PAYROLL INSIGHT
● Conditionality: hidden economy – Following a consultation – Tackling the hidden economy: public sector licensing, published December 2017 – the government will consider legislating at Finance Bill 2019–20 to introduce a tax registration check linked to renewal processes for some public sector licences. Applicants would need to provide proof they are correctly registered for tax in order to be granted licences. This would make it more difficult to operate in the hidden economy, helping to level the playing field for compliant businesses. ● International tax enforcement: disclosable arrangements – The government is enacting new legislation to allow the introduction of international disclosure rules about offshore structures that could avoid or be misused to evade tax. ● Offshore tax compliance strategy – The government will publish an updated offshore tax compliance strategy. This will build on the progress the UK has made in tackling offshore tax evasion and non- compliance since the previous strategy was published in 2014. n
the launch of pensions dashboards that will for the first time allow an individual to see their pension pots, including their state pension, in one place. The Budget confirmed that the Department for Work and Pensions (DWP) will consult later this year on the detailed design for pensions dashboards, and on how an industry-led approach could harness innovation while protecting consumers. DWP will work closely with the pensions industry and financial technology firms. Tax avoidance and evasion A further package of measures was announced to tackle tax avoidance and evasion, including the following. ● R&D tax relief for small and medium-sized enterprises – From 1 April 2020, the amount of payable research and design (R&D) tax credit that a qualifying loss-making company can receive in any tax year will be restricted to three times the company’s total PAYE and NICs liability for that year. The government will consult on this change. ● Protecting taxes in insolvency – From 6 April 2020, when a business
enters insolvency, more of the taxes paid in good faith by its employees and customers, and temporarily held in trust by the business, will go to fund public services rather than being distributed to other creditors. This reform will only apply to taxes collected and held by businesses on behalf of other taxpayers (i.e. value added tax, PAYE income tax, employee NICs, and construction industry scheme deductions). ...persons involved in tax avoidance, evasion or phoenixism will be jointly and severally liable... ● Tax abuse and insolvency – Following Royal Assent of Finance Bill 2019–20, directors and other persons involved in tax avoidance, evasion or phoenixism will be jointly and severally liable for company tax liabilities, where there is a risk that the company may deliberately enter insolvency.
Scottish arrestment
New rates to apply in April 2019 By virtue of provisions of the Debtor Scotland Act 1987, Scottish ministers have made the Diligence against Earnings (Variation) (Scotland) Regulations 2018 (https://bit. ly/2RZqH7u) (‘the Regulations’) increasing the amounts used in calculating a deduction from a debtor’s
wages where an arrestment operates. The increases, reflecting movement in earnings since 2015, have effect from 6 April 2019. The Regulations do not apply to existing diligences until intimated to employers, unless employers choose to apply them. The daily protected earnings rate for current maintenance arrestments or
conjoined arrestment orders, is increased to £17.42 (from £16.24). New tables operate for calculating deductions in respect of earnings arrestments. (Note that when applying a percentage, the calculation should be done to two decimal places of a penny and the result rounded to the nearest whole penny, with an exact half penny being rounded down.) n
Table B – Monthly – Net earnings
Table C – Daily – Net earnings
Table A – Weekly – Net earnings
Deduction
Deduction
Deduction
Not exceeding £529.90 Nil
Not exceeding £17.42 Nil
Not exceeding £122.28 Nil
£4.00 or 19% of earnings exceeding £122.28, whichever is the greater £60.75 plus 23% of earnings exceeding £442.00 £111.92 plus 50% of earnings exceeding £664.50
£15.00 or 19% of earnings exceeding £529.90, whichever is the greater £263.23 plus 23% of earnings exceeding £1,915.32 £485.00 plus 50% of earnings exceeding £2,879.52
£0.50 or 19% of earnings exceeding £17.42, whichever is the greater £8.65 plus 23% of earnings exceeding £62.97 £15.95 plus 50% of earnings exceeding £94.67
Exceeding £529.90 but not exceeding £1,915.32 Exceeding £1,915.32 but not exceeding £2,879.52
Exceeding £122.28 but not exceeding £442.00
Exceeding £17.42 but not exceeding £62.97
Exceeding £442.00 but not exceeding £664.50
Exceeding £62.97 but not exceeding £94.67
Exceeding £664.50
Exceeding £2,879.52
Exceeding £94.67
| Professional in Payroll, Pensions and Reward | December 2018 / January 2019 | Issue 46 20
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