UK: Weekly Tax Update - 2 March 2015

Last Updated: 11 March 2015
Article by Tina Riches

1 General news

1.1 Labour policy, university tuition fees and pensions relief

On Friday, Ed Miliband, leader of the Labour party, spoke on university tuition fees and at the same time set out Labour's policy concerning pensions, proposing lowering both the annual and lifetime allowances further, to £30,000 and £1,000,000 respectively. Tax relief on contributions by those earning over £150,000 will be capped at basic rate relief.

He said: 'Those with incomes over £150,000 currently get pensions tax relief at more than twice the rate of basic rate taxpayers.

So Labour today confirms our previously announced policy that people with incomes over £150,000 will get tax relief at 20 per cent: the same rate as basic rate taxpayers.

And we will continue this government's policy of reducing the annual allowance and lifetime limit that caps the amount people can put into their pensions tax free.

We will reduce the lifetime allowance for tax-free savings to £1million: still 25 times higher than the average defined contribution pension.

And we will reduce the annual allowance for what you can save tax free in your pension to £30,000: still nearly ten times higher than the average pension contribution.'

There has already been opposition to the proposal, which would be a significant blow to:

  • taxpayers with fluctuating income through their lifetime, such as women taking extended maternity leave or others on career breaks, who try to top up their pension pots over a short period, yet never approach the lifetime limit;
  • public sector workers in defined benefit schemes, such as nurses and other health sector workers on modest salaries who would be caught by such a provision if they move between grades; and
  • those who have saved modest yet regular amounts or with successful funds management who breach the £1m threshold.

1.2 Criminal offence for facilitating tax evasion

The Chancellor, George Osborne, has confirmed in the House of Commons that he is considering further ways of tackling tax evasion. Coupled with this the chief secretary to the Treasury, Danny Alexander, has proposed a new specific criminal offence of 'corporate failure to prevent economic crime'. This would be aimed at those who facilitate illegal tax evasion and could include banks and accountancy firms.

The Chancellor said in Parliament:

'Ahead of the budget I set the Treasury to work on providing further ways to pursue not just the tax evaders but those providing them with advice. Anyone involved in tax evasion, whatever your role, this government is coming after you. Unlike the last government, who simply turned a blind eye, this government is taking action now and will do so again at the budget.'

1.3 Party political tax policy proposals comparison

As the general election approaches, Smith & Williamson has collated some of the key tax proposals aired by a selection of the parties over the last few months. These policies are of course likely to evolve further as we approach the Budget, followed by publication of the various parties' election manifestos. However, we thought it would be useful to provide an early comparison and suggest some particular areas to consider in the run up to the election, some of which may warrant action before the end of the tax year.

Our comments are set out on our website and are based on information available and analysed up to 24 February 2015.

2 Private client

2.1 CJEU decision on French social contributions for non-French residents

The Court of Justice of the European Union (CJEU) has recently announced its decision in a case on French Social contributions (FSC) paid by non-French residents who own French real estate but work in another Member State. Since 2012 FSCs were payable in respect of income from French rental property owned by non-French residents at the rate of 15.5%. The CJEU agreed and confirmed that the charging of FSC on such investment income was unlawful. Taxpayers with rental income in France on which FSCs have been paid should consider making a repayment claim.

In the case of M de Ruyter, a Dutch national resident in France, the taxpayer claimed that he was incorrectly subject to double social contributions - both in France and the Netherlands on the same income, while EU law stated that a resident of an EU Member State should only pay social contributions in one Member State. The court agreed (case C-623/13), confirming that the prohibition on overlapping laid down by Regulation No 1408/71 is not conditional on the pursuit of a professional activity and therefore applies irrespective of the source of the income received by the person concerned.

It is unclear how France will respond to the case. However, in the meantime it appears that claims can be made for 2013 and 2014 and possibly 2012.;jsessionid=9ea7d2dc30dd459a9cdfe5024e73955497ae4a8195c4.e34KaxiLc3qMb40Rch0SaxuPbhv0?text=&docid=162537&pageIndex=0&doclang=EN&mode=lst&dir=&occ=first∂=1&cid=117760

3 PAYE and employment

3.1 Employment related securities (ERS) and internationally mobile employees

SI 2015/360 amends ITEPA 2003 s.431B, so that it will only apply to ERS that are within the scope of UK earnings at the time of acquisition. S.431B automatically applies a market value on ERS as though there were no restrictions where their purpose (or one of their main purposes) is the avoidance of tax (income tax or corporation tax) or national insurance. It comes into force on 6 April 2015. This is anti- avoidance measure that removes the opportunity of an automatic tax free uplift to market value for shares used for avoidance purposes that aware awarded to employees while they are not subject to UK income tax.

3.2 Advisory fuel rates changes from 1 March 2015

Advisory fuel rates for pence per mile that can be used by employee company car drivers are changing from 1 March 2015, with significant reductions in the rates, which are based on falling fuel prices:

The rates apply when:

  • an employer reimburses employees for business travel in their company cars;
  • an employer requires employees to repay the cost of fuel used for private travel;
  • and a VAT registered trader determines the VAT element of mileage allowances.

HMRC have continued to confirm that people can use the previous rates for up to 1 month from the date the new rates apply, as negotiated with the Chartered Institute of Taxation some years ago. This is particularly important given that the rates have fallen as otherwise making payments at the former higher rates could result in adverse tax consequences. This therefore gives employers and VAT registered traders one month to update their accounting systems.

3.3 Ability to access state pension if resident in the EEA or Switzerland SI 2015/349 provides that for the purpose of accessing the State Pension, the agreements on social security made between the UK, Australia, Canada and New Zealand, cover persons resident in the EEA or Switzerland where they have a sufficient link to the UK.

To view the full article please click here.

We have taken care to ensure the accuracy of this publication, which is based on material in the public domain at the time of issue. However, the publication is written in general terms for information purposes only and in no way constitutes specific advice. You are strongly recommended to seek specific advice before taking any action in relation to the matters referred to in this publication. No responsibility can be taken for any errors contained in the publication or for any loss arising from action taken or refrained from on the basis of this publication or its contents. © Smith & Williamson Holdings Limited 2015.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Tina Riches
In association with
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.