Staff tax tips for this week are listed below. We have added links to more detail as appropriate. We will be adding a least two posts a month under this heading so please ask your staff to add their names to our newsletter distribution list that will link to these articles.
Umbrella companies in HMRC’s Spotlight
HMRC are upping their challenge to have certain schemes classified as tax evasion. In their Spotlight 45 report they say:
Some people that are employed through agencies and umbrella companies are signing up to arrangements that claim to save them tax, but are in effect tax avoidance schemes.
Most employment agencies and umbrella companies operate within the tax rules. However, some umbrella companies and agencies promote arrangements that claim to be a ‘legitimate’ or a ‘tax efficient’ way of keeping more of your income by reducing your tax liability.
What are the badges of trade?
Don’t know? These are the factors that HMRC take into account when deciding if a person(s) are engaged in a business activity. These criteria can be used to bring rogue traders into tax, but also deny loss relief to individuals who are unlikely to make profits from their endeavours.
Finance Bill draft clauses 2018-19
Way back in July 2018, HMRC published a number of draft clauses for the forthcoming Finance Bill.
In particular you should be aware that:
- The qualifying criteria for rent-a-room relief is to change,
- The requirement to produce receipts to cover scale rate expense payouts is to be abolished,
- The donor benefit rules are to be changed for Gift Aid,
- Changes to Optional Remuneration Arrangements for taxable cars and vans,
- Loss relief rules for corporation tax are changing.
And much more. Take a look at the full range of changes here.