Finance Act 2011 gains Royal Assent

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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)

Further information:

Finance Act 2011

Tags: Childcare vouchers, finance bill 2011, new tax proposals, PAYE, pension schemes, Recent Payroll News, taxation of benefits, taxation of pensioners, travel expenses

This entry was posted on Monday, July 25th, 2011 at 12:57 and is filed under 2011 Finance Act. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.