HM Treasury will shortly launch four related consultations in response to the Office of Tax Simplification (OTS) recommendations on employee benefits and expenses. The purpose of these consultations is to reduce the administrative burdens relating to benefits in kind and expenses for employers, individuals and HMRC. These will consider:
The Treasury also intends to launch a longer term review of the rules on travel and subsistence expenses alongside the consultations. The review will aim to produce a new system that ‘reflects working patterns in the 21st century’. Finally, the Treasury will also undertake a general call for evidence on modern remuneration practices to inform any future policy changes in this area.
Following the announcement in the 2013 Budget that a reverse charge would be introduced for wholesale supplies of gas and electricity within the UK, HMRC has issued Revenue & Customs Brief 23/2014, together with draft legislation. The charge will apply to all affected supplies from 1 July 2014. HMRC recognises that this timetable may be challenging for some businesses and promises to adopt a ‘light touch’ approach with regard to penalties.
Subject to exceptions, the domestic reverse charge will apply to all wholesale supplies of gas and electricity between counterparties established in the UK. This typically means wholesale supplies between UK counterparties under trading contracts (for example, European Federation of Energy Traders contracts, grid trade master agreements and national balancing point contracts) and over the counter or spot contracts of gas where the gas is supplied through a natural gas system situated within the territory of a member state or any network connected to such a system or electricity. However, the reverse charge will not apply to supplies of gas and electricity made under supply licence or metered arrangements to domestic and business premises (supplies for consumption). VAT registered businesses that do not resell or trade the gas or electricity will similarly not be affected.
HMRC has published guidance on the changes, which apply since 6 April 2014, to the treatment of workers supplied through UK based agencies, employment businesses or other intermediaries. The changes apply where a worker personally provides their services, there is a contract between an end-client and a third party (the agency) and, as a result of that contract, the services of the worker are provided or the client pays for the services to be provided. The agency must decide whether the way the work is performed is subject to ‘supervision, direction or control’. If it is, the worker should be taxed as an employee.
The guidance also covers the interaction between the new rules and self-assessment, as well as the construction industry scheme. The guidance reiterates HMRC’s view that not many workers covered by the personal services company (IR35) legislation will also meet the criteria for the new agency rules to apply. However, the agency legislation will usually not apply to workers engaged via a PSC, as dividends received from a PSC will not constitute remuneration. Furthermore, salary received from a PSC is likely to be employment income to which the agency legislation does not apply.
The following tax cooperation orders have been published:
Their commencement dates have not been confirmed yet. These orders bring into effects amendments agreed in 2013 to the tax information agreements between the UK and the relevant countries by providing for automatic and spontaneous exchanges of information.
Additionally, the International Tax Enforcement (Uruguay) Order, SI 2014/1358 has been published. Its commencement date has not been confirmed. The Order gives effect to the UK/Uruguay Tax Information Exchange Agreement signed on 14 October 2013. It provides for exchanges of information upon request.
New HMRC guidance is available from HMRC’s website, including:
HM Treasury will shortly launch four related consultations in response to the Office of Tax Simplification (OTS) recommendations on employee benefits and expenses. The purpose of these consultations is to reduce the administrative burdens relating to benefits in kind and expenses for employers, individuals and HMRC. These will consider:
The Treasury also intends to launch a longer term review of the rules on travel and subsistence expenses alongside the consultations. The review will aim to produce a new system that ‘reflects working patterns in the 21st century’. Finally, the Treasury will also undertake a general call for evidence on modern remuneration practices to inform any future policy changes in this area.
Following the announcement in the 2013 Budget that a reverse charge would be introduced for wholesale supplies of gas and electricity within the UK, HMRC has issued Revenue & Customs Brief 23/2014, together with draft legislation. The charge will apply to all affected supplies from 1 July 2014. HMRC recognises that this timetable may be challenging for some businesses and promises to adopt a ‘light touch’ approach with regard to penalties.
Subject to exceptions, the domestic reverse charge will apply to all wholesale supplies of gas and electricity between counterparties established in the UK. This typically means wholesale supplies between UK counterparties under trading contracts (for example, European Federation of Energy Traders contracts, grid trade master agreements and national balancing point contracts) and over the counter or spot contracts of gas where the gas is supplied through a natural gas system situated within the territory of a member state or any network connected to such a system or electricity. However, the reverse charge will not apply to supplies of gas and electricity made under supply licence or metered arrangements to domestic and business premises (supplies for consumption). VAT registered businesses that do not resell or trade the gas or electricity will similarly not be affected.
HMRC has published guidance on the changes, which apply since 6 April 2014, to the treatment of workers supplied through UK based agencies, employment businesses or other intermediaries. The changes apply where a worker personally provides their services, there is a contract between an end-client and a third party (the agency) and, as a result of that contract, the services of the worker are provided or the client pays for the services to be provided. The agency must decide whether the way the work is performed is subject to ‘supervision, direction or control’. If it is, the worker should be taxed as an employee.
The guidance also covers the interaction between the new rules and self-assessment, as well as the construction industry scheme. The guidance reiterates HMRC’s view that not many workers covered by the personal services company (IR35) legislation will also meet the criteria for the new agency rules to apply. However, the agency legislation will usually not apply to workers engaged via a PSC, as dividends received from a PSC will not constitute remuneration. Furthermore, salary received from a PSC is likely to be employment income to which the agency legislation does not apply.
The following tax cooperation orders have been published:
Their commencement dates have not been confirmed yet. These orders bring into effects amendments agreed in 2013 to the tax information agreements between the UK and the relevant countries by providing for automatic and spontaneous exchanges of information.
Additionally, the International Tax Enforcement (Uruguay) Order, SI 2014/1358 has been published. Its commencement date has not been confirmed. The Order gives effect to the UK/Uruguay Tax Information Exchange Agreement signed on 14 October 2013. It provides for exchanges of information upon request.
New HMRC guidance is available from HMRC’s website, including:
