CHANGE TO TAX CODE USED ON TRIVIAL COMMUTATION AND SIMILAR OTHER LUMP SUM PENSION PAYMENTS
14 November 2012
We published news last week that HMRC would be publishing a consultation on the draft PAYE amending regulations.
The draft regulations and a Technical Note are to be published on HMRC’s legislation pages and from the Pensions News page on the HMRC website, on 15 November 2012. There will also be a link from ‘What’s new’ on the HMRC homepage.
The document below gives further details of a change to the taxation of certain pension payments which forms part of the amendments.
Tax code on trivial commutation and lump sum pension payments
If you wish to respond to the consultation, please send your responses to the point of contact for this consultation (contact details will be published alongside the draft regulations on 15 November).
GOVERNMENT CONSIDERING REDUCTION OF TAX AND NI IN NEW ‘EMPLOYEE OWNERS’ PROPOSALS
10 December 2012
The government will consider waiving income tax and national insurance contributions (NICs) on the first £2,000 in value of shares awarded to employees in return for their giving up some of their employment rights under the new "employee owner" proposals.
The proposal was announced in the government's Autumn Statement in a bid to make the new employee owner status more attractive for employees.
The government is legislating to introduce a new employee shareholder status that will give staff a stake in their firms’ future success and give firms greater choice about the contracts they can offer to individuals. Employee shareholders will have different employee rights and shares worth a minimum of £2,000 in the firm they work for. As announced, the government will exempt gains on up to £50,000 of shares acquired by employee shareholders from capital gains tax from 6 April 2013. The government is also considering options to reduce income tax and National Insurance contributions (NICs) liabilities that arise when employee shareholders receive their shares, including an option to deem that employee shareholders have paid £2,000 for shares they receive. This option would mean that the first £2,000 of shares received under the new status would be free from income tax and NICs.
Previous CIPP News
‘Owner-Employee' Contracts - 11 October 2012 Employee Owners - What do you think? - 18 October 2012
TAXATION OF CONTROLLING PERSONS – PLANS WITHDRAWN
10 December 2012
CIPP Policy News Journal
12/04/2013, Page 173 of 362
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