Weekly Summary and Forum Highlights 003Thursday, August 12th, 2010
A number of this week’s news items are prompted by HMRC changes to the Employment Income Manual, the internal guidance for tax officers that is also made public for the benefit of agents, advisers and… writers. Of these five items, the one that is probably the most significant is the introduction by HMRC of a simplified method of valuing cycles for tax purposes when they are transferred to employees at the end of the loan period.
Included among the various small changes to the Employment Income Manual are “clarifications” to the tax and NICs liabilities that arise when employers pay parking and speeding fines and the congestion charge. As a result, we have updated our Employer FAQ on this subject. Unfortunately, the HMRC’s clarifications only seem to make the subject more complicated than ever.
A decision of the European Court of Justice on 29 July is currently causing some commotion. It involves the handling of the VAT on retail vouchers provided under a flexible benefits scheme. The court’s ruling was to the effect that, where an employer buys vouchers at a price that includes VAT and supplies them in return for a salary reduction, they must be accounted for at a price that includes VAT. The implications of this decision in the context of Astra Zeneca’s circumstances, are not yet clear. We will review the decision and its implications in detail when HMRC decides how to apply it to the provision of benefits in the context of flexible benefits and salary sacrifice schemes.
Questions posted over the past week
- What do you think about HMRC’s “Real-Time Information” and “Centralised Deductions” proposals?
- Isn’t “Real-Time Information” just a version of monthly P35s?
- Another reason for introducing “Real-Time Information”
- How should the accommodation offset be shown on the payslip?
- A director, whose NICs were calculated using an annual earnings period, left and is returning as a consultant. How should his NICs be calculated now?