P11D FORMS DUE SOON
As set out in the following Key Dates section, employers need to submit details of benefits in kind provided to directors and employees by 6 July 2018, unless they are registered to voluntarily payroll benefits.
All BiKs are now valued at the higher of the cash given up or the value of the BiK. Many previously non-taxable BiKs are now taxable, valued on the cash given up.
Note however that cars with emissions of 75g CO2 / km or less, pensions, pension advice, childcare and Cycle to Work benefits are unaffected.
You should have received an email from us if we think you have had any benefits or we it has been a few years since we last checked there was none.
If you have not yet responded then please check your emails and confirm back to us either way.
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Is off-payroll rules (IR35) going to be extended to private sector workers?
The Government has opened a consultation into a possible extension of the rules that currently apply to "off payroll" workers in the public sector to the private sector.
The IR35 rules introduced in 2000 are intended to ensure that people working through a Personal Service Company (PSC) who would have been employees if they had been engaged directly, pay broadly the same Income Tax and National Insurance Contributions (NICs) as if they were employed. However, it is estimated by HMRC that only 10% of individuals working in this way apply the rules properly, costing the Exchequer hundreds of millions of pounds in lost tax revenues every year.
In April 2017, the Government reformed the rules for engagements in the public sector, and early indications are that this has resulted in an increase in public sector compliance. The April 2017 change requires the public sector body or agency, not the worker, to decide whether or not the IR35 rules apply and then deduct income tax and national insurance from payments to the worker.
There are however concerns that many of such workers are being treated as quasi-employees incorrectly. The consultation document states that there is evidence that some public authorities did have difficulties implementing the reform and in understanding the new rules.
HMRC have introduced the Check Employment Status for Tax service (CEST) software on their website to assist employers in reviewing workers’ contracts.
As well as the possible extension of the rules that currently apply to the public sector, the consultation is requesting views on other options.
One alternative would be to require engagers to carry out due diligence into labour providers in their supply chain to ensure that they are compliant with employment and tax laws. This is already a requirement for gangmasters and other labour providers.
The consultation period ends in August and it is anticipated that the Chancellor will make an announcement about future proposals in the Autumn Budget - this may be a blow for our existing contractor clients so we will be keeping a keen eye on the situation.
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