Finance Act 2011 gains Royal AssentMonday, July 25th, 2011
These notes list the key payroll-related changes in the new Act and provide links to earlier newsletter discussions.
The Finance (No. 3) Bill 2010-11 gained Royal Assent on 19 July and became the Finance Act 2011. The Act contains a number of payroll-related provisions, most of which have been discussed to some extent in our newsletters. The following is a brief summary of the key points of interest, with links to earlier (and current) newsletter explanations. Reference is also made to the respective section and schedule of the new Act.
- Confirmation of the basic rate limit (£35,000) and the personal allowance for those aged under 65 (£7,475) – effective 6 April 2011. (s.1)
- New “disguised remuneration” PAYE obligations for employment income provided through third parties, with potential liabilities arising from 6 April 2011 onwards. (s.26, sch.2)
- Tax exemptions for childcare vouchers and employer-contracted childcare:
- reduction in the tax relief available for high earners – effective tax year 2011/12 onwards. (s.35, sch.8)
- relaxation of the “generally-available” condition for the tax exemption in relation to low-paid employees where the benefits are provided in conjunction with salary sacrifice or flexible benefits schemes – effective tax years 2005/06 onwards. (s.36)
- Reduction in the threshold between low emissions cars and petrol/diesel cars from 100 g/km to 95 g/km – effective tax year 2013/14 onwards. (s.51)
- Taxation of benefits provided under pension schemes – effective tax year 2011/12 onwards. (s.65, sch.16)
- Reduction in the annual allowance for pension schemes – effective tax year 2011/12 onwards. (s.66, sch.17)
- Reduction in the lifetime allowance for pension schemes – effective tax year 1012/13 onwards. (s.67, sch.18)
- Powers for HMRC to require an employer to pay a security in advance of future PAYE liabilities – effective 6 April 2011. (s.85)
- Powers for HMRC to give notice to employers to obtain data – effective 1 April 2012. (s.86, sch.23,24)