Horwath Clark Whitehill - Employers Briefing - September 2007

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

www.horwathcw.com HMRC clamps down on late night taxi exemption Issue 22 September 2007 In this issue: • HMRC clamps down on late night taxi exemption • National Minimum Wage – the watchdog bites! • Simplifying ‘nil payment’ notifications • ‘An inspector calls’ • Approaching deadlines HM Revenue & Customs (HMRC) has issued draft guidance which indicates that it intends to tighten up on its interpretation of the legislation covering late night travel by employees. Currently, when an employer pays for an employee’s taxi journey home after late working, Section 248 of ITEPA 2003 provides an exemption from the benefit in kind charge that would otherwise arise. Four conditions have to be met: ƒ this happens on not more than 60 occasions in any tax year ƒ the employee is asked to work later than usual and after 9pm ƒ there is no regular pattern to the late working ƒ by the time the employee ceases working, either public transport has ceased or it would be unreasonable to expect the employee to use public transport. Not all aspects of HMRC policy in this area are new. It was already known, for example, that the ‘60 occasions’ rule is not intended to be an allowance – if the limit is exceeded, all the journeys become taxable, not simply the 61st and subsequent journeys. Similarly the ‘later than usual’ rule prevents workers such as restaurant and bar staff from benefiting, because they work in an industry where working after 9pm is normal. However, the new guidance reinterprets ‘later than usual’ to show that HMRC will also take account of established work patterns. So, for example, a worker who is contracted to work till 8pm but frequently works till 10pm or later will be denied the exemption because of his working pattern, even though his employer provides a taxi fewer than 60 times in the year. More alarming is HMRC’s clamp down on what they will accept as ‘unreasonable’ for the purpose of condition four. They do not accept that the exemption should apply simply because the employee: ƒ has to travel home in the dark ƒ is tired after a long day at the office ƒ has to carry a heavy briefcase home ƒ would otherwise have to travel to an unmanned station. They are also unimpressed by appeals to the reduced service frequency in the evening. According to HMRC it is up to the employee to study the timetables and make plans accordingly! (Perhaps it hasn’t occurred to them that not all late night working is planned in advance.) However, they are prepared to apply the exemption if an evening journey is likely to take ‘significantly longer’ than at other times, but they define ‘significantly longer’ as meaning at least 60 minutes. Employers will be relieved to know that the guidance does allow for the exemption to apply where there are issues of the employee’s personal safety. Yet even here, there is a strong hint that the exemption will not be automatic. To quote the guidance verbatim: ‘.. the circumstances of the case must demonstrate a significant difference from the normal situation where people continue to use public transport after 9pm.’ Given HMRC’s increasingly rigid approach in this area, employers may be tempted to consider putting the employee up in a nearby hotel overnight. If they do, there will be a taxable benefit. The Section 248 exemption applies only to transport. www.horwathcw.com National Minimum Wage – the watchdog bites! Issue 22 September 2007 On 28 August 2007, HMRC reported the first criminal prosecution under the NMW legislation. The proprietor of a children’s nursery in Walthamstow, London E17, was fined £2,500 plus £500 costs for ‘obstruction’ – refusing to allow HMRC compliance officers access to staff records. There are six potential criminal offences under the 1998 legislation: ƒ refusing or wilfully neglecting to pay the NMW ƒ failing to keep or preserve the necessary records ƒ knowingly causing or allowing a false entry in records ƒ furnishing false records or information ƒ delaying or obstructing compliance officers ƒ refusing to answer questions or produce documents for compliance officers. Each offence carries a maximum fine of £5,000 plus a criminal record. 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 Simplifying ‘nil payment’ notifications HMRC has added a new ‘nil payment’ feature to its website. It is now possible to notify HMRC via the internet when no PAYE or NIC remittance is due for a particular tax month and save yourself from being bombarded with payment reminders. Just go to the web page below and fill in the online form: http://www.hmrc.gov.uk/howtopay/paye_nil.htm You will need to have your Accounts Office reference handy. This is a 13-character reference that you can find on the front of your payslip booklet, e.g. 951PQ00123456. Alternatively, you can use the telephone service on 0845 366 7816. ‘An inspector calls’ A further reminder that we are offering you the chance to attend one of two half-day training workshops on how to handle a PAYE inspection by HMRC. These will be held in our London office on: ƒ Wednesday 17 October 2007 (primarily for the not-for-profit sector) ƒ Wednesday 21 November 2007 (primarily for the commercial sector). The cost per delegate will be £158.63 (£135 plus VAT), which includes copies of all slides and handouts, plus a hot buffet lunch. For more details contact Judy Vincent: judy.vincent@horwath.co.uk or call 020 7842 7319. Approaching deadlines Date Action Friday 19 October Deadline for payment of PAYE deductions, National Insurance Contributions, student loan deductions and subcontractor deductions for Month 6 (unless paying electronically) Friday 19 October Deadline for submitting paper versions of monthly CIS300 subcontractor returns for Month 6 Monday 22 October Deadline for electronic payments of Month 6 deductions Monday 22 October Deadline for electronic submission of CIS300 return for Month 6. 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 September 2007.

Horwath Clark Whitehill - Employers Briefing - September 2007.pdf

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