“You never pull one person up by pulling another down,” he said. “This party doesn’t do the politics of envy and class war. We believe in aspiration and helping people get on in life.” In a move to cut taxes for the lowest earners, workers would eventually only pay income tax once they earned more than the minimum wage level of £12,500 a year. The threshold is currently £10,000 a year and will go up by another £500 next April. The prime minister vowed that tax cuts could only be introduced as the deficit was cut. He again promised to balance the books by 2018. The cuts will be expensive to fund and Mr Cameron gave no details about how it would be done. Tory sources said that the package of tax cuts would cost a total of £7.2 billion. They said raising the basic rate threshold to £12,500 costs £5.6 billion. Raising the higher rate to £50,000 costs £1.6 billion. The average basic rate taxpayer will be £500 better off under the plans, sources added, but higher rate taxpayers will be almost three times as much better off, gaining an extra £1,313 from the plans, while 800,000 people would be taken out of the 40p tax bracket altogether. “Here’s our commitment to the British people: no income tax if you are on minimum wage,” he said. “A £12,500 tax-free personal allowance for millions of hardworking people. And you only pay 40p tax when you earn £50,000.
Proposed withdrawal of concession about treating certain employment income as trading income
3 October 2014
HMRC are proposing to withdraw an extra-statutory concession which is believed to be used by only a very small number of people.
The HRMC announcement concerns three current concessions, only the first of which ( EIM 03002 ) affects employers.
HMRC says that:
EIM 03002 is a longstanding concession. Under certain circumstances, it enables an individual to treat their employment income as trading income chargeable to Income Tax (for a sole trader/partnership) or Corporation Tax. This works by relieving the company or organisation paying the remuneration of the obligation to operate PAYE in respect of relevant payments of employment income. As far as we are aware Defra were the main users of the EIM 03002 practice. They have recently changed how they engage veterinary practices and amended their own legislation from April 2014 in relation to the use of Official Veterinarians during an animal health crisis. We are in the process of negotiating a new, limited concession with Defra that is within the Commissioners’ discretionary powers and this will be published in EIM soon. The relevant Northern Ireland department is aware of the consultation proposals and is currently considering the matters raised. Given the above, it has been decided to withdraw this administrative practice. The usual employment income rules and benefits code will apply to all such payments from 6 April 2016.
The HMRC announcement explains how to raise any questions or concerns about this proposal.
CIPP Policy News Journal
08/04/2015, Page 278 of 521
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