Employment Tax Expert

This employment tax expert is warning employers to be extremely careful when it comes to employer tax compliance as HMRC have announced that as part of it’s drive to move more of its business online and reduce the cost of the services they currently provide, they will no longer routinely send employer information by post.

They have replaced the Employer and Budget Packs with online guidance and all the forms and guidance you need to operate your payroll is to be put online. They have stated that they expect the vast majority of employers to use this route as opposed to requesting paper products. They will only supply paper products to those employers who are exempt from online obligations or who are unable to access the internet, so you have been warned!

This employment tax expert says, let’s have further tax investigations into expenses claimed by MPs and Peers following the conviction of Lord Taylor of Warwick of false accounting over his House of Lords expenses.

The peer had argued the six claims he had submitted – totalling £11,277.80 – were made in good faith. He acknowledged that he had contravened the expenses rules, but argued he had done so because it was a common practice amongst peers to claim items “in lieu of a salary” – please, you are a qualified barrister and quite frankly in any other walk of life this would be seen as quite simply stealing and at the bare minimum you would be out of a job, let alone facing the full wrath of the judicial system.

Stephen O’Doherty, reviewing lawyer for the Crown Prosecution Service special crime division, said: “No one could sincerely believe that a home in which they had no financial interest, had never lived in and had scarcely visited could count as their main residence.

“Or that it was permissible to claim for driving between Oxford and Parliament when they had not done so.

“Yet Lord Taylor claimed exactly that and landed the taxpayer with a bill of more than £11,000.

“A jury has seen through his dishonesty by finding him guilty of theft by false accounting. He will now face the consequences of his actions.”

In her closing speech to the jury, Helen Law, prosecuting, said the case was about “where Lord Taylor was living and where he wasn’t living”. Speaking of the trips he claimed for, she said: “Those were journeys that didn’t happen from a home that wasn’t his.

“Lord Taylor knew those facts and he said he didn’t attempt to mislead anyone. I’m going to suggest that as a lawyer and as a member of the House of Lords, the alarm bells would have been ringing loud and clear.”

Despite living in Ealing, west London, Lord Taylor nominated a property in Oxford as his main residence, which is where his half-nephew lives. In fact according to the reports the peer had never stayed overnight there and had only ever visited the property twice. He subsequently submitted six claims between March 2006 and October 2007 for overnight stays in Oxford and mileage to and from property. I will leave it to my readers to decide on the best course of action for this person!!!

This employment tax expert asks, when is someone in government going to take responsibility for the continued mess that is HMRC rather than just passing the buck and making media statements (this is not a political statement as no government has seen fit to deal with the problems) the latest is:

Matthew Oakshott, the Liberal Democrat Treasury spokesman, who is quoted as follows:

“HMRC just lurches from one crisis to the the next. Any business that ran its affairs like this would have gone bust years ago.”

and this was in response to The Sun reporting that on top of the 6M over/underpayments already being followed up by HMRC, a further 1M have been identified.

HMRC’s money grabbing PAYE/NIC compliance drive has resulted in numerous very public problems that are impacting on individuals and companies  alike. This employment tax expert believes that a number of its actions have not been thought through and will lead to more real issues coming to the fore.

So when I heard that HMRC have announced that they are writing off debts of 1.9m people relating to 2006/2007, amounting to approximately £500m, did I think that common sense had prevailed, well sort of but not for the same reasons joe public may think. The general public were whipped up into a frenzy by the media regarding HMRC’s PAYE/NIC end of year reconciliations and the resultant potential tax bills faced by many, so this write off is all power to the pressure of the general public and the media – not one bit. The reason for the write off, and let’s be clear writing off £500m in the current climate should not to be taken lightly, is that HMRC are of the view that it will be unlikely to be able to collect the money owed before next April and it’s at this point the tax debt becomes time barred, as tax underpayments now have to be reclaimed within 4 years (previously 6 years) of the relevant tax year.

So, generous no, realistic probably yes taking into account the reduction in staff, office closures etc but if this money has been counted in the spending review where else is it going to be taken from now …

Despite “considerable sympathy” for arguments against the new Agency Workers Regulations (”Regulations”), the Government announced on 19 October 2010 that it will not be amending the Regulations.

Instead, the time between now and implementation of the Regulations on 1 October 2011 will be used to develop guidance. This will developed by the Department for Business Innovation and Skills (”BIS”) in conjunction with key stakeholders, representing the interests of agencies, hirers and agency workers. BIS hope to publish draft guidance in early 2011 to allow agencies and hirers time to adjust to the changes in advance of the Regulations coming into force.

The Regulations form the mechanism that will implement the European Union’s Agency Workers Directive (AWD). This is designed to provide agency workers with the same pay and rights as permanent employees performing the same duties.

This means that:

• After 12 weeks in a given job;
• Temporary agency workers will be entitled to receive equal treatment to comparable permanent employees;
• This will include pay, overtime rates, holiday entitlement and other basic working and employment conditions, as if recruited directly.

Recruitment firm Adecco recently carried out research among UK HR professionals in which almost two-thirds (61%) did not realise the Regulations would come into force in a year’s time. So be warned and be prepared!