Individuals are responsible for ensuring that they are paying the correct amount of tax under UK law, even in scenarios where somebody else does this for them or if they have been given bad advice.
In not paying the correct amount of tax, this reduces money put towards public services, such as schools and hospitals.
Why are contractors being targeted by the campaign?
HMRC’s aim is to help people to steer clear of tax avoidance, and to encourage contractors not to be duped by tax avoidance schemes. Schemes that claim to increase net pay and reduce tax bills are ones that contractors should be especially wary of, and the resounding message is that if something looks to good to be true, it almost certainly is.
CIPP comment
HMRC is seeking feedback on its ‘Tax avoidance: don’t get caught out’ campaign. Please send any comments you may have to the Policy team, at Policy@cipp.org.uk. Thank you in advance.
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Tax and NI exemption for employer reimbursed coronavirus swab tests 16 December 2020
The HMRC External Affairs team has advised that the Government will implement a temporary tax and National Insurance (NI) exemption which will ensure that any employees who buy their own coronavirus swab tests, and are subsequently reimbursed by their employers, will not see any tax or NI labilities attached to the purchase of the test, in the current tax year.
A coronavirus swab test refers to a test that identifies the presence of a viral antigen or viral ribonucleic acid (RNA) that is specific to severe acute respiratory syndrome coronavirus 2 (SARS-CoV-2).
Ordinarily, the cash reimbursement of a test by an employer to an employee would be classed as earnings and so would be subject to tax and NI. This measure, however, will ensure that employees can access a coronavirus swab test for business reasons, such as the requirement to hold a negative test result to travel abroad for business, without any tax and NI liabilities arising. A policy paper was released by HMRC to confirm the temporary exemption, and the measure will have effect from 25 January 2021 up until 5 April 2021.For any relevant advance payments or reimbursements made within tax year 2020- 21, but prior to the measure coming into force, HMRC will refrain from collecting any NI or tax due on the reimbursement of a relevant coronavirus antigen test.
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HMRC’s Customer Charter 18 December 2020
Payroll professionals may not be aware of HMRC’s Customer Charter, but it is crucial in understanding what should be expected from HMRC, and equally, what HMRC expects from its customers.
The Charter is a legal requirement under the Finance Act 2009, which states that the Charter ‘must include standards of behaviour and values to which Her Majesty’s Revenue and Customs will aspire when dealing with people in the exercise of their functions.’
The Chartered Institute of Payroll Professionals
Payroll: need to know
cipp.org.uk
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