Business rates appeal proposals are a ‘barrier to justice’

The Enterprise Bill is currently going through Parliament. Part of the Bill reforms the business rates appeals system. The government’s changes have been criticised by rates experts and business groups, amid concerns that the changes will act as a ‘barrier to justice’.

The Valuation Office Agency (VOA), which is part of HMRC, is responsible for compiling and maintaining non-domestic rating lists. Currently officers of the VOA are prevented from sharing the information they collect about properties and ratepayers with local government. This means that businesses have to provide the same information twice to the VOA and local government. It can also mean that the properties have to be inspected by both the VOA and the local authority.

The Bill therefore allows the VOA to disclose information to a ‘qualifying person for a qualifying purpose’ such as a local authority.

The changes have been criticised by some people. They say the legislation will act as a ‘barrier to justice’ for businesses seeking to appeal.

Transparency around how business rates or tax on commercial property is measured has long been called for by small businesses. Critics of the bill claim that it has failed to address this issue, as it permits the VOA to share rate measurement information with local authorities but not with individual businesses.

Jerry Schurder, former chairman of the Royal Institution of Chartered Surveyors said:

‘In business rates, your own liability depends not on your own property but what’s being paid by lots of other people and you have no right to obtain that information. In any other tax, the taxpayer has the relevant information to make an appeal but not on rates.’

Meanwhile John Allan, national chairman at the Federation of Small Businesses, commented:

‘While we support moves to make it easier to navigate business rates appeals, we have concerns around the proposals in the Bill.

Their primary aim seems to be reducing the number of appeals by making the process more difficult, rather than by addressing the underlying issues, in particular making the appeals system and the VOA more transparent.

If increased transparency is not delivered, then confidence in the business rates system will continue to be undermined.’

Internet links: Link to legislation  Telegraph

Government toughens National Minimum Wage (NMW) sanctions

The government has announced a package of measures including tougher NMW penalties to ensure employees receive the pay they are entitled to.

The measures include:

  • doubling the penalties for non-payment of the NMWand the new National Living Wage
  • increasing the enforcement budget
  • setting up a new team in HMRC to take forward criminal prosecutions for those who deliberately do not comply
  • ensuring that anyone found guilty will be considered for disqualification from being a company director for up to 15 years

Business Secretary Sajid Javid said:

‘There is no excuse for employers flouting minimum wage rules and these announcements will ensure those who do try and cheat staff out of pay will feel the full force of the law.

This one nation government is committed to making work pay and making sure hardworking people get the salary they are entitled to.’

The government has announced the introduction of a new team of HMRC compliance officers who will investigate the most serious cases of employers not paying the NMW and National Living Wage. The team will have the power to use all available sanctions, including penalties, prosecutions and naming and shaming the most exploitative employers.

Stiffer penalties

Employers who fail to pay employees the minimum wage will have to pay penalties which will be up to twice what they currently are. This reform is intended to increase compliance and make sure those who break the law face tough consequences.

The calculation of penalties on those who do not comply will rise from 100% of arrears to 200%. This will be halved if employers pay within 14 days. The overall maximum penalty of £20,000 per worker remains unchanged.

Other changes

In other related changes a new Director of Labour Market Enforcement and Exploitation will be created to oversee enforcement of the NMW, the Employment Agency Standards Inspectorate and the Gangmasters Licensing Authority. The Director will set priorities for enforcement based on a single view of the intelligence about exploitation and non-compliance.

A consultation will be launched in the autumn on the introduction of a new offence of aggravated breach of labour market legislation. The consultation will also propose giving the Gangmasters Licensing Authority additional investigatory powers and a wider remit to tackle serious labour exploitation more effectively.

The government has also announced they will improve the guidance and support made available to businesses on compliance. They will also work with payroll providers to be sure payroll software contains checks that staff are being paid what they are entitled to.

If you would like help with payroll or employment law please do get in touch.

Internet link: GOV News

Making tax simpler for charities

In September HMRC updated their detailed guidance notes which outline how the tax system operates for charities. The notes include how to apply to be recognised as a charity for tax and the operation of gift aid and payroll giving.

Over the last five years the government has brought in a range of changes to the tax system to make it simpler for charities to make the most of tax reliefs, so that more money can go to good causes.

Gift aid small donation scheme

Through the gift aid small donations scheme charities can claim a gift aid-style top-up on small donations eg a donation to a charity vendor in the street, up to a limit of £5,000 per year. This limit will increase to £8,000 per year from April 2016.

Charities online

Charities can submit claims for gift aid tax relief online which speeds up the claims process. 95% of charities now use this online system and the claims are processed within five working days.

HMRC outreach team

To date an HMRC outreach team has delivered face-to-face presentations to over 650 charities to spread awareness and help charities to successfully claim tax relief.

Community amateur sports clubs

The government has amended the law so that local sports clubs registered as community amateur sports clubs can receive corporate gift aid to help these clubs benefit their local communities.

Social investment tax relief

The social investment tax relief scheme has been created to encourage people to invest in social enterprises including charities. Individuals making an eligible investment will be able to deduct 30% of the cost of that investment from their income tax liability.

Lower IHT rate

If people leave at least 10% of the net value of their estate (its worth, minus any debt, other liabilities and reliefs) to charity, then 36% inheritance tax can be paid instead of 40%.

If you want further details on the tax treatment of charities please contact us.

Internet links: GOV.UK news  GOV.UK guidance

Autumn Statement date announced

The government has announced that the date of the Autumn Statement will be 25 November 2015.

The Chancellor of the Exchequer, George Osborne, has announced that there will be an Office for Budget Responsibility forecast alongside the Spending Review on Wednesday 25 November 2015. The government will therefore publish a joint Autumn Statement and Spending Review on this date.

We will keep you informed of key announcements.

Internet link: GOV.UK News

Deadline for ‘paper’ self assessment tax returns

For those individuals who have previously submitted ‘paper’ self assessment tax returns the deadline for the 2014/15 return is 31 October 2015. Returns submitted after that date must be submitted electronically or they will incur a minimum penalty of £100. The penalty applies even when there is no tax to pay or the tax is paid on time.

If you would like any help with the completion of your return please do get in touch.

Internet link: GOV.UK Self Assessment

Advisory fuel rates for company cars

New company car advisory fuel rates have been published which took effect from 1 September 2015. Due to the reduction in fuel prices many rates have reduced this quarter so please take care to update your expenses payments. However, the guidance states: ‘You can use the previous rates for up to one month from the date the new rates apply’. The rates only apply to employees using a company car.

The advisory fuel rates for journeys undertaken on or after 1 September 2015 are:

Engine size Petrol
1400cc or less 11p
1401cc – 2000cc 14p
Over 2000cc 21p
Engine size LPG
1400cc or less 7p
1401cc – 2000cc 9p
Over 2000cc 14p
Engine size Diesel
1600cc or less 9p
1601cc – 2000cc 11p
Over 2000cc 13p

Other points to be aware of about the advisory fuel rates:

  • Employers do not need a dispensation to use these rates. Employees driving employer provided cars are not entitled to use these rates to claim tax relief if employers reimburse them at lower rates. Such claims should be based on the actual costs incurred.
  • The advisory rates are not binding where an employer can demonstrate that the cost of business travel in employer provided cars is higher than the guideline mileage rates. The higher cost would need to be agreed with HMRC under a dispensation.If you would like to discuss your car policy, please contact us.

    Internet link: Advisory fuel rates

Auto enrolment ‘engagement’ and calculation tool

The Pensions Regulator (‘TPR’) has announced that following consultation they will develop a basic automatic enrolment tool. The basic tool should be available to download from TPR’s website by the end of 2015.

TPR consulted earlier this year on proposals to develop a basic tool to support those employers who use HMRC’s Basic PAYE Tools (BPT) to carry out their payroll function. HMRC’s BPT are used by many small employers to calculate PAYE, national insurance contributions and statutory payments such as Statutory Maternity Pay but has no pension function.

According to the TPR approximately 200,000 small and micro employers who use BPT are due to stage over the next two and half years and TPR’s experience indicates that using appropriate software either through payroll or pension provider systems helps employers to comply with their duties.

The majority of consultation responses were supportive of the TPR’s proposal, although some payroll firms and pension schemes were against the regulator developing a new tool.

Executive Director for Automatic Enrolment Charles Counsell said:

‘We will continue to recommend that BPT users consider using software with integrated automatic enrolment functionality, but by developing this basic contribution calculation tool we aim to ensure that BPT users have access to the help they need to support compliance.

The decision to develop a basic tool is recognition that significant numbers of BPT users will not seek a more integrated solution and will attempt manual calculations. This is another example of how The Pensions Regulator seeks to develop new ways to ensure we are meeting the needs of the diverse group of employers due to stage in the coming years.’

TPR has also issued the third edition of ‘Automatic enrolment: Commentary and analysis’, which reports on the impact of automatic enrolment and the increasing participation in workplace pension schemes. The commentary states:

  • By March 2015, over 5.2 million workers had been successfully automatically enrolled since the reforms began in 2012, an increase of more than 2.2 million workers from 2014, and 4.2 million from 2013. 
  • Automatic enrolment is helping to turn around the decade-long decline in pension provision, with 59% of all employees now active members of a pension scheme, compared with just 47% in 2012. This increase suggests that pension saving is now becoming the norm. 
  • The pensions landscape has been transformed as the majority of people are enrolled into defined contribution schemes. We have witnessed the growth in master trusts – 94% of employers who chose a trust-based scheme opted for a master trust. 
  • We now expect that significantly more employers will be subject to automatic enrolment duties than originally anticipated, mainly due to an increase in the number of new companies that have started up, and fewer going out of business than was forecast. We have revised the staging profile accordingly, so that it reflects the 1.8 million employers we expect to help through the automatic enrolment process from now until 2018.

If you would like help with your payroll or advice on Pensions Auto Enrolment please contact us.

Internet links: Press release  Commentary