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CIOT examines new corporate offence proposals

The Chartered Institute of Taxation (CIOT) has recently expressed its concerns that the new corporate offence of failure to prevent the criminal facilitation of tax evasion may lead to a string of prosecutions in relatively small cases where civil penalties can already provide enough punishment.

The Institute set out its concerns in its response to a HMRC consultation on the new corporate criminal offence, which aims to overcome the difficulties in attributing criminal liability to corporations for the criminal acts of those who act on their behalf.

It is still…

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Dividend Allowance

Legislation included in Finance Bill 2016 implements the new 0% rate for dividend income, as well as changing the rates of tax for dividend income. Once enacted, the changes will apply from 6 April 2016. Broadly, the new nil rate applies to the first £5,000 of a person’s dividend income and is available annually. From 6 April 2016, UK residents pay tax on any dividends received over the £5,000 allowance at the following rates:

7.5% on dividend income within the basic rate band;

32.5% on dividend income within the higher…

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August Key Tax Dates

  • 2 – Last day for car change notifications in the quarter to 5 July – Use P46 Car
  • 19/22 – PAYE/NIC, student loan and CIS deductions due for month to 5/8/2016
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August Questions and Answers

Q1. I have five employees who I recently took out for dinner to celebrate the success of the company. The total cost of the meal was £225. Do I have to report this as a benefit-in-kind to HMRC?

A: Finance Bill 2016 legislates for a new tax exemption relating to trivial benefits, which broadly means that if the cost of providing the benefit does not exceed £50 per employee, you will not have to account for it to HMRC, and the employees will not have to pay tax and…

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Casual Employees

Some employers will be considering taking on extra staff on a ‘casual’ basis to cover the summer period. There are a few issues which employers should think about when taking on people on a temporary basis.

Firstly, the employment status of the worker needs to be carefully considered. The term ‘casual worker’ is not precisely defined in statute. It is often used to refer to individuals who are engaged on an ‘as and when required’ basis, and often, the intention is that the individual will not have employment status…

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HMRC Focus on Contractor Loan Schemes

HMRC have published Spotlight 31: change of date for withdrawal of transitional relief on investment growth, which covers the extension of the date of withdrawal of transitional relief currently available under FA 2011, Sch. 2, para. 59 from 30 November 2016 to 31 March 2017.

The withdrawal of the relief was announced at the 2016 Budget, as part of the package of changes totackle the use of disguised remuneration avoidance schemes (such as Employee Benefit Trusts (EBTs) and contractor loans) and ensure that those who have used these…

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Spotlight on Tax Avoidance Schemes

HMRC have published Spotlight 31: change of date for withdrawal of transitional relief on investment growth, which covers the extension of the date of withdrawal of transitional relief currently available under FA 2011, Sch. 2, para. 59 from 30 November 2016 to 31 March 2017.

The withdrawal of the relief was announced at the 2016 Budget, as part of the package of changes totackle the use of disguised remuneration avoidance schemes (such as Employee Benefit Trusts (EBTs) and contractor loans) and ensure that those who have used these…

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HMRC Annual Report Published

The National Audit Office has published a report on the 2015-16 accounts of HMRC.The report shows that HMRC raised £536.8bn of tax revenues during 2015-16, an increase of £19.1bn (3.7%) on 2014-15 and paid out £40bn in benefits and credits (approximately one-fifth of the government’s total benefit expenditure). The taxes that contributed to most of this increase were income tax and National Insurance Contributions (NICs), which together increased by £10.3bn (3.8%); corporation tax, which increased by £4.1bn (9.9%); and VAT, which increased by £2.1bn (1.8%). Capital gains tax…

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July 2016 Key Tax Dates

5 – Deadline for PAYE settlement agreement for 2015/16

6 – Deadline for 2015/16 forms P11Db, P11D and P9D to be submitted and copies of P11D and P9D to be issued to relevant employees

Deadline for employers to report share incentives for 2015/16 – form 42

14 – Return and Payment of CT61 tax due for quarter to 30 June 2016

19/22 – PAYE/NIC, student loan and CIS deductions due for month to 5/7/2016 or quarter 1 of 2016/17 for small employers

Class 1A NIC due in respect of the tax year 2015/16

31

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July 2016 Questions and Answers

Q1. My mother died last year and left my brother and me a commercial business unit. Probate is nearly complete now. If we sell the property in the future, what are the capital gains tax implications on the sale?

A: I presume that you and your brother are inheriting equal shares in the property. Your acquisition value, for future capital gains tax computation purposes, is the market value at the date of death – known as the ‘probate value’. Capital gains tax will be calculated under the normal rules…

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