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Business Blog

EMI options - a current risk

EMI options are the favoured route for most SME’s to provide share incentives to staff.  However, EU State Aid approval for the EMI scheme expires on 6 April 2018. The government has been following the process of applying to the EC for fresh approval but the final response has not yet been received and is not now expected before 6 April...

 

Date: 4th April, 2018
Author: Cathy Corns


And finally a small gift; trivial benefits

There is not much in life that is free and even if you do not pay for it, you can be fairly certain that one way or another you will be taxed on it. However, there is no tax in relation to payments by an employer to benefit an employee if the benefit cost £50 or less and it is not: Cash or a cash voucher (although gift vouchers for a...

 

Date: 20th March, 2018
Author: Jacqui Gudgion


International employees – Short Term Business Visitors

Where a UK company is part of an international group, it may be common for group employees to visit the UK to work for the UK company. Where these visits form part of a secondment arrangement, resulting in the employee becoming UK tax resident, the UK company’s obligations are likely to be clear; UK income tax and NICs (if applicable) will...

 

Date: 20th March, 2018
Author: David Hadley


Beneficial loans

Where an employer provides loans to employees (or their relatives) this will generally need reporting on a  Form P11d.  The taxable benefit is usually equal to the notional interest on the loan at the official rate (currently 2.5% per annum) less any interest actually paid by the employee. However, if the loan is made, after 6 April 2017,...

 

Date: 20th March, 2018
Author: Cathy Corns


‘Making good’ on benefits in kind

An employee can make a payment to their employer to reduce the taxable value of a taxable benefit, often to zero (making good). There is a deadline of 6 July after the end of the tax year for making good on benefits in kind.  The taxable value, and the value on which Class 1A National Insurance are payable, will be reduced only if the benefit...

 

Date: 20th March, 2018
Author: Jacqui Gudgion


PAYE Settlement Agreements (PSA)

A PSA allows an employer to make one annual payment to cover all the tax and National Insurance due on taxable benefits for their employees. If they get a PSA for these items they do not need to put the payments through their payroll or include the payments in their end-of-year P11D forms. The expenses or benefits included in a PSA must be minor,...

 

Date: 20th March, 2018
Author: David Hadley


IR35 consultation

HMRC is consulting on the position with contractors following the changes to companies contracting to the public sector.  It seems likely that some changes will be made with a view to brining more contractors into PAYE.  Whilst there is no certainty as yet it may be worth looking at your contractors and assessing which ones could possibly...

 

Date: 20th March, 2018
Author: Cathy Corns


Loans from trusts

HMRC is looking at any remaining loans provided to employees indirectly, generally from employee benefit trusts or unapproved pension schemes. If the tax liabilities have not already been settled with HMRC there is a backstop date of April 2019 when PAYE will fall due.  If the company is unable to meet the liability e.g. because it has been...

 

Date: 20th March, 2018
Author: Jacqui Gudgion


Salary sacrifice

Where a benefit is provided by way of a salary sacrifice arrangement the value of the benefit for tax purposes will be the greater of: The taxable amount as set out in tax legislation; or The amount of the salary sacrificed. This effectively means there are no income tax or employer NIC savings from operating salary sacrifice arrangements...

 

Date: 20th March, 2018
Author: David Hadley


Tax codes

Dynamic coding is here; HMRC is now using Real Time Information (RTI) data from employers to recalculate employees’ tax codes. The RTI feed will be used to estimate earnings when a tax code review is triggered, for example when a new benefit in kind is notified. Where HMRC calculate that the new tax code will under collect tax for the...

 

Date: 20th March, 2018
Author: Cathy Corns


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