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eNews - May 2015
In this month’s eNews we report on a number of issues including recent warnings over pension scams, guidance on the things to avoid when completing forms P11D and the latest labour market statistics. We also include links to the latest Pensions Regulator auto enrolment guidance for employers with no workers and the updated VAT fuel scale charge rates.
Please contact us if you would like any further information on any of these or any other issues.
With the political parties campaigning well underway in anticipation of the General Election on 7 May and Parliament having been prorogued there are few Government announcements to report this month. However by the time we issue next month’s eNews we will have a new Parliament.
For details of the relevant dates and formal procedures visit the following link.
Internet link: GOV.UK news
Latest labour market statistics
The Office for National Statistics has issued the latest labour market data for the three months to February 2015 which show that unemployment fell by 76,000 to 1.84 million.
Neil Carberry, CBI Director for Employment and Skills said:
‘It’s great to see 248,000 more people in work, the fastest rise in employment in just under a year – thanks to our flexible jobs market.
With real wage growth rising people have a little more money in their pockets. But we need to see a recovery in productivity before wages can rise faster.’
Warning over pension scams
Those approaching retirement are being urged to be aware of a rise in pension scams, as criminals seek new ways to defraud pensioners.
Savers have been urged to be aware of a rise in pension scams, as criminals seek new ways to defraud pensioners. A report produced by Citizens Advice looked at 150 cases where pensioners had fallen victim to fraudsters. The report identified common types of scams which include:
- encouraging pensioners to move their savings into a ‘new’ pension
- fake investment opportunities and
- offering apparently ‘free advice’ and support which actually costs money.
In some cases pensioners are charged a fee for a service that isn’t required, while others are encouraged to part with personal information and bank details, either by email or phone.
Gillian Guy, Chief Executive of Citizens Advice said:
'Scammers see pensioners as a prime target….‘There are many people looking to benefit from the new pension rules, including scammers. Fraudsters can ruin people’s retirement plans by taking a portion or all of a victim’s pension pots.’
The Pensions Regulator (TPR) has recently launched a campaign to alert people to the danger posed by fraudsters.
From 6 April 2015 individuals have more flexibility as to how they use their pension pot, including the option to choose to take all their savings as a cash lump sum. TPR has warned that scammers are exploiting this change by enticing those about to retire with promises of ‘one-off investments‘ or ‘pension loans’ or ‘upfront cash’, most of which are bogus.
Individuals who believe they are being targeted by a pension scam should contact the Pensions Advisory Service on 0300 123 1047. The Financial Conduct Authority’s website also has a list of known scams. Visit scamsmart.fca.org.uk.
TPR guidance for small employers with no ‘staff’
The Pensions Regulator (TPR) has updated its guidance on pensions auto enrolment including what businesses need to do when they have no workers.
If you would like help with auto enrolment please do get in touch.
Internet link: TPR guidance
Lack of awareness of VAT rules
According to research 36% of the UK’s smallest businesses are unaware of the rules governing VAT thresholds.
A third of the UK’s smallest businesses are unaware of the rules governing VAT thresholds, recent research has revealed.
This lack of understanding could mean that approximately 780,000 businesses are at risk of being fined by HMRC.
Meanwhile, according to the research, 9%% of small businesses intentionally limit their trading in order to avoid reaching the VAT threshold.
Under the current rules, where a taxable person (for example an individual, company or partnership) has VAT taxable turnover of more than the current registration threshold of £82,000 in a rolling 12 month period or where turnover is expected to exceed the registration threshold in the next 30 day period then they must register for VAT.
It is important to monitor turnover, as there is a penalty for late registration in addition to the tax payable.
Please contact us if you would like advice on VAT issues.
P11D forms - don’t get them wrong
HMRC have published a list of common errors in the completion of forms P11D. The information is part of the latest Employer Bulletin and we have reproduced the guidance below.
- Submitting duplicate P11D information on paper where P11D information has already been filed online to ensure ‘HMRC have received it’. These duplicates can cause processing problems.
- Using a paper form that relates to the wrong tax year – check the top right hand corner of the first page.
- Not ticking the ‘director’ box if the employee is a director.
- Not including a description or abbreviation, where amounts are included in sections A, B, L, M or N of the form.
- Leaving the ‘cash equivalent’ box empty where you’ve entered a figure in the corresponding ‘cost to you’ box of a section.
- Completing the declaration on the final FPS/EPS submission accurately (for those employers whose software package requires them to be completed) or question 6 in section A of RT 4 form to indicate whether P11Ds are due.
- Not advising HMRC either by paper form P11D(b) or electronic submission that there is no Benefits in Kind & Expenses return to make.
- Where a benefit has been provided for mixed business and private use, entering only the value of the private-use portion – you must report the full gross value of the benefit.
- Not completing the fuel benefit box/field where this applies. This means an amended P11D has to be sent in.
- Incorrectly completing the ‘from’ and ‘to’ dates in the ‘Dates car was available’ boxes. For example entering 06/04/2014 to 05/04/2015 to indicate the car was available throughout that year. If the car was available in the previous tax year, the ‘from’ box should not be completed and if the car is to be available in the next tax year, the ‘to’ box should not be completed.
If you would like help with the completion of the forms P11D please contact us.
Internet link: Employer Bulletin 53
VAT fuel scale charges
HMRC have issued details of the updated VAT fuel scale charges which apply from the beginning of the next prescribed VAT accounting period starting on or after 1 May 2015.
VAT registered businesses use the fuel scale charges to account for VAT on private use of road fuel purchased by the business.
Please do get in touch for further advice on VAT matters.
Internet link: GOV.UK news
VAT recovery on car-derived vans and combi vans
HMRC have issued a list of makes and models of car derived vans and combi vans which VAT registered businesses can use to determine if the VAT paid on the purchase can be reclaimed as input tax.
The issue is that VAT will normally be claimable in full on the purchase of a commercial vehicle. However if the vehicle purchased is a passenger car VAT is not recoverable unless it is used ‘exclusively for the purposes of a business’. Generally cars are therefore VAT ‘blocked’ and no input VAT is recoverable.
The VAT guidance states
‘Motor car means any motor vehicle of a kind normally used on public roads which has three or more wheels and either:
a) is constructed or adapted solely or mainly for the carriage of passengers; or
b) has to the rear of the driver’s seat roofed accommodation which is fitted with side windows or which is constructed or adapted for the fitting of side windows’
Whether or not a vehicle is commercial is not specifically defined but instead the definition of a car excludes:
- vehicles capable of accommodating only one person or suitable for carrying twelve or more people including the driver
- vehicles of more than three tonnes unladen weight;
- caravans, ambulances and prison vans
- special purpose vehicles such as ice cream vans, mobile shops, hearses, bullion vans and breakdown and recovery vehicles
- vehicles constructed to carry a payload of one tonne or more.
Many car-derived vans are not cars for VAT purposes as they have no rear seats, have metal side panels to the rear of the front seats and a load area which is highly unsuitable for carrying passengers etc.
HMRC have issued the clarification due to developments in the car-derived van market as some vehicles with a payload of less than one tonne, have ‘blurred’ the distinction between cars and vans.
If you would like help with this or any other VAT issue please contact us.
Internet link: GOV.UK news