Archive for September, 2013

HMRC Relax Real-Time PAYE Reporting Arrangements for Small Businesses

HM Revenue & Customs recognise that some small employers who pay employees weekly, or more frequently, but only process their payroll monthly may need longer to adapt to reporting PAYE information in real time.

They have therefore agreed a relaxation of reporting arrangements for small businesses for a transitional period until April 2014.

Click on the link below for further information:

http://www.hmrc.gov.uk/news/rti-small-businesses.htm

Protect your Child Benefit against the High Income Charge

In January we advised of the introduction of the High Income Child Benefit Charge.

From 7th January 2013, families with either parent earning more than £50,000 are subject to an additional tax charge which claws back some or all of their child benefit. The full amount is clawed back if either parent earns more than £60,000.

Clients are now finding more and more that the use of tax planning can help to protect them against the effects of this charge.

Tax planning measures can include:-

1. Forming a partnership with a spouse with lower income.

2. Restructuring your remuneration package.

3. Adjusting payments to spouses from Limited Companies.

4. Paying wages to family members.

Please contact us for further information on how the charge might affect you, and advice on how to protect your child benefit.

Disclosure of Offshore Accounts

A series of agreements between HM Revenue and Customs and Offshore Countries has resulted in further pressure on the holders of undeclared offshore bank accounts.

1. In February 2013, HMRC and the Isle of Man Government agreed to exchange financial information on taxpayers. Isle of Man banks now inform HMRC of interest earned on offshore accounts, from the 2012 tax year onwards.

However, to encourage taxpayers to reach a settlement, HMRC has offered a special ‘disclosure facility’ from April 2013 until September 2016. If taxpayers avail of this, they will have immunity from prosecution and only suffer a penalty charge of 10% (20% on tax due post 2009).

It should be noted that most offshore accounts were opened in the 1980’s and 1990’s. As HMRC can only go back 20 years, funds lodged before 1993 cannot be taxed.

2. A UK-Swiss tax agreement took effect from January 2013 and holders of Swiss bank accounts have to make a choice;

(i) Protect anonymity – pay a one-off charge of up to 40% AND a yearly withholding tax.

(ii) Declare the bank accounts and negotiate a settlement with HMRC via the Lichtenstein Disclosure facility (LDF).u ready

3. HMRC have also reached agreements with Guernsey and Jersey.

HMRC offshore disclosure facilities provide an opportunity for eligible customers with assets or investments held in British Crown dependencies and other overseas jurisdictions to bring their UK tax affairs up to date. The facilities can be used to make a full disclosure of outstanding liabilities and pay any amount due.

Further information can be obtained through speaking to one of our tax advisers and on the HMRC website, via the link below:-

http://www.hmrc.gov.uk/offshoredisclosure/index.htm

Charities – The Gift Aid Small Donations Scheme

The Gift Aid Small Donations Scheme (GASDS) commenced on 6 April 2013. The scheme allows charities to claim a Gift Aid-like “top up” payment on up to £5,000 of small cash donations (of £20 or less) per year from individuals, without the burden of having to obtain and store Gift Aid declarations. The idea is to allow charities to claim on street collections, or plate collections in a church, where it is not possible to identify each donor.

The top up will be calculated in the same way as Gift Aid – so with basic rate income tax at 20% the top up payment is worth 25% of the small donation amount and the maximum that can be claimed per year is £1,250 (£5,000 x 25%). Charities can therefore potentially increase their annual income by up to £1,250 a year.

The top up payments will be administered through HMRC’s Gift Aid system and top up claims will be made on the same forms as Gift Aid claims.

Full details of the Scheme are available on the HMRC website, which can be accessed via the link below:-

http://www.hmrc.gov.uk/charities/gasds/basics.htm

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