14 Nov 2013 06:42pm

Weekly tax update

Our look at the technical updates and notices in the tax world this week

New general counsel at HMRC

HMRC has announced that it has appointed Gill Aitken as its general counsel and solicitor.

She takes over from Anthony Inglese who is retiring at the end of January after nearly six years in the role and over 38 years in the government legal service.

Aitken is currently director general of legal services at the Department for Work and Pensions (DWP), where she was responsible for the legal teams at both the DWP and Department of Health, as well as at DWP’s professional services.

Welcoming her appointment, HMRC chief executive Lin Homer said, “The Solicitor’s Office plays a vital role in supporting HMRC to collect the tax that is due, from providing legal advice on complex issues to our tax professionals to pursuing legal challenges in tax tribunals.

She said that Aitken would build on the strengths of HMRC’s legal expertise and successes.

“HMRC’s solicitors office has a deservedly high reputation across government,” Aitken added, “and the prospect of being involved in the important work that HMRC does for the country is both challenging and exciting.”

New employment allowance

HMRC has worked out that up to 206,000 businesses in London could see their national insurance contributions cut by up to £2,000 when the new employment allowance is introduced in April 2014. Around 74,000 of them will pay no employer NICs at all.

They will be among the 1.25m businesses and charities across the UK that will benefit from the new allowance.

Under the new regime, a business that employs one person on £22,400 will not pay employer NICs on that employee’s earnings. A business employing five adults full-time on the national minimum wage will see their employer NICs bill reduced by over 80%.

The allowance, which is on a yearly basis, will be simple to claim and easy to administer, HMRC says. It will delivered through standard payroll software and HMRC’s real time information system. Businesses will confirm their eligibility through their regular payroll processes and up to £2,000 will be deducted from their employer NICs liability over the course of the year.

Businesses paying NICs of £2,000 or less will pay no employer NICs at all. Over 90% of the benefit of the new allowance will go to businesses with fewer than 50 employees.

Up to 35,000 charities with employees are expected to benefit from the allowance by around £45m a year.

“Small businesses are the lifeblood of our economy and we want to do what we can to support them,” said Treasury exchequer secretary David Gauke.

“The employment allowance will reduce the cost of taking on new staff, supporting hundreds of thousands of businesses across the UK that are ambitious to grow by reducing the cost of hiring their first employee or growing their workforce.”

RTI and pensioners

HMRC has come across a number of real time information reporting errors relating to pensioners, particularly when they have been moved from one PAYE scheme reference to another. This has resulted in incorrect codes and forms being issued.

To try to correct these teething issues, the department has issued a reminder of the correct procedures to follow and advice on how to get it right. This covers timing of the first full payment submission and its start date, and completing the occupational pension bereavement field.

Customs information papers issued

HMRC has published two new customs information papers. The first is aimed at importers and their agents and concerns repayment of customs duty, while the second relates to a change in reporting requirements for anyone who is required to report passenger information in advance.

Delay to guidance on landfill tax

HMRC has delayed publication of the finalised guidance on lower rating for landfill tax purposes. It had originally proposed to produce it by 11 November but, because of the interest in September’s consultation – it received 120 responses, it has decided to work with the Environmental Services Association (ESA) and the United Resource Operators Consortium (Uroc) to help them develop specific proposals to provide greater clarity for operatives throughout the waste industry on the evidential requirements for lower rating.

In the meantime, the existing guidance applies.

Tax receipts survey

HMRC is currently running a consultation to gain a better understanding of how its experimental release of statistics about tax receipts between England, Wales, Scotland and Northern Ireland is being used.

It is also keen to hear from users about how the methodologies it is using might be improved.

The deadline for comments (an online survey) is 31 March 2014.

Offshore funds list updated

The reporting offshore funds list has been updated to include the funds that have entered the Reporting Fund Regime as at 11 November 2013. There are now more than 27,000.

More tax news and analysis from this week

HMRC needs more investment, not less

The last few years have been “grim” for anyone involved in tax administration, thanks in no small part to HMRC cutbacks and its “them and us” approach, says leading tax expert Paul Aplin

FTT: the law of unintended consequences

If someone suggested a tax which is likely to raise relatively little revenue, may divert business to other locations and most importantly could be passed on by the sector that it is actually intended to target, you might think it had little chance of being enacted. However, this being the financial transaction tax, normal criteria for evaluation do not apply

Supreme Court rejects Cotter

HMRC has won a significant victory in the Supreme Court which could see it claw back around £0.5bn in avoided tax

KPMG’s Kilshaw joins EY tax team

David Kilshaw, former head of KPMG’s private client tax practice, will join EY as partner in 2014

New partners as Saffery Champness ramps up northern business

Top 20 chartered accountancy firm Saffery Champness has appointed two new partners at its Manchester office

HMRC payroll watch list grows

The number of businesses under suspicion of payroll fraud has jumped by almost a third

Pett Franklin hires Deloitte partner

Tax and share scheme adviser Pett Franklin has appointed Deloitte partner Stephen Woodhouse

BDO poaches two tax partners

Two new tax partners are set to join BDO’s tax team from RSM Tenon and PwC

Julia Irvine