COMPANY VAN TAX LOOPHOLE ATTRACTS HMRC SCRUTINY
APRIL CHANGES FOR CORPORATION TAX
Companies across the UK are being reminded of important changes to Corporation Tax (CT) filing and payment, which came into effect this month.
From April 2011, all Corporation Tax payments will have to be made electronically, and all company tax returns must be filed online for accounting periods ending after 31 March 2010. The returns will also have to be filed using a specified data format, known as Inline XBRL or iXBRL, (XBRL is short for eXtensible Business Reporting Language).
As well as limited companies, the changes will affect other organisations that pay corporation tax, including clubs, societies, associations, co-operatives, charities and other unincorporated bodies.
There are a number of options for electronic payment, including: Direct Debit; debit or credit card via the BillPay service; your own bank or building society’s internet or telephone banking service; a BACS or CHAPS transfer; by Bank Giro or at participating Post Offices.
Companies will be able to file online either through commercially available software or by using HMRC’s own CT filing software, which is aimed at companies with less complex tax affairs.
To sign up for Corporation Tax online filing (if you have not done so already) visit www.hmrc.gov.uk/ct
and then click “Register for Corporation Tax Online” where you can register.
Private use of company vans is being scrutinised following rumours that the HMRC is looking into their tax status. This has been an issue for some time particularly when the driver's job requires the driver to take the van home after hours.
The investigation, featured in a recent issue of Fleet News came to light following accountancy and advisory firm KPMG revealing that several companies and organisations had been issued ‘detailed questionnaires’ by HMRC asking for details about what systems they had in place for recording private use of company vans.
The sudden interest suggests, according to Fleet News, that tax and NI contributions might have been underpaid on company van benefits. According to HMRC rules, employees are not subject to benefit in kind charges as long as they only use the van for work purposes and private use is not considered to be significant.
The true scale of the investigation is not known, but it is believed that the questionnaire includes details of van usage policies, tracking device use and the employer’s definition of ‘insignificant private use’.
Employees who use company vans for private use pay tax on a £3,000 flat-rate value for the van and £500 for free or subsidised fuel for private use.
However, some accountants and advisers are less than convinced that HMRC has begun a new drive. Whilst the profession has been aware that there is sometimes a lack of policing of this policy by employers, some say that they do not see, at the present time, this is a major issue for HMRC to pursue.
If your company receives one of the detailed questionnaires, consult your accountant for advice before responding to HMRC.
EMPLOYMENT TRIBUNAL SYSTEM IS BROKEN, SAYS NEW CIPD SURVEY
More than two out of three employers (69%) say they have no effective protection against employees making wholly unjustifiable claims to employment tribunals. This is a key finding from a survey of employers' experiences of managing workplace conflict, published in the run up to the CIPD conference on conflict management.
The Conflict Management survey report shows three in five respondents (61%) have experience of an employee claiming unfair dismissal and “tagging on” a discrimination claim in the hope of getting more compensation. Fifty-five per cent say they have endured a complaint against their organisation on malicious grounds.
More than half (52%) think the law on unfair dismissal should be amended to make it easier for employers to dismiss. A similar proportion (54%) also support more effective case management to identify “vexatious” claims, with exactly half supporting the move to require tribunals to award costs against losing claimants.
Mike Emmott, employee relations adviser, CIPD, said: “This survey reflects the strength of feeling among employers about the failings of the current system for resolving workplace disputes. Despite many attempts in recent years to find a solution, the volume of tribunal claims has increased and employers believe they have no protection against weak or speculative claims.
“However the survey findings also suggest that recent plans outlined by the Government - to increase the minimum period employees serve before they can claim unfair dismissal from 12 months to two years - will have only limited impact on the number of claims. This is because many claims are linked to discrimination claims which can be made from day one of employment.
“The real problem is that the employment tribunal system itself is broken and its costs and benefits are wholly out of line. The Government needs to take a radical look at the existing machinery for protecting employment rights”.
6 THE door industry journal spring 2011 Also online at: www.doorindustryjournal.co.uk
employment & legal
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