Whilst some of the questions asked in the consultation document were not of direct interest to employers the following key points emerged and were submitted to the Liberal Democrats party and which we reported on 15 May: Summary of key findings All respondents agreed with the proposal that the tax free threshold should be increased to the level of the National Minimum Wage (NMW) over the course of the next parliament. All respondents agreed that the personal allowance should continue to increase in line with the NMW to prevent NMW earners being caught in the tax net. All respondents agreed with that all rates of income tax, including the additional rate of 45% should remain unchanged. Although 80% of respondents agreed with the idea of calculating income tax and NIC on annual income, opinion was divided on whether income tax and NIC should be merged or remain separate. When looking at whether benefits in kind should be subject to both tax and NICs, there was a mixed reaction with 60% agreeing. When the same question was asked about pension contributions, 80% said no, pension contributions should not be subject to NIC. 100% of respondents disagreed with the suggestion of limiting the amount that could be taken tax free from a pensioner’s pension pot. Turning to the possibility of compensating micro employers for the cost of tax collection, opinion was fairly divided, with 40% agreeing. Of those who agreed with the suggestion of compensating micro employers, opinion was split as to whether this should be for businesses with five and fewer, or nine and fewer employees. However, all respondents agreed that there should be a NICs exemption for very small companies. Having now had time to study the proposed taxation policy, many of the findings shown above have been included. Their taxation policy now proposes that the tax free threshold should be increased to the level of the NMW, and the personal allowance should continue to rise in line with the NMW. The policy also backs CIPP members’ belief that the 25% tax-free lump sum which can be taken out of the pension pot upon retirement should remain unchanged. There was a slight majority in favour of Benefits in Kind being subject to both tax and NICs and the LibDems have included this proposal. However it has been taken a step further to include benefits provided in lieu of salary through salary sacrifice arrangements. Perhaps CIPP member opinion would have been less mixed if they had been asked outright whether benefits provided through a salary sacrifice scheme should also be subject to tax and NICS!
HMRC Employer Bulletin - Issue 45
25 September 2013
Issue 45 of the Employer Bulletin is now available and contains important information relating to payroll obligations to HMRC.
The latest Employer Bulletin is essential reading for employers and agents but we would like to highlight some of HMRC’s ‘need to know’ items and also one that may cause some consternation regarding SCONs.
HMRC’s ‘need to know’:
CIPP Policy News Journal
16/04/2014, Page 292 of 519
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