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Budget 2013 changes to Employment Tax
20 March 13 | By: Jas Jhooty
Welcome to the Budget 2013 newsletter from emTax. We are an exciting new consultancy service that offers the very best employment tax advice at affordable prices. We consist of a network of ex-”Big 4” Senior Employment Taxes Managers and can offer exactly the same advice as the Big 4 accountancy firms but at a fraction of their costs. We hope you find this newsletter informative. Please feel free to forward it to anyone who you think may be interested in its contents.
How to beat a PAYE audit
HMRC have been tasked to raise more revenue for the Treasury without raising tax rates. One of the easiest ways for them to achieve this objective is to penalise employers for not being 100% compliant with PAYE legislation. If you are not entirely confident that you are following PAYE to the letter of the law, or if you have not had a HMRC PAYE review or audit for a number of years, it would be prudent to have one of our consultants undertake a dummy Employer Compliance Review on your policies and procedures.
Each of our consultants has (in a former life) operated as a PAYE compliance officer for HMRC and therefore knows what to look out for. The review will consist of reviewing your current policies and documentation and comparing that to what actually happens in practice. This is followed by a sample check of certain records pertaining to employees being paid or reimbursed e.g.
• Payroll operation
• P11D benefits
• Expenses sheets
• Corporate credit card statements
• Petty cash book
A summary report is then usually produced identifying areas of weakness and any potential liabilities along with recommendations on how to put things right and any potential opportunities to save money.
We can then help you to put these recommendations into practice by assisting you to update your policies and procedures, and also train staff to prevent errors from reoccurring.
These measures will allow you to be confident at the time of the actual PAYE audit, i.e. that you have got your house in order and also you will not face any nasty surprises.
If you are interested in finding out more please contact emTax on 0345 548 3680 or email us at firstname.lastname@example.org
Budget 2013 changes
Below is a quick summary of the major employment tax changes announced in this year’s budget.
Personal allowance changes
Personal allowances for people born after 5th April 1948 have been increased to £10,000 for 2014/2015. The basic rate limit has been reduced to £31,865 for 2014/15
Interest free loans limit to employees doubled
From 6 April 2014 the £5,000 interest free loan benefit-in-kind threshold has been doubled to £10,000. If a loan does not exceed this threshold at any time in the tax year it will be exempt from tax.
Company car tax rates
For 2015-16, there are two new appropriate percentage bands for company cars emitting 0-50g of carbon dioxide (CO2) per kilometre (5 per cent) and 51-75g CO2 per km (9 per cent).
In addition, as announced at Budget 2012, the remaining appropriate percentages are increased by two percentage points for cars emitting more than 75g CO2 per km, to a new maximum of 37 per cent.
Budget 2013 also sets out rates for company cars emitting 75g CO2 per km or less for 2016-17. In addition the Budget provides a commitment that in 2017-18 there will be a 3 percentage point differential between the 0-50 and 51-75 g/km CO2 bands and between the 51-75 and 76-94 g/km CO2 bands. In 2018-19 and 2019-20 there will be a 2 percentage point differential between the 0-50 and 51-75 g/km CO2 bands and between the 51-75 and 76-94 g/km CO2 bands.
New Employment Allowance
A new Employment Allowance will be introduced from 6 April 2014 that will cut the first £2,000 off the amount of employer’s Class 1 national insurance contributions.
Get in touch
We at emTax value your comments and views. Please let us know If there is any aspect of employment taxation that you wish to be covered in future newsletters.