Archive for August, 2015

Higher rate of film tax relief has been given the go ahead.

Wednesday, August 26th, 2015

Britain is set to attract the production of more films like The Theory of Everything, Gravity and Avengers: Age of Ultron after the Chancellor of the Exchequer, George Osborne announced a new higher rate of film tax relief has been given the go ahead.

 

Under the new plans the £1.4 billion film industry will receive a tax credit of 25% on all qualifying expenditure bringing it in-line with TV tax relief. This means a British film costing £40 million will receive an additional £1 million towards productions costs from the change.

 

The Chancellor announced the scheme, which will be backdated to apply from April 2015, whilst visiting the set of Agatha Raisin, a new British TV series being filmed in Wiltshire that is benefiting from the government’s high-end TV tax relief. Under the scheme the government provides a tax credit of 25% on qualifying British TV productions.

 

Chancellor of the Exchequer George Osborne said:

 

“British made films are watched and celebrated all over the world – last year alone we saw eight British made films nominated for an Oscar.

 

A key part of our long term economic plan is supporting our creative industries that contribute billions to the economy and provide millions of jobs.

We want to see more films, like Gravity and Avengers: Age of Ultron, made in Britain and that’s why we’ve made our film tax relief even more generous.”

 

The government’s film tax relief has supported almost £8 billion of production expenditure since its introduction, including films such as Oscar winning Gravity, Maleficent and Harry Potter. It supported 222 films in 2014 alone. In the March 2015 Budget, the government announced that it would further support the film industry by increasing the rate of film tax relief to 25% for all qualifying productions. Previously, the rate was 25% for the first £20 million of qualifying expenditure and 20% for spending above this threshold. The scheme has just been given State Aid approval by the EU which means it can now go ahead as planned.

Benefit in kind changes

Monday, August 24th, 2015

From 6 April 2016 HMRC are introducing an exemption from paying tax and National Insurance contributions (NICs) on qualifying paid or reimbursed expense payments to employees. This means that where an employee is entitled to claim a fully matching tax deduction (i.e. if they incur a business expense they can claim it back from their employer) employers will no longer need to apply for a dispensation, or report those expenses on form P11D. All other non-allowable expenses will still be subject to tax and NICs as they are now. Employees will still be able to claim tax relief from HMRC in respect of non-reimbursed expenses.

This new exemption will not, however, apply to expenses or benefits in kind provided under a relevant salary sacrifice arrangement. This includes any arrangement where employees give up the right to receive earnings in return for tax free expenses payments, or where the level of their earnings depends on the amount of any expenses payment. After 5 April 2016 any expenses payments you pay to employees under these arrangements will need to be paid after deducting tax and NICs.

 All current dispensations agreed with HMRC will no longer apply after 5 April 2016.

 Advisory Mileage Allowance payment (AMAP) and Advisory Fuel Rates (AFRs)

If you have employees who travel for work purposes (excluding normal commuting) in their own vehicle you will still be able to reimburse them using the AMAP rate. (Currently, up to 45p per mile for the first 10,000 business miles and 25p per mile thereafter.) Employees receiving less than the AMAP rates for business travel will still be able to claim Mileage allowance relief (MAR) on the difference. Employees carrying out business travel in a company car, and not getting employer provided fuel, will still be able to receive fuel payments based on our AFRs. Employees can claim a tax deduction for non-reimbursed fuel costs using the existing rules.

 

Couple banned from acting as directors

Thursday, August 20th, 2015

Mark and Janet Styler have been disqualified from acting as directors for six years for withdrawing funds from Window & Conservatory Options Limited after they had been told the company was insolvent and could not afford to continue the level of payments to them.

The company, which began trading in March 2009, sold and installed double-glazing and conservatories to domestic customers throughout the Tameside, Peak District and Derbyshire areas.

An insolvency service investigation found that:

  • In June 2011, Mr & Mrs Styler approved accounts which showed that the company was insolvent. At the time, accountants warned them about the risk of continuing to trade and that their level of drawings from the company exceeded the profits, as they owed the company £95,862
  • The directors received draft accounts on 6 February 2012 for the period ending 30 September 2011, which showed the company was still insolvent. The accountants again warned the directors about their level of drawings of £133,448 for that year
  • A few days later, on 10 February 2012, the directors instructed new accountants to re-do the 2011 accounts. The new accountants amended the accounts based on information provided by Mr & Mrs Styler. The revised accounts showed that the company remained insolvent. However, the amount that the directors owed to the company had disappeared
  • From 11 February 2012 to 17 September 2013 the directors received further payments of £172,715.50 from the company
  • The directors ignored the warnings and continued to withdraw funds from the company, and as a result the company could not make payments to its creditors. On 27 September 2013 the company was placed into Liquidation

Commenting on the disqualification, Cheryl Lambert, Chief Investigator at the Insolvency Service, said:

Directors who abuse limited liability and use company funds to meet their personal expenses can expect to be investigated by the Insolvency Service and enforcement action taken to remove them from the market place. Mr & Mrs Styler repeatedly ignored warnings from professional advisors and used company funds as their own.

Taking action against Mr & Mrs Styler is a warning to directors of their responsibilities and requirements to act for the good of the company and its creditors.

Paid too much or too little tax

Tuesday, August 18th, 2015

 HMRC have issued a press release advising tax payers that they are sending out annual statements for the tax year to 5 April 2015.

The statements are styled P800 forms and summarise income and allowances for the year and the calculation of tax due and tax paid. If you have over paid tax the statement will trigger a repayment in most cases. If you have underpaid, HMRC will generally adjust your PAYE coding to recover the amount due during the tax year 2016-17. If this is not practical you will get a request to make a payment. HMRC have also acknowledged that is cases of financial hardship they will negotiate extended repayment terms.

 Here’s what HMRC published to their website:

“This year, if you’ve paid too much or too little tax, we’re making the process as easy as possible for you.

We will tell you how we’re collecting any underpayment, or we’ll give you a cheque if we owe you money.

There is no need to contact us unless you think the details we’ve used are wrong.

What you need to do

If you get a P800 tax calculation, please check the details are correct.

You can:

  • compare the figures used with your own records, such as your P60, P11d, bank statements or letters from the Department for Work and Pensions (DWP)
  • use the HMRC tax checker to check how much tax you should have paid

You don’t need to do anything if the calculation is correct.

If you’ve underpaid tax

If you haven’t paid enough tax, we’ll usually change your tax code for the next year to collect the money you owe. This happens automatically so you won’t need to do anything and don’t need to contact us.

Sometimes we can’t collect the money you owe through your tax code, for example, if you’re now out of work. In this case, we’ll write to you explaining how to pay the money you owe.

If you’ve overpaid tax

If you have paid too much tax, we will automatically send you a cheque within 14 days of receipt of your P800. You won’t need to do anything and don’t need to contact us.”

However complex your tax affairs, it is advisable to check the P800 form when it arrives.

HMRC takes back control of IT services

Thursday, August 13th, 2015

HM Revenue and Customs (HMRC) announced earlier this month that it will bring some existing IT services under its direct control, while it continues to plan the transition to a new IT delivery model following the ending of the Aspire contract in 2017.

These changes will ultimately enable HMRC to make savings of up to 24 per cent on its £800m annual IT budget by 2020-21 while maintaining consistent delivery of services to customers.

Mark Dearnley, HMRC’s Chief Digital and Information Officer, said:

“We have an ambitious digital vision – to transform our IT services and use the data we hold in smarter ways, so we can deliver world-beating digital services for our customers and colleagues.

The changes we’re announcing today will allow us to maintain consistency of service for customers while we plan for the future which, as now, will include a mixed model of both internal and external delivery using multiple partners.”

HMRC also announced that Capgemini would be providing ‘test and release’ services until 2020, to provide vital quality assurance during the digital transformation.

HMRC has already launched online services that are quicker, lower cost and have tax compliance and security built-in. New Personal and Business Tax Accounts – which work like online bank accounts, allowing customers to deal with all their tax affairs in one place – will be available to ten million personal customers and five million businesses respectively by early 2016.

The UK tax authority has a network of Delivery Centres – hi-tech innovation hubs, based across the UK – which developed an online tax credit renewals service used this year by more than 750,000 tax payers. Apparently, customer satisfaction rates have reached 90 per cent.

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