HMRC Apologise for Payment Delay

HMRC have apologised to small employers, those with less than 50 employees, awaiting their £150 tax-free incentive payment in respect of the 2006/07 tax year. The incentive payment is due where an employer, or their agent, successfully filed their Employer’s Annual Return form P35 and the supporting employee forms P14s online.

According to HMRC the large numbers of people claiming their payment by cheque has led to a delay and many employers may not receive their cheques until December 2007.

HMRC advise that requests for payment by cheque should only be made by those employers who have little or no PAYE deductions to pay over. Employers who have to make monthly or quarterly PAYE payments to HMRC are able to reduce their payment by the £150 incentive payment.

Internet link: HMRC tax free incentive payments

VAT Change for Invoices

HMRC have issued guidance on changes to the rules regarding the information to be shown on invoices issued from 1 October 2007. Some of the changes are very minor and reflect current normal business practice. However some businesses will need to amend their current invoices to comply with the guidance.

The businesses most likely to be affected by the new requirements are those:

  • using the margin scheme for second-hand goods, antiques, works of art, and collectors’ items
  • involved in making travel related supplies that fall within the scope of the Tour Operators’ Margin Scheme
  • involved in intra EU supplies of goods and services
  • making supplies where the customer accounts for the VAT. This VAT treatment is sometimes known as a ‘reverse charge.’

Please do get in touch if you would like further clarification of how these changes will affect you.

Internet Link: HMRC guidance

HSE Launch Risk Assessments Factsheets

The Health and Safety Executive (HSE) has produced a range of risk assessment factsheets for different business sectors. According to the HSE, the example risk assessments aim to show businesses that ‘risk assessments are about identifying practical actions to protect people from harm and injury, not a bureaucratic experience’.

Business types already covered include contract bricklayers, an estate agency, a motor vehicle repair shop, a convenience store/newsagent, an office, general office cleaning and a warehouse. Further examples will be added to the website from time to time.

Internet Link: HSE risk examples

VAT Fuel Scale Charges

The VAT fuel scale charge is the output VAT charge payable by VAT registered businesses which allow their employees to claim all the fuel expenses on their company cars and reclaim VAT on the full amount of fuel purchased without making an adjustment for private use.

It was announced in the Budget earlier this year that for VAT periods commencing on or after 1 May 2007 the fuel scale charges should be calculated on the basis of the car’s carbon dioxide (CO2) emissions. A business with a VAT year of 30 September making normal quarterly returns will make returns for 1 October to 31 December, 1 January to 31 March, 1 April to 30 June and 1 July to 30 September. The first quarterly return commencing after 1 May will be the period 1 July to 30 September 2007 which is due for submission and payment by the end of October.

VAT fuel scale charges for 3 month periods
CO2 band VAT fuel scale charge, 3 month period
VAT on 3 month charge
VAT exclusive
3 month charge
140 or below 182.00 27.11 154.89
145 195.00 29.04 165.96
150 207.00 30.83 176.17
155 219.00 32.62 186.38
160 231.00 34.40 196.60
165 243.00 36.19 206.81
170 256.00 38.13 217.87
175 268.00 39.91 228.09
180 280.00 41.70 238.30
185 292.00 43.49 248.51
190 304.00 45.28 258.72
195 317.00 47.21 269.79
200 329.00 49.00 280.00
205 341.00 50.79 290.21
210 353.00 52.57 300.43
215 365.00 54.36 310.64
220 378.00 56.30 321.70
225 390.00 58.09 331.91
230 402.00 59.87 342.13
235 414.00 61.66 352.34
240 or above 426.00 63.45 362.55

For monthly or annual VAT return periods separate tables are available.

In order to calculate HMRC’s guidance provides the following advice about obtaining CO2 emissions:

‘The Society of Motor Manufacturers and Traders Limited website contains information on CO2 emissions for vehicles from 1997. In addition, the Vehicle Certification Agency Car Fuel Data website allows you to search on specific cars, and further historical information is available at The Vehicle Certification Agency. For vehicles which do not have a CO2 emissions figure, you should identify the CO2 band based on engine size, as follows:

  • if its cylinder capacity is 1,400 cc or less, use CO2 band 140 or below
  • if its cylinder capacity exceeds 1,400 cc but does not exceed 2,000 cubic centimetres, use CO2 band 175
  • if its cylinder capacity exceeds 2,000 cc, use CO2 band 240 or above.’

Please do get in touch if you would like help in this area.

Internet Link: HMRC VAT scale charges and HMRC motor expenses guide

Tax Help for those Affected by Floods

The Chancellor of the Exchequer, Alistair Darling, has announced that HMRC will introduce a series of measures to help individuals and businesses affected by the recent severe flooding. The Government will introduce legislation in next year’s Finance Bill to allow HMRC to waive interest and surcharges on tax paid late due to the floods.

Financial Secretary to the Treasury and Minister for HMRC, Jane Kennedy, said;

“I want to ensure that people affected by the flooding do not have to worry about tax or their tax credit award at this difficult time. Where individuals or businesses are affected by the flooding, I would ask them to get in touch with HMRC who will be able to offer practical help. I hope that, by offering this help now and the reassurance that HMRC will back-date their help, we can ease some of the anxiety that is affecting so many people and business.”

HMRC will be able to:

  • defer collection of taxes and duties, or agreeing instalment arrangements where customers are unable to pay as a result of severe hardship;
  • waive interest, surcharges and penalties for the period during which collection of tax or duty is deferred;
  • introduce practical arrangements where individuals and businesses have lost records in the flooding;
  • suspend debt collection proceedings;
  • defer compliance checks and investigations.

HMRC will not charge penalties where they are satisfied that customers have missed deadlines as a result of the flooding.

HMRC ask that people contact them if the flooding has made it difficult for them to send in their tax credit renewals on time or if they have a change of circumstances to notify. Similarly customers having difficulty paying their taxes or duties, or sending in tax returns or other information as a result of the flooding, should also get in touch as soon as possible.

A new helpline has been set up to support those affected on 0845 300 157.

Internet Link: HMRC help for flood victims