Income Tax

Michael E Robins (TC2902)

Entertainers are to set to be designated as self-employed for National Insurance (NI) purposes, following a decision by the government to repeal the current rules.

The change means actors, singers, musicians, and other performers will pay class 2 and class 4 National Insurance as self-employed earners from 6 April 2014.

Most entertainers were treated as self-employed for tax purposes until the introduction of regulations in 2003, which took such taxpayers to be employed for the sake of NI. 

Michael Wardle (TC2986)

Two in five workers could be paying wrong tax, claim accountants

Several clients operate as contractors through personal service companies. The contracts have been reviewed by a specialist firm, which provides insurance cover against income tax and National Insurance liabilities if the IR35 rules apply

PAYE schemes on which there has been no activity for at least 120 days will be automatically cancelled, HMRC have announced.

A letter – an RTI206 – will be issued to an employer of a shutdown, following an automated review of Revenue records.

The department claimed the new approach will allow officials to identify at a much earlier point that no returns are due – and it removes the obligation to make real-time submissions and subsequent requests for both returns and payment.

M Macklin (TC2943)

Professional accounting body calls for simplification

HMRC have introduced a system of electronic messages intended to help employers keep their PAYE up to date.

The first alert will be sent to employers who are suspected of having submitted a late full payment submission. Recipients must ensure they get their business ready to submit
PAYE returns on time from 6 April 2014 to avoid potential in-year penalties in 2014/15, said the Revenue.

Salaried members of limited liability partnerships (LLPs) will be classed as employees under changes to the taxation of partnerships, HMRC have announced.

The move follows the consultation on proposals for addressing the disguising of the employer/employee relationship through membership of LLPs.

The responses highlighted the problem of disguised employment arising from the interaction of the Alternative Investment Fund Managers Directive (AIFMD) and the existing partnership tax rules on alternative investment fund (AIF) managers who operate as a partnership.

HMRC are hitting amateur clubs for six over employment status

Employers have themselves to blame for the majority of PAYE bills they dispute, according to a report from HMRC.