November 9, 2018
A reminder that from April 2019, anyone setting up a construction business who are considered high risk by HMRC will be asked for a security deposit. The legislation also extends to new, high risk, corporation tax payers.
Security deposits have been a legal option for HMRC for VAT, PAYE and NIC for some time, and so it is an extension to existing, rather than new, legislation, if that makes the builders amongst us feel any less targeted.
The guidance says it will “strengthen HMRC’s ability to deal effectively with the small minority of rule breakers who will not rather than cannot pay tax that is due.” It goes on to say that businesses “experiencing genuine difficulties are not the target of this measure”.
Whether HMRC will consider a “genuine difficulty” when a construction business fails due to HMRC removing its’ gross payment status remains to be seen.
Whilst discussing construction, although on a VAT point, please be aware that the main contractors become responsible to apply the reverse charge VAT on certain invoices from their subcontractors from next October. This will almost certainly require some system changes and would be worth looking at now, so you can provide necessary instructions to your subbies in good time.
The end date for new entries to the childcare vouchers scheme has now passed, but there are still other options available which do not require any input from the employer. Anyone interested should look at the website.
Employer with a salary sacrifice, now referred to as Optional Remuneration Arrangements (OPRA), should be aware that you can close their scheme at the next renewal date. You are under no obligation to continue with the scheme.
Where childcare have grown up, and bicycles have been provided, whilst they can still prove a great asset for staff recruitment and retention, they are, as the new title suggests, optional.
The dynamic coding software used by HMRC over-reacted in the summer of 2017 and sent out significantly reduced code number, some staff even received K codes.
As many employers pay staff bonuses in June and July, and these coincide with forms P11D being submitted and processed, anyone with a new and significant benefit was coded for the benefit on the assumed salary increase indicated by the bonuses.
The codes therefore calculated the tax recovery for those at a higher rate than was actually liable.
It was hoped that HMRC would take note of the many complaints made and adjust their systems to prevent this happening again. Not so. If these codes are still in place, those staff affected should either log into to their self assessment account, call the HMRC helpline or email them, via their website.
If you would like to discuss this blog in more detail please email Carol Watters or call us on 01772 821 021.
Alternatively, please fill in the form below and we will reply as soon as possible.