PAYE Randoms 29 May 2013

May 29, 2013 2013

random pencils

Time is scarce this month so, without any further ado, here's a selection of recent PAYE related news that we think is worth sharing.

Advisory fuel rates

A slight change to the rates published by HMRC come into effect from 1 June 2013, the new rates are here for information.

Most of the changes are down the way, by 1p mostly, to reflect the slightly lower pump prices we are "enjoying" at the moment.

For those of you not aware, the Advisory Fuel Rates are those suggested by HMRC as standard (not taxable) for either company car drivers claiming reimbursement from their employer for business journeys, or for the purposes of calculating a fair charge for employees to repay any personal mileage costs back to the employer, e.g where all fuel is initially paid by a fuel card. They are also used for VAT purposes as well.

Don't forget though, you DON'T have to use these rates ! You DO have to prove to HMRC why alternative rates are more appropriate though if you deviate from the "Advisory" figures.

Employment Related Shares & Securities

The latest ERSS bulletin was published by HMRC earlier this month, the main points from which are:

1. Employers will have to register most Share Incentive Plans, Save As You Earn Schemes and Company Share Option Plans online with HMRC from April 2014. This includes new and existing schemes and is a one-off requirement.

2. When registering the schemes, employers will need to "self certify", in other words, confirm that each scheme meets the conditions for advantageous tax treatment.

3. Online filing of share related returns, including the more common forms 40 and 42, will become mandatory from April 2015.

Tax cases

Two cases worth mentioning (but read the full case summaries at your peril though as both are VERY long winded !) are

 Richard Denny v HMRC

This case again highlights to owner managed limited companies how absolutely critical it is to keep business and personal life completely separate otherwise a whole load of tax issues could be waiting for you when HMRC find out. This chap ended up incurring tax liabilities on various benefits in kind such as living accommodation, use of a boat and overdrawn director's account simply because he was treating company money and assets as his own.

Scotts Altantic Management Ltd v HMRC

This case involved the matter of EBTs (Employee Benefit Trust) which seems to be an issue featuring more and more at the Tax Tribunal these days.

Surprisingly, HMRC lost this one, well at least on the PAYE side, they had more success on the corporation tax issues. As with other EBT cases, the PAYE position hinged mostly on whether shares in a company were placed "unreservedly at the disposal of various employees" which the tribunal ruled were not.

Whilst this was a decent result for the taxpayer, it is another timely reminder that HMRC will vigorously challenge situations where employment benefits are seen to be provided through EBTs. As this case also highlights, HMRC are increasingly seeking to transfer PAYE liabilities on to individual directors or employees where they believe there is some form of collusion to avoid tax.


Okay, that's all for now folks. And yes, RTI has been missed off this blog deliberately before you ask ! Whilst it may be misleading to suggest that RTI is going wonderfully for all employers, there are certainly less teething troubles this month than many expected so not too much to report that hasn't been repeated many times over elsewhere. We may do more on RTI in June though depending on what information we get through on this from clients and contacts.

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