The Chartered Institute of Payroll Professionals
Policy Bi-Monthly Newsletter – September 2016
PAYE tax table specifications for Scottish Rate of Income Tax 5 August 2016
As part of the implementation of wider devolution for Scotland the Scottish Government will be allowed to set income tax bandwidths that differ from the rest of the UK. These powers will apply from 6 April 2017.
Due to this change HMRC’s Software Developers Support Team (SDST) have provided a new draft of the Tax Table Routines specification which includes some new definitions for separate Scottish tax bandwidths.
The overall calculation method in the specification remains the same except that Scottish calculations no longer refer to the same bandwidths as the rUK calculations. The new definitions relating to Scottish bandwidths are shown in the definition list (at 2.1, 3.1, 9.1, 10.1) starting on page 8. The Scottish formulae and Appendices later in the document have also been amended to show these new definitions. This revised specification is being provided as a draft version initially to give SDST the chance to consider any feedback but it will be finalised/published in the coming weeks. If you do have any feedback please email SDSTeam@hmrc.gsi.gov.uk by 26 August.
This Specification supersedes all earlier ones showing the method of computing PAYE tax, and expands on the information contained in the "Employer Further Guide to PAYE and NICs" (CWG2).
Specification for PAYE tax table - draft v5
Treatment of income from sporting testimonials 9 August 2016
In response to consultation on the draft legislation for the treatment of income from sporting testimonials, the proposed exemption of £50,000 has been increased to £100,000
As previously announced , legislation will be introduced in Finance Bill 2016 to confirm that income from sporting testimonials and benefit matches for employed sportspersons, irrespective of whether they are arranged by the sportsperson’s club or by an independent testimonial committee, is chargeable to income tax under PAYE. Legislation is introduced in Finance Bill 2016 to amend Income Tax (Earnings and Pensions) Act 2003 (ITEPA) to clarify the law in this area and confirm that income arising from a non-contractual or non-customary sporting testimonial or benefit for an employed sportsperson is liable to income tax. Legislation will also be introduced before April 2017 to deal with certain consequential amendments for income tax and to set out the National Insurance contributions (NICs) position. The changes to ITEPA will also include the introduction from 6 April 2017 of a one-off exemption of £100,000 from Income Tax, and corresponding legislation will be introduced for NICs. This will apply to income from a non-contractual or non-customary testimonial being paid to or on behalf of an employed sportsperson. The exemption will apply to income arising from relevant events held in a maximum period of 12 calendar months only, beginning with the date the first event is held in a ‘testimonial year’, even if that year straddles more than one tax year. If the level of the income arising from the testimonial or testimonial year falls below the value of the exemption, the amount of the unused exemption will not be available to carry forward to a future sporting testimonial or benefit match for the sportsperson, or against any other testimonial events held after the end of that 12 month period.
Any non-contractual or non-customary testimonial events held on or after 6 April 2017 from a testimonial that is awarded or arranged for a sportsperson prior to 25 November 2015 will fall within existing arrangements.
For further details, go to GOV.UK .
cipp.org.uk
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