch.

Internet link: TPR guidance
 
Driving licence paper counterpart no longer valid

The Driving and Vehicle Licensing Agency has announced that with effect from 8 June 2015 the paper counterpart to the photocard driving licence will not be valid and will no longer be issued. The paper counterpart was introduced to display driving licence details that could not be included on the photocard. These additional details include whether the licence holder is entitled to drive some additional vehicle categories and any endorsement/penalty points. The DVLA is advising that the paper counterpart should be destroyed after 8 June 2015. Licence holders still need to keep their current photocard driving licence.

Those with apaper driving licence (issued before the photocard was introduced in 1998) need to be aware that these licences will remain valid and should not be destroyed. However where a licence holder needs to update their licence photocard licences will be issued.

From 8 June 2015 new endorsements will be recorded electronically, and will not be printed or written on either photocard licences or paper driving licences.

This means that from 8 June 2015 neither the photocard driving licence nor the paper licence will provide an accurate account of any driving endorsements a licence holder may have. This information will instead be held on DVLA’s driver record, and can be checked online, by phone or post.

This change does not affect photocard licences issued by DVA in Northern Ireland.

Internet link: GOV.UK news
Advisory fuel rates for company cars

New company car advisory fuel rates have been published which took effect from 1 June 2015. Please take care to update your expenses payments and note that only some rates have been amended. However, the guidance states: ‘You can use the previous rates for up to one month from the date the new rates apply’. The rates only apply to employees using a company car.

The advisory fuel rates for journeys undertaken on or after 1 June 2015 are:
 
Engine size Petrol
1400cc or less 12p
1401cc - 2000cc 14p
Over 2000cc 21p
 
Engine size LPG
1400cc or less 8p
1401cc - 2000cc 9p
Over 2000cc 14p
 
Engine size Diesel
1600cc or less 10p
1601cc - 2000cc 12p
Over 2000cc 14p

Other points to be aware of about the advisory fuel rates:
 
  • Employers do not need a dispensation to use these rates. Employees driving employer provided cars are not entitled to use these rates to claim tax relief if employers reimburse them at lower rates. Such claims should be based on the actual costs incurred.
  • The advisory rates are not binding where an employer can demonstrate that the cost of business travel in employer provided cars is higher than the guideline mileage rates. The higher cost would need to be agreed with HMRC under a dispensation.
If you would like to discuss your car policy, please contact us.
Internet link: Advisory fuel rates
 
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