UK: Tax Update, 09 July 2007

Last Updated: 12 July 2007

1. Changes at HM Treasury

The new arrivals:

  • Chancellor of the Exchequer: Rt Hon Alistair Darling MP

  • Chief Secretary to the Treasury: Rt Hon Andy Burnham MP

  • Financial Secretary to the Treasury: Rt Hon Jane Kennedy MP

  • Exchequer Secretary to the Treasury: Angela Eagle MP

  • Economic Secretary to the Treasury: Kitty Ussher MP

Link to view their profiles

2. Reminder Of Important Dates For Finishing The PAYE Tax Year 2006-07

19 July 2007: Last date for payment of 2006-07 Class 1A NICs to be cleared in HMRC bank account if posted.

20 July 2007: Last date for payment of any 2006-07 Class 1A NICs to be cleared in HMRC bank account if paid by an approved electronic payment method.

Interest will be charged on any payments received after these dates.

3. Other Forthcoming Important Date - 31 July 2007

Second interim tax payments for 2006/07 become due.

The opportunity should be taken to check whether any claim to reduce is relevant and, if a claim has already been made, whether the amount is still right.

If the 2005-06 Tax Return due back by 31 January 2007 has still not been sent in a second automatic penalty of £100 will be charged.

4. Fraud Attempt - Fake P86 Form

HMRC have issued the following warning:

"We have become aware of a letter claiming to be from HM Revenue & Customs (HMRC) which asks for personal information from taxpayers employed outside the UK.

The letter is accompanied by a bogus copy of Form P86 and asks for personal Bank Account details.

These documents have not been issued by HMRC. The letter, form and fax number that you are requested to return the completed form to, are all fake, and you should not complete any information on the fake form. An authentic P86 is available on the website, and does not contain a request for personal Bank Account details.

Employers are urged to advise their overseas employees to ignore these letters and to report the incident to the Police.

If you have any doubts about a message you have received claiming to come from the Department or asking you to pay money or disclose personal details, then please view our page on known spoofs and phishing attempts."

HMRC

5. Deferred National Insurance Contributions: Notice To Pay

HMRC issued the following news release on 26 June:

Deferment Services have recently undertaken an exercise to calculate the deferred National Insurance contributions (NICs) due (where applicable) for customers who had deferment of payment of NICs in the 2005-2006 tax year.

Normally, a letter showing the breakdown of the calculation of deferred NICs due (CA2718A for Class 1 NICs or CA2705A for Class 2 and/or Class 4 NICs) is issued, followed a few days later by the actual bill for the deferred contributions. However, we are currently aware that in a number of cases the bill has been issued before the letter showing the calculation of deferred NICs due. We are urgently investigating the cause of this but can confirm that the calculations have now all been issued and should be with you shortly.

6. Expatriate Taxation: Practices Not Legislated For

CIOT have recently issued the attached research paper covering various aspects of expatriate taxation where there is no clear legislative or case law support (accounting fees, bonuses, domicile, economic employer test, foreign tax credits, garden leave and holiday pay, hypo tax, incidental duties, IR20, mobile workers, modified PAYE, neglect and penalties, ordinary residence, relocation expenses, CGT, SP5/84 and work days.)

7. Holiday Pay

HMRC recently issued the following statement:

‘In recent months HM Revenue & Customs has become aware that increasing numbers of employers outside the construction industry have been introducing holiday pay schemes. We are seeking information from other providers about their holiday pay schemes as part of our normal policy of continually monitoring and reviewing legislation, to ensure that it is meeting its intended objectives. For background, the exemption dates back to at least the early 1970s and was introduced so that a new employer would not be faced with a NICs liability on holiday pay earned with a previous employer.

HMRC continually monitor and review exemptions to ensure that the legislation is meeting its intended objectives and that original policy rationale intended by Parliament is still relevant.’

8. Refund of Voluntary Contributions

The Pensions Bill had its second reading in the House of Lords on 14 May 2007. When the Bill becomes law it will reduce the number of qualifying years needed to qualify for a full basic State Pension from 39 for women and 44 for men to 30 years for those reaching State Pension age on or after 6 April 2010. There is no change to the number of qualifying years needed for entitlement to Bereavement Benefits.

The Paymaster General jointly with the Department for Work and Pensions issued a News Release on 16 January 2007 concerning refunds of voluntary contributions. The News Release advised that contributors may be entitled to a refund if they have continued to make voluntary National Insurance contributions since 25 May 2006 but were unaware of the Government’s intention to reduce the number of qualifying years required for a full basic State Pension.

HMRC has now provided more details about the administrative arrangements for making refunds following the PMG’s announcement. They will make refunds to people who apply for a refund and satisfy the following conditions:

  • reach State Pension age on or after 6 April 2010,

  • paid voluntary contributions on or after 25 May 2006 (the date the Pension White Paper was published) but before the Pensions Bill gets Royal Assent (expected to happen in Summer 2007) and

  • were not aware of the changes when they paid. This means that at the time they paid they had not received information from HM Revenue & Customs about the changes.

Details and application forms:
http://www.hmrc.gov.uk/nic/vc3-important.htm
HMRC

9. Judgement In The Case Of Commissioners For HMRC V Thorn Baker And Others

In a judgement of the Court of Appeal on 27th June 2007 HMRC’s appeal from the decision of the High Court in the case of Commissioners for HMRC V Thorn Baker Limited and others) ("Thorn Baker") was dismissed.

This means that the High Court Decision given on 14 July 2006 that SSP is not payable to Agency workers whose contract with the agency is for a specified period of 3 months or less stands.

HMRC state that agencies should note that their workers can become entitled to Statutory Sick Pay if in a single contract:

  1. they work longer than the original period specified and the total period actually worked exceeds three months, OR
  2. the contract is extended for more than three months.

Agency workers whose contracts are for three months or less can also become entitled to SSP if two or more such contracts with the same agency are separated by eight weeks or less, (56 days) and

  1. the total length of the contracts is more than 13 weeks
  2. the total period actually worked becomes more than 13 weeks OR
  3. the contracts are extended so that together they can run for more than 13 weeks.

HMRC, DWP and DTI will be considering the implications of the judgement and further information will be published on their websites.

HMRC also point out that, in their opinion, the ruling applies to agency workers only. Other short-term contract workers are unaffected and remain entitled to SSP.

10. SDLT CD-Rom To Be Discontinued

Since online filing was introduced, demand for HMRC’s CD-Rom has significantly reduced and they will not be producing any more once current stocks have been exhausted.

11. Negligible Value List

HMRC’s Negligible Value list has been updated to include New Negligible Value Agreements in June 07.

Link: Negligible Value List

12. Online Agent Authorisation: PAYE Reference Starts With Zero

HMRC have fixed the problem that prevented employers with PAYE reference began with a zero from using their Online Agent Authorisation facility to authorise their agent. All employers can now use this service, according to HMRC.

13. Telling HMRC When You Become Self Employed

HMRC has published an improved version of Form CWF 1 to be used when a person becomes self employed.

In November 1999 Lord Grabiner was appointed by the Chancellor to conduct an investigation into the informal, or hidden, economy and to recommend how to move economic activity out of the hidden economy. Amongst his recommendations were that:

‘more assistance should be given to the newly self-employed at the outset to avoid trouble later on with the revenue departments (and perhaps other regulatory bodies) and that, to facilitate this, there should be an effective requirement to notify the Inland Revenue on or soon after the start of business.’

One of the outcomes of the Grabiner report was that the existing Form CWF 1 which was used to make a written application to pay Class 2 national insurance contributions was replaced by a simpler form. That form has now been improved.

ICAEW

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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

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

 
In association with
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
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
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement

Mondaq.com (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 www.mondaq.com

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 Mondaq.com’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.

Disclaimer

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.

Registration

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 unsubscribe@mondaq.com 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.

Cookies

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.

Links

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.

Mail-A-Friend

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.

Security

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 webmaster@mondaq.com.

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 EditorialAdvisor@mondaq.com.

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 enquiries@mondaq.com.

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