In this month’s eNews we report on recent developments including the announcement that the plans to introduce a secondary market for annuities have been scrapped together with advice for employers on late filing penalties, avoiding incorrect RTI returns and the provision of childcare voucher provision and how to avoid incorrect RTI returns.
We also consider the latest tax gap statistics, updated phishing guidance from HMRC and a new website to help charities tackle fraud.
Please do get in touch if you would like any further guidance on any of the areas covered.
 Article Index
- PAYE late filing penalties
- Latest guidance for employers
- Tax gap falls to 6.5%Â
- HMRC update phishing guidance
- New website to help charities tackle fraud
- Plans to allow pensioners to sell annuities abandoned
PAYE late filing penalties
HMRC have published the latest issue of the Employer Bulletin with articles on a variety of topics relevant to employers.
One article advises that HMRC have issued the Quarter 1 late filing penalty notices, which cover the period 6 April to 5 July 2016 and have confirmed that these penalties will continue to be issued on a risk assessed basis.
HMRC have confirmed that a late filing penalty will generally not be charged for delays of up to three days after the statutory filing date, but that they may contact employers who persistently file after the statutory filing date but within three days, and they risk being considered for a penalty.
The Bulletin includes advice on how to appeal against a penalty online and states:
‘If you receive a penalty notice which includes multiple penalty defaults and you believe you had a reasonable excuse for each, make sure you appeal against all of the defaults shown on your penalty notice, including any default with a zero charge. If your appeal is accepted, the un-penalised default can then be applied to a later month, reducing the value of any future penalty charges you might incur.’
Please contact us if you would like help with payroll matters.
Internet link:Â Employer Bulletin
Latest guidance for employers
Statutory Maternity Leave and Childcare Vouchers
Following the decision of an Employment Appeal Tribunal (Peninsula Business services v Donaldson) regarding Childcare Vouchers (CCVs), salary sacrifice and maternity leave, HMRC are considering what guidance is needed. In the interim they have confirmed:
If CCVs are provided under an employment contract, outside the scope of a salary sacrifice scheme, then the vouchers must continue to be provided during maternity leave and other periods of family leave (other than unpaid parental leave). There is legal authority that whether an employer must provide CCVs to a person participating in a salary sacrifice scheme in respect of a period when they are on family leave, depends on the terms of the contract of employment. In the Peninsula case, the contract said that an employee on maternity leave would not continue to receive CCVs. The judgment is only of direct relevance in dealing with similar contractual exclusions. Employers are free to continue making payments into a salary sacrifice scheme to buy CCVs on behalf of an employee on family leave if they wish. Use of CCVs that employees already have is not affected by the judgment.
Avoiding errors when reporting PAYE information to HMRC
This article is particularly concerned with incorrect reporting of CIS and statutory payments.
Please contact us if you would like help with payroll matters.
Internet link:Â Employer Bulletin
Tax gap falls to 6.5%
The Office for National Statistics has announced that the UK tax gap fell in 2014/15 to its lowest ever level of 6.5%.
The press release confirms that the UK tax gap, the difference between the amount of tax due and the amount collected, is one of the lowest in the world.
HMRC have reduced the tax gap from 8.3% in 2005/06. If the tax gap had remained at the 2005 to 2006 level of 8.3%, it would have grown to £47 billion and the country would have been £11 billion a year poorer.
HMRC believe that the tax gap has fallen, in part, due to digital reporting. In particular Real Time Information reporting for the PAYE system has led to more accurate recording of information on payroll taxes, and the shift to VAT online has helped bring the VAT gap in 2014/15 to its lowest level of 10.3% (£12.7 billion).
The Financial Secretary to the Treasury, Jane Ellison said:
This government is committed to tackling tax evasion and avoidance wherever it occurs.
The UK has one of the lowest tax gaps in the world. By investing £1.8 billion since 2010 in boosting HMRC compliance capabilities, we’ve brought our tax gap down to its lowest ever level. And to make it even easier for people to pay the right tax in the future, we’ve invested £1.3 billion in new digital tools.
Internet link: GOV.UK
HMRC update phishing guidance
HMRC have updated their guidance to taxpayers on how to spot phishing scam emails.
Phishing is the fraudulent act of emailing a person in order to obtain their personal/financial information such as passwords and credit card or bank account details. These emails often include a link to a bogus website designed to encourage the unwary to enter their personal details.
The HMRC guidance is designed to help taxpayers to recognise genuine contact from HMRC, and how to tell when an email/text message is phishing/bogus.
Internet link:Â GOV.UK recognising phishing emails
New website to help charities tackle fraud
The Charity Commission for England and Wales, together with members of the Charity Sector Counter Fraud Group, have launched a new website to help charities tackle fraud. The website is designed to provide guidance for trustees, staff and volunteers who want more information on tackling fraud in their charity, and includes guidance, tips and case studies, together with links to other organisations tackling charity fraud.
The new website has been launched to mark the start of Charity Fraud Awareness Week (24-28 October). The campaign reminds charities how to limit their fraud risk and aims to ensure that trustees and charity staff can recognise the warning signs of fraud and offers advice on an effective and proportionate response.
David Kirk, Chairman of the Fraud Advisory Panel, commented:
‘Fraud presents a serious threat to every organisation but unfortunately charities can be particularly vulnerable due to the high number of financial transactions they undertake. Fraud can manifest itself in many different forms and is constantly evolving – which is why we are urging everyone working with charities and not-for-profit organisations to join together and stop fraud against charities. Charity staff and trustees must stay alert to the risks and understand how to manage them.’
Internet links: www.charitiesagainstfraud.org.uk GOV.UK news
Plans to allow pensioners to sell annuities abandoned
The government has announced that it is shelving plans to allow pensioners to sell their annuities for a lump sum.
Many experts had predicted that those who sold their annuities would be likely to get a poor deal and the government has decided not to take forward the plans to introduce a secondary annuities market because the consumer protections required could undermine the market’s development.
It has become clear that creating the conditions to allow a competitive market to emerge could not be balanced with sufficient consumer protections.
The Economic Secretary to the Treasury, Simon Kirby, said:
‘Allowing consumers to sell on their annuity income was always dependent on balancing the creation of an effective market with making sure consumers are properly protected.
It has become clear that we cannot guarantee consumers will get good value for money in a market that is likely to be small and limited.
Pursuing this policy in these circumstances would put consumers at risk – this is something that I am not prepared to do.
The government has always been clear that for the majority of people keeping their annuity incomes will be their best option, estimating that only 5% of people who currently hold an annuity would take advantage of this reform.’
Internet link: GOV.UK news
This material is published for the information of clients. It provides only an overview of the regulations in force at the date of publication, and no action should be taken without consulting the detailed legislation or seeking professional advice. Therefore no responsibility for loss occasioned by any person acting or refraining from action as a result of the material can be accepted by the authors or the firm. Please contact us for further information.