H M Revenue & Customs are changing the level of the tax relief for employees who participate in the employer supported childcare scheme with effect from 6 April 2011.Under the existing rules employers can voluntarily provide their employees with childcare vouchers for qualifying children in qualifying circumstances. The payment for the childcare vouchers is up to a specified level (currently £55 per week) tax deductable for the employer and the amount is also exempt from both income tax and national insurance.
With effect from 6 April 2011 the level of the childcare voucher which can qualify for the exemptions is to be means tested for any employees who join the scheme on or after 6 April 2011.
The employer is responsible for carrying out an earnings assessment for all relevant employees which must be done at the start of each tax year. A reduced level of exempt childcare voucher will apply if the employee is a higher rate taxpayer and a further reduction applies to taxpayers suffering tax at the additional 50% rate.
These changes will not affect any employees who are in the scheme at 5 April 2011 in respect of vouchers they receive after that date. If however they leave the scheme only to rejoin at a later time they will be regarded as a new employee for the purpose of this relief. Therefore if such a scheme is contemplated, taking action before 5 April 2011 could save money for any higher paid employees.
Following the introduction of a new pensions regime in April 2006 (A-day), the previous government made some fundamental changes to the maximum permitted levels of contribution to pension scheme primarily arising out the introduction of the 50% tax rate, to counter what they perceived would be an abuse of the rules to minimise tax liabilities at a time when the government wished to maximise the tax yield. The rules they introduced were extremely complicated and had a serious impact on high earners who wished to invest substantial sums in pension funds.
When the new government came in earlier this year they promised to look at these complicated rules and to legislate to make them more understandable. These changes have now been published and should be welcomed in terms of their simplicity.
With effect from 6th April 2011, the maximum contribution a taxpayer can make into a pension scheme per annum, providing they have sufficient earnings, is £50,000.
Furthermore the concept of carrying forward unused relief has been brought back. If a taxpayer is a member of a pension scheme in any tax year and actually makes a contribution in the year, but this falls short of the maximum permissible, then any unused element of the £50,000 can be carried forward for up to 3 years. It is important to note that if no contribution is made in any year then the carry forward for that year of the unused relief is not allowed, there has to be a contribution.
LBW Chartered Accountants | 0151 644 4848
In George Osborne’s emergency budget in June he announced proposals for a national insurance holiday for a 3 year period for new businesses set up after 22nd June 2010. The relief was targeted to areas of the country other than London, The South and the South East (determined by postcode). More details have now emerged, in particular, the definition of new businesses that do not qualify for the holiday. In short if any of the following are relevant then the holiday will not apply:
a. At any time in the 6 months leading to the start of the business, you carried on another business and the new business consists (or mostly consists) of activities that were undertaken in the other business.
b. You begin to carrry on a business as a result of a transfer of another business and the activities of the new business (or most of them) were previously carried on in the other business.
c. You begin to carry on a business and before the business starts you enter into an arrangement to take on an existing business or part of an existing business at some point during the period of the NICs holiday.
If you wish to find out more about this relief please contact Steve or Gary.
Last month we looked at the government's attempts to show it's green credentials with low emissions company cars and the cycle to work scheme. We also looked, in earlier newsletters, at the change in government policy in respect of the reduction in the qualifying expenditure limits for the 100% Annual Investment Allowance. What can sometimes be overlooked is that there is also the ability for businesses to claim the full cost of energy saving plant, machinery and equipment in the year in which it is bought without having regard to the general limits on claiming allowances.
There are 4 main categories (although there may be a certain element of overlap between the categories) and these are as follows:
Energy saving plant and machinery: The government has produced a list of the products which qualify for the relief. This can be viewed at www.eca.gov.uk
Environmentally beneficial plant and machinery: Again a list of the technologies and products has been produced on www.eca.gov.uk.
Low emission cars: This applies to vehicles which are either electronically propelled or produce less than 110gm/km in emissions (this figure can be found on the V5 document for the car) and will only apply to new cars.
Zero emission goods vehicles: Again the vehicles must be new and must produce no emissions whatsoever. In this instance the accelerated allowance will only be available until 2015.
The Chancellor’s Autumn statement was delivered on 5th December 2013.
To be a leader of the future, your vision and values must become part of your personal fabric of today.
LBW Chartered Accountants
Enterprise House, The Courtyard, Old Court House Road, Bromborough, Wirral CH62 4UE T: 0151 644 4848 F: 0151 644 4842
LBW Chartered Accountants is the trading name of Jimalice Ltd, Company No 07105303. Company Registered in England & Wales Enterprise House, The Courtyard, Old Courthouse Road, Bromborough, Wirral, CH62 4UE