• HMRC has confirmed that information resulting from changes to the rules will not be used in order to open new investigations into Personal Service Companies for tax years prior to 6 April 2020, unless there is sufficient reason to suspect criminal behaviour or fraud • HMRC has also reiterated its previous announcement that the rules will become applicable to services carried out from 6 April 2020, and not as previously planned, to payments made on or after 6 April 2020 but that related to service delivered before 6 April e.g. if services were provided on 30 March 2020 but not paid until 8 April 2020, the new rules would not now apply. If the services were provided on 8 April 2020, then the new rules will apply • There will be a legal obligation for clients to respond to a request for information regarding their size from the agency or worker and legislation will be updated to address concerns raised over rules as they apply to off- shore companies.
Pensions ‘net pay’ and ‘relief at source
The government has announced a ‘call for evidence’ on how to address the different outcomes for lower earners, depending on whether their pension schemes use the relief at source (RAS) or net pay (NPA) method of tax relief. The call for evidence will be published in the Spring and will seek views from a wide range of stakeholders on how the two systems could be aligned. There are an estimated 1.3 million workers earning below or just above the personal income tax allowance not receiving tax relief on some or all their contributions because their employer’s pension scheme uses NPA; this makes pension saving up to 25% more expensive for them as compared to a worker contributing to a RAS arrangement. The CIPP is a member of a group campaigning to ensure that there is a level playing field for all pension contributors, and strongly believes that the government should address these issues. The CIPP is therefore very pleased at the announcement of a call for evidence on how best to address this anomaly.
For full details, the Employer Bulletin Budget Special is available on GOV.UK.
Coronavirus (COVID-19) Government Response is also available on GOV.UK.
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The Chartered Institute of Payroll Professionals
Payroll: need to know
cipp.org.uk
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