Employees

HMRC have taken the latest step in their review of the use of overarching contracts (OACs) in the temporary labour market to take advantage of rules for travel expenses.

Revenue officials believe the use of OACs by some employment businesses and umbrella companies allows temporary workers to benefit from tax and National Insurance relief on home-to-work travel expenses

HS Patel (TC4189)

HMRC have extended the registration deadline of their contractor loan settlement opportunity.

Taxpayers now have until 30 June to notify the department that they wish to take part in the tax disclosure facility that was originally scheduled to close on 9 January.

A contractor loan scheme settlement is an arrangement in which a non-UK employer pays a worker untaxed income or a loan, instead of all or part of a salary. Individuals who take part in such a scheme may still have to pay income tax.

Employers are set to receive the first quarterly notices under real-time information’s late-filing penalties regime, which began in October for businesses with 50 or more members of staff.

Firms that have incurred fines can expect the HMRC messages from the beginning of February, according to the department. Advisers will not be sent a copy, but each notice will instruct employers with agents to pass on the correspondence immediately.

Secondary legislation is set to simplify PAYE regulations from 6 March 2015. The change will remove the requirement for employers to complete the end-of-year checklist when making their final full payment submission (FPS) for the year from 2014/15.

The checklist comprises a box on the FPS that opens the end-of-year declaration, consisting of seven questions. This was a feature of the now defunct P35, which was incorporated into the design of the FPS.

The government will not proceed with plans for a new employee shareholding vehicle, it has been announced.

A critical look at government plans to simplify employee taxation

The abolition of employer National Insurance contributions (NICs) on young trainees is a “great idea” made at the “right time”, according to commentators inside and outside the tax sector.

Chancellor George Osborne this afternoon announced that firms will no longer have to pay NICs on earnings up to the upper earnings limit for apprentices under 25 years old.

N S Philpott, D W Scott Law, D J McKillop, J B Law & V A Law (TC3969)

HMRC have announced new fuel rates for company cars, to apply to all journeys on or after 1 December 2014 until further notice. Employers may use either the previous or new rates for one month from the date of change, and therefore make or require supplementary payments, but are under no obligation to do either. Petrol hybrid cars are treated as petrol cars for this purpose. The amounts can be used for VAT, but employers will need to retain receipts.

Yau Wing Liu (TC4118)

So-called pay-day-by-pay-day (PDPD) provisions continue to be used by low-paid agency workers to obtain tax relief for travel costs, despite HMRC deeming such schemes non-compliant, according to the Low Income Tax Reform Group (LITRG).