Since our previous Law-Now on bank payroll tax, HM Revenue & Customs (HMRC) have made a number of announcements through a list of Frequently Asked Questions and answers which have periodically been updated.
Other key developments since our last Law-Now article are:
- asset managers managing external funds are not caught by bank payroll tax. Dealing and arranging deals as agent as part of the discretionary management of the assets of external clients does not amount to banking employment.
- payments or awards to employees who visit the UK for 60 days or less in the 2009/10 tax year will not be caught by bank payroll tax.
- whilst it has been made clear that the grant of market value options is not caught by bank payroll tax, it is still not clear how awards under a long term incentive plan or other bonus commitments made but not paid after 8 December 2009 but before 6 April 2010 will be valued.
In the most recent update on 16 February 2010, HMRC have made it clear there are currently no plans to publish a further version of the draft clauses before the introduction of the Finance Bill, which is likely to be in March. However, HMRC do intend to publish further detail before then on how they propose to exclude standalone pure brokerage businesses (stockbrokers) from the scope of bank payroll tax as well as proposed amendments to the definition of 'banking group'. Which stockbrokers will be excluded from the tax is still being discussed and we understand this has been a difficult issue to resolve.
Our revised Law-Now on bank payroll tax (taking account of the further HMRC guidance) can be accessed by clicking here (www.law-now.com/law-now/2010/bankpayldec09.htm).
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