Horwath Clark Whitehill - Employers Briefing - December 2007

May 5, 2009 | Publisher: CroweClarkWhitehill | Category: Business & Jobs |  

www.horwathcw.com To be tax free, be trivial Issue 24 December 2007 In this issue: ƒ To be tax free, be trivial ƒ Advisory Fuel Rates change once more ƒ Tax-free medicals ƒ HMRC announce NIC rates and thresholds for 2008/09 ƒ Statutory payments – new rates for 2008/09 ƒ Approaching deadlines This issue of Employer’s Briefing will be landing in your inbox shortly before Christmas, so before we talk about anything else, may we first wish you a very peaceful, pleasant and relaxing Christmas season, followed by a happy and prosperous New Year. This also seems an appropriate point to remind you of HM Revenue & Customs (HMRC) rules on modest gifts you may be planning to give to your worthy employees. There is a statutory tax exemption for what are termed ‘trivial benefits’. HMRC interpret this as including such things as flowers, chocolates, bottles of wine or spirits, turkeys and so on. They don’t specify any monetary limits, but our hunch is that expenditure of up to £20 or £25 per person is the safe upper limit. HMRC guidance indicates that a bottle or two is acceptable, whereas a whole case of wine would be beyond the pail. Similarly, a turkey is fine, but a generously filled Christmas hamper would probably be over the top! As with all tax breaks, however, there are pitfalls for the unwary. As you might expect, there is no exemption for cash payments to your staff. More surprising however, is the fact that the exemption doesn’t extend to vouchers. No matter how large or small their face value, any vouchers that you present to your staff will be taxable and liable to NICs. If you give vouchers, you will have to either report them as taxable benefits on your employees’ P11D returns (P9D for the ‘lower paid’) or include them in a PAYE Settlement Agreement. Advisory Fuel Rates change once more HMRC have announced changes to the Advisory Fuel Rates (AFRs) payable in respect of ‘company’ cars and vans. This is now the third revision since the beginning of 2007 and takes effect from 1 January 2008. The new rates are as follows: Engine size Petrol Diesel LPG 1400cc or less 11p 11p 7p 1401 to 2000cc 13p 11p 8p Over 2000cc 19p 14p 11p These are based on fuel prices of 102.1p, 106.3p and 50.2p per litre for petrol, diesel and LPG respectively. AFRs should be used by employers reimbursing business mileage to employees, or by employees repaying private mileage to employers. Tax-free medicals HMRC have now extended the statutory tax exemption for ‘minor benefits’ to include health screening and medical check ups. The regulations define health screening as ‘an assessment to identify employees who might be at a particular risk of ill health’ while a medical check up is ‘a physical examination of an employee by a health professional which is limited to determining that employee’s state of health’. The exemption for health screening is conditional on the benefit being offered to all employees, whilst medical check ups must be offered either to all employees, or to those employees identified by a health screening as needing a medical check up. Both exemptions are available with immediate effect. So long as the conditions are fulfilled, there is no need for P11D entries and no dispensation is required www.horwathcw.com HMRC announce NIC rates and thresholds for 2008/09 Issue 24 December 2007 This year’s Pre-Budget report was unusual in that the usual plethora of releases from the Treasury and HMRC made no mention of the annual revisions to NIC thresholds and rates. Instead, the information emerged on the HMRC website several weeks later. Here are the details relating to Class 1 contributions that you may need for your forward planning. 2007/08 2008/09 Lower Earnings Limit (LEL) £87 £90 Per week Earnings Threshold (ET) £100 £105 Per week Upper Earnings Limit (UEL) £670 £770 Per week Employee contributions between ET and UEL 11% 11% Employee contributions above UEL 1% 1% Employee’s contracted out rebate 1.6% 1.6% Married woman’s reduced rate between ET and UEL 4.85% 4.85% Married woman’s rate above UEL 1% 1% Employer’s rate above ET 12.8% 12.8% Employee’s contracted out rebate 1.6% 1.6% Employer’s contracted out rebate, salary related schemes 3.7% 3.7% Employer’s contracted out rebate, money purchase schemes 1.4% 1.4% For further information: If you would like any further information on the contents of this newsletter or any other employment related issues, contact David Daly, Brian Robson or a member of our Employers’ Advisory Group in our London office: Horwath Clark Whitehill LLP St Bride’s House 10 Salisbury Square London EC4Y 8EH Tel: 020 7842 7100 Fax: 020 7583 1720 david.daly@horwath.co.uk brian.robson@horwath.co.uk Statutory payments – new rates for 2008/09 HMRC have announced the following revised weekly rates for statutory payment that will apply from 6 April 2008 onwards. For Statutory Sick Pay the weekly rate will rise to £75.40. For Statutory Maternity Pay, Statutory Paternity Pay and Statutory Adoption Pay the standard flat rate will rise to £117.18 per week. Approaching deadlines Date Action Wed 19 December 2007 Deadline for payment of PAYE deductions, National Insurance Contributions, Student Loan Deductions and subcontractor deductions for Month 8 (unless paying electronically) Deadline for submitting paper versions of monthly CIS300 subcontractor returns for Month 8 Friday 21 December 2007 Deadline for electronic payments of Month 8 deductions Deadline for electronic submission of CIS300 return for Month 8 Friday 18 January 2008 Deadline for Month 9 remittances (unless paying electronically) Deadline for submitting CIS300 returns on paper for Month 9 Tuesday 22 January 2008 Deadline for electronic payments of Month 9 deductions Deadline for electronic submission of CIS300 return for Month 9 This information is published without responsibility on our part for loss occasioned to any person acting or refraining from acting as a result of any information published herein. © Horwath Clark Whitehill LLP December 2007.

Horwath Clark Whitehill - Employers Briefing - December 2007.pdf

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