Over the summer HMRC published six consultation documents on Making Tax Digital. The six consultations set out detailed plans on how HMRC propose to fundamentally change the method by which taxpayers, particularly the self-employed and landlords, send information to HMRC. Two key changes proposed are:

• From April 2018, self-employed taxpayers and landlords will be required to keep their business records digitally and submit information to HMRC on a quarterly basis and submit an End of Year declaration within nine months of the end of an accounting period (accounting periods are typically 12 months long).
• HMRC will make better use of the information which they currently receive from third parties and will also require more up to date information from some third parties, such as details of bank interest. Employees and employers will see the updating of PAYE codes more regularly as HMRC use the data received from the third parties.

HMRC received over 3,000 responses to their consultations which are now closed.

The government has announced it will publish its response to the consultations in January 2017 together with provisions to implement the changes.

Meanwhile HMRC’s Tax Assurance Commissioner Jim Harra has written to the Financial Times stating HMRC’s point of view that ‘Digital tax should not be a burden to businesses’ in a move to allay the concerns that changes will place an additional burden on businesses and their agents.

We will keep you informed of developments.

Internet links: GOV.UK MTD GOV.UK Speech

HMRC have updated their guidance on how to spot genuine contact from HMRC, and how to tell when an email or text message is phishing or bogus.

Phishing is the fraudulent act of emailing a person in order to obtain their personal and financial information such as passwords and credit card or bank account details. These emails often include a link to a bogus website encouraging you to enter your personal details.

Internet link: Genuine HMRC contact

On Wednesday 23 November the Chancellor Philip Hammond presented his first, and last, Autumn Statement along with the Spending Review.

His speech and the supporting documentation set out both tax and economic measures.

Our summary concentrates on the tax measures which include:

• the government reaffirming the objectives to raise the personal allowance to £12,500 and the higher rate threshold to £50,000 by the end of this Parliament
• reduction of the Money Purchase Annual Allowance
• review of ways to build on research and development tax relief
• tax and National Insurance advantages of salary sacrifice schemes to be removed
• anti-avoidance measures for the VAT Flat Rate Scheme
• autumn Budgets commencing in autumn 2017.

In addition the Chancellor announced the following pay and welfare measures:

• National Living Wage to rise from £7.20 an hour to £7.50 from April 2017
• Universal Credit taper rate to be cut from 65% to 63% from April 2017.

In the March Budget the government announced various proposals, many of which have been subject to consultation with interested parties. Draft legislation relating to many of these areas will be published on 5 December and some of the details may change as a result.

Read our Autumn Statement Review.

Autumn Statement 2016 Summary

Today Mr Hammond announced that 2016 would be the last Autumn Statement and from here on they would move to one annual budget.

We have summarised the Autumn Statement 2016 Summary, detailing the main points affecting businesses. We have already published the full details through our twitter feed.

Savers

Annual ISA allowance to increase to £20,000 in April 2017.

A new market saving account from NSI to be launched in 2017

Tax Payers

Chancellor confirmed his commitment to raise tax free personal allowance to £12,500 and the higher rate threshold to £50,000 by the end of Parliament term. Rates for 2017 will be £11,500 personal allowance and £33,500 basic rate band.

Commitment to the planned corporation tax rate reduction to 17%.

National Insurance Threshold for employees and employers to be aligned at £157 per week.

national Living wage to rise to £7.50 per hour from April 2017.

Other Matters

Tax avoidance schemes will continue to be tackled with the introduction of stronger sanctions and deterrents.

Employee tax perks are also to be tightened but this will not affect child care, cycle to work and ultra low emission cars.

Insurance premium tax to rise to 12%.

No change in Stamp duty.

If you need further information on the Autumn Statement 2016 Summary, please contact the office on 01942 322767 or contact through the website

Karen Richardson

Director of Standish Chorley and Wigan based accountants McGinty Demack

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Statutory Maternity Leave and Childcare Vouchers

Following the decision of an Employment Appeal Tribunal (Peninsula Business services v Donaldson) regarding Childcare Vouchers (CCVs), salary sacrifice and maternity leave, HMRC are considering what guidance is needed. In the interim they have confirmed:

If CCVs are provided under an employment contract, outside the scope of a salary sacrifice scheme, then the vouchers must continue to be provided during maternity leave and other periods of family leave (other than unpaid parental leave). There is legal authority that whether an employer must provide CCVs to a person participating in a salary sacrifice scheme in respect of a period when they are on family leave, depends on the terms of the contract of employment. In the Peninsula case, the contract said that an employee on maternity leave would not continue to receive CCVs. The judgment is only of direct relevance in dealing with similar contractual exclusions. Employers are free to continue making payments into a salary sacrifice scheme to buy CCVs on behalf of an employee on family leave if they wish. Use of CCVs that employees already have is not affected by the judgment.

Avoiding errors when reporting PAYE information to HMRC

This article is particularly concerned with incorrect reporting of CIS and statutory payments.

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

Internet link: Employer Bulletin