Revenue news

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Revenue news

Employment-related securities

The Revenue has issued a guide for employers and employees who wish to enter into written agreements to allow the employer to withhold or sell securities equal to the employee's primary National Insurance liability.

This form of recovery can only be entered into when the employer makes a payment of securities. Written agreements between employers and employees are intended to be easy to enter into and therefore the Revenue does not specify any particular format or form that must be followed. The agreement between the two parties has to be in writing to ensure that there is consent on both sides for this form of recovery to be made. The agreement can either state that the employer will sell, or withhold, an amount or percentage of shares to settle the National Insurance liability. If the employer sells or withholds shares and their value is more than the employee's National Insurance liability, the excess amount should be reimbursed to the employee.

As with any form of earnings, the employer has to pay the employee's NICs to the Inland Revenue when the payment of security based earnings has been made. The employee does not directly pay the Revenue his liability.

The guidance also contains some frequently asked questions on the subject; see www.inlandrevenue.gov.uk for details.

(Inland Revenue Guidance Notes dated 28 September 2004.)

Large Business Service

David Garlick has been appointed as head of the Large Business Service in the new HM Revenue and Customs. His appointment represents the first step towards creating a new integrated service for the largest businesses which will bring together the existing Customs' Large Business Group, the Inland Revenue's Large Business Office and Energy Group.

David joined Customs in 1968, and has held many different roles in Customs, Excise and VAT. Latterly he was director of Customs' Large Business Group with portfolio responsibilities for business change and knowledge.

(Inland Revenue and Customs and Excise press release dated 29 September 2004.)

Facts and Figures

Tax Deposit Certificates

Rates of interest on and after 6 Aug 2004

Applied Cashed

for tax

Deposit of under

£100,000 1.25% 0.50%

£100,000 or over:

months held

(a) under 1 1.25% 0.50%

(b) 1 but less than 3 3.75% 1.75%

(c) 3 but less than 6 3.75% 1.75%

(d) 6 but less than 9 3.75% 1.75%

(e) 9 to 12 months 3.75% 1.75%

United Kingdom Bank Base Rates

From To p.a.

5 Feb 2004 5 May 2004 4.00%

6 May 2004 9 Jun 2004 4.25%

10 Jun 2004 4 Aug 2004 4.50%

5 Aug 2004 Current 4.75%

Repayment Supplement and Interest on Tax

From 6 Sept 2004:

Customs: Pay 7.50%; Receive 4.00%

From 6 Sept 2004:

Income tax, CGT and NIC:

Interest on tax 7.50%

Repayment supplement 3.50%

Inheritance tax 4.00%

Corporation Tax:

Accounting periods 30.9.93-30.6.99

Pay 6%; Receive 2.75%

Accounting periods ending after 30.6.99

Pay 7.50%; Receive 4%

From 16.08.04 on instalments:

Pay 5.75%; Receive 4.5%

Official Rate of Interest

From 6 Jan 2002 5.00%

State Retirement Pensions

Taxable Amount 2004/05 2003/04

Single 4,139.20 4,027.40

Wife (non-contrib.) 2,477.80 2,410.20

Foreign Exchange

Spot rates to sterling

31.12.03 31.3.04

Australia A$2.376 A$2.4072

Canada C$2.3133 C$2.4154

Denmark DKr10.5674 DKr11.1342

Euro zone €1.4192 €1.4955

Hong Kong HK$13.898 HK$14.3188

Japan Yen191.85 Yen191.201

Norway NKr11.9095 NKr12.6185

South Africa Rand11.9492 Rand11.5831

Sweden SwKr12.8806 SwKr13.8598

Switzerland SwF2.214 SwF2.3283

USA US$1.7901 US$1.8378

Average rates to sterling

31.12.03 31.3.04

Australia A$2.524 A$2.4488

Canada C$2.2881 C$2.2893

Denmark DKr10.7423 DKr10.7070

Euro zone €1.4457 €1.4400

Hong Kong HK$12.7301 HK$13.1806

Japan Yen189.3354 Yen190.9326

Norway NKr11.5624 NKr11.9099

South Africa Rand12.3217 Rand12.0949

Sweden SwKr13.1934 SwKr13.1427

Switzerland SwF2.1973 SwF2.2266

Issue: 3978 / Categories: