Mercer & Hole’s Business blog -

Workplace pension law has changed and all employers will be expected to place members of staff who meet certain criteria into a qualifying pension scheme and make contributions. Employers are required by law to automatically enrol all eligible employees into a workplace pension and make a contribution to it. Employers will be given a date by which they must auto enrol their employees – known as a ‘staging date’ – which is determined by the number of employees under a PAYE reference as at 1 April 2012. Should employers have more than one PAYE reference the earliest date will be...

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In a somewhat odd case the Upper Tribunal has ruled that a painting was exempt from capital gains tax as it was ‘plant’ and therefore a ‘wasting asset’. In theory the decision could benefit others with valuable art and antiques as items from their collections may be able to be disposed of without incurring capital gains tax.  However, even if HMRC do not appeal the case we can expect some anti-avoidance rules to counter potential abuse. ...

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From 6 April 2013, the relief available on certain (currently unlimited) income tax reliefs will be subject to a cap of £50,000 or 25% of income, whichever is higher. The main reliefs affected will be trade and property loss reliefs and qualifying loan interest relief. The following income tax reliefs are the main ones that will be affected: Trade loss relief against general income – losses made by an individual carrying on a trade, profession or vocation. Early trade losses relief – losses made in the first four years of a trade. Property loss relief against general income – property business losses arising...

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For many investors into private companies the reliefs available under the Enterprise Investment Scheme (EIS) and the Seed Enterprise Investment Scheme (SEIS) substantially increase the attractiveness of such, inevitably higher risk investments. By way of summary the current reliefs and limits potentially available are: EIS Income tax relief at 30% on the amount subscribed An exemption from capital gains tax on exit after 3 years These reliefs are subject to a £1 million cap on investment The ability to defer tax on other gains until such time as the EIS shares are disposed of. This relief is unlimited. SEIS Income tax relief...

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The Capital Allowances Regime changed (again) on 1 January 2013; the current provisions offer businesses a significant tax saving opportunity – an increase to £250,000 in the Annual Investment Allowance (AIA). This change gives 100% tax relief for expenditure on plant, machinery, fixtures, fittings, etc (but not cars) on items that would normally be written off over many years. The relief is introduced for only a two-year period, and it will revert to £25,000 from 1 January 2015. There is, therefore, a limited opportunity to maximise tax relief on capital costs. It is important to note that unless you have a company with a year...

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HMRC plans to close around 281 enquiry centres by the end of 2014. Currently taxpayers can go to enquiry centres to sort out their tax problems in person, but this does not fit into the department’s drive to reduce administration costs. Rather than the existing network of enquiry centres, HMRC plans to introduce a “more accessible” service tailored to customers’ needs including a specialist team of telephone advisers and a team of mobile, face-to-face advisers able to meet with customers wherever they live. HMRC’s call centres will, apparently, have dedicated teams with experienced staff trained...

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From April 2013 HMRC will introduce a major, mandatory change in the way PAYE is reported through: Real Time Information (RTI).With April 2013 fast approaching are you ready for the biggest change to the operation of PAYE since it was introduced over 60 years ago? A recent article in The Daily Telegraph* suggests most employers are not, with 81% admitting to being unprepared for Real Time Information (RTI) and a further 46% saying they had never heard of it. Under RTI, from 6 April 2013 an employer is required to report every payment to employees on or before the time of payment. To help small businesses...

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The new PAYE reporting regime is now live and it seemed sensible just to look again at penalties. 2012/13 tax year  Provided the final submission of year end return is made by 19 May 2013, no late filing penalty will be levied. For employers who were in the RTI pilot any corrections should be made by the final submission for 2012/13.  Where this is not the case the existing penalties for inaccurate returns can be levied.  HMRC can already look back at the end of the year to see if an employer has failed to pay its PAYE on time on...

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The EC has launched two consultations on measures to improve tax collection and compliance across the EU. The first consultation is on the development of a European Taxpayer’s Code, which would clarify the rights and obligations of both taxpayers and tax authorities.  The second consultation is on a European Tax Identification Number which would assist the identification of taxpayers in the EU.  The measures are aimed at tackling tax fraud and evasion. ...

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The specific VAT changes announced in the Budget are some of the lowest-key for quite some time, possibly a reaction to the outcry last year on pasties, caravans etc and a concern over perceived impact on economic growth.  Intriguingly, the General Anti Abuse Rule (GAAR) does not specifically address VAT. Registration VAT registration thresholds are undergoing their annual update with effect from 1 April (registration threshold increased to £79,000 from £77,000, and deregistration limit increased to £77,000 from £75,000). Fuel Scale Charges Fuel scales charges (for calculating VAT claimable on fuel, where some private use is involved) are also being...

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