EMPLOYER NICs FOR THE UNDER 21s

From April 2015 the employer NIC for those under the age of 21 will be abolished. This exemption will not apply to those exceptionally earning more than the Upper Earnings Limit (UEL), which is £42,285 for 2015/16. Employer NIC will be liable as normal beyond this limit.

CGT ON NON-RESIDENTS DISPOSING OF UK RESIDENTIAL PROPERTY

If you let out a UK residence you are naturally liable to UK income tax on the net profit. That is the case even if you are not tax resident in the UK, but that does not mean you have to pay any CGT on the gain on sale if you live abroad. Well, not at the moment anyway, as from 6 April 2015 a CGT charge will be introduced on future gains made by non-residents disposing of UK residential property. A consultation on how best to introduce this will be published in early 2014. Again, the timing of any sale will be all important.

CAPITAL GAINS TAX (CGT) PRIVATE RESIDENCE RELIEF

A gain arising on a property which has been your private residence throughout your period of ownership is exempt from CGT.  There are deemed period of occupation rules which may help to provide an exemption from CGT even if you were not living in the property at the time. This can with care result in obtaining the valuable relief on a 2nd home (as reportedly achieved by several of our MP’s!).

In particular, your last 36 months of ownership is treated as a period of occupation as a residence, but from 6 April 2014 this reduces to 18 months. Clearly timing is of the essence here.

 

EMPLOYEE OWNERSHIP

Following consultation there will be new tax reliefs to encourage and promote indirect employee ownership. This will represent a possible alternative exit route from your business, with full CGT exemption where you pass a controlling interest to your staff via an employee ownership trust from April 2014.

In addition, from October 2014 bonus payments made to employees of indirectly employee owned companies which are controlled by an employee ownership trust will be exempt from income tax up to £3,600 per annum.

REAL TIME INFORMATION (RTI) LATE FILING AND LATE PAYMENT PENALTIES

A new penalty regime for RTI comes in from 6 April 2014, to encourage compliance with the information and payment obligations.

Late filing penalties will apply to each PAYE scheme, with the size of the penalty based on the number of employees in the scheme. Monthly penalties of between £100 and £400 will apply to micro, small, medium and large employers.

Each scheme will be subject to only one late filing penalty each month regardless of the number of returns due in the month. There will be one unpenalised default each year with all subsequent defaults attracting a penalty. Penalties will be charged quarterly and subject to the usual reasonable excuse and appeal provisions.

There are several relaxations in this unpleasant penalty regime, and we can advise by reference to your particular circumstances.

CAR FUEL BENEFIT CHARGE

Employees and directors who are provided with a company car and who also receive some or all of their private fuel from their employers are subject to the fuel benefit charge – on an all or nothing basis. The benefit charge is determined by applying a set multiple to the appropriate percentage for the car, based on its CO2 emissions.

The car fuel benefit charge multiplier will increase from £21,100 to £21,700 with effect from 6 April 2014, notwithstanding the actual fall in fuel prices in the current tax year, so this is another attempt to stop employers providing any private use fuel.

TAX DIARY OF MAIN EVENTS

 

Date

What’s Due

1 February Corporation tax for year to 30/4/13
19 February PAYE & NIC deductions, and CIS return and tax, for month to 5/2/14 (due 22 February if you pay electronically)
28 February Surcharge of 5% on 2012/13 self assessment tax still unpaid.
1 March Corporation tax for year to 31/5/13
19 March PAYE & NIC deductions, and CIS return and tax, for month to 5/3/14 (due 22 March if you pay electronically)