HMRC go live with Verify identity authentication

Gov.uk Verify, the online service taxpayers will need to use to prove their identity before accessing HMRC’s digital services and other government online services, is now live. The central government platform for online identity assurance has been under development for some time by the government digital service (GDS) and has been available in a beta version. It has now passed its service assessment.

It should take around ten minutes for an individual to verify their identity the first time they use gov.uk Verify, and a couple of minutes any time after that.

Individuals choose from a list of companies certified to verify their identity. That company may ask some questions, or perform other checks using photo identification and financial information before confirming this to the government department the individual is trying to use. There are currently eight companies offering this service: Barclays, CitizenSafe, Digidentiy, Experian, Post Office, Royal Mail, SecureIdentify, and Verizon.Gov.uk Verify can be used for:

  • checking income tax for the current year;
  • obtaining a pension statement;
  • signing in to personal tax accounts;
  • viewing or sharing driving licence information, with the Driver and Vehicle Licensing Agency (DVLA);
  • applying for Universal Credit with the Department for Work and Pensions (DWP);
  • claiming for redundancy and monies owed, with the Department for Business, Innovation and Skills (BIS);
  • signing in and filing self-assessment tax returns;
  • updating rural payments details, with the Department for Environment, Food and Rural Affairs (Defra);
  • helping friends or family with their tax (HMRC); and
  • checking or updating company car tax.

Janet Hughes, programme director for Verify at GDS, said the move to live working would not be a ‘dramatic change’ but formed part of an ongoing gradual process of developing and scaling up the service. Gov.uk Verify will actually look exactly the same to users, apart from the removal of the beta label.

Further information on gov.uk Verify can be found here.

POSSIBLE NEW “LOOK THROUGH” ENTITY WILL CHANGE SMALL COMPANY TAXATION

The Chancellor announced in his Budget Speech that the Government is considering further major changes to small company taxation following a review by the Office of Tax Simplification (OTS).

 

As in many small companies the directors are also shareholders the OTS believe that it would simplify matters if the shareholders of such companies were to be taxed on their share of profits made by the company in proportion to their shareholdings. In other words the shareholders would be subject to income tax in a similar way to members of a partnership or LLP and there would be no corporation tax paid by the company. This would clearly level the playing field between limited companies and unincorporated businesses. However it is likely to result in more tax payable than under the current rules!

 

We will monitor further discussions on this possible future change and keep you updated.

The Chancellor announced in his Budget Speech that the Government is considering further major changes to small company taxation following a review by the Office of Tax Simplification (OTS).

 

As in many small companies the directors are also shareholders the OTS believe that it would simplify matters if the shareholders of such companies were to be taxed on their share of profits made by the company in proportion to their shareholdings. In other words the shareholders would be subject to income tax in a similar way to members of a partnership or LLP and there would be no corporation tax paid by the company. This would clearly level the playing field between limited companies and unincorporated businesses. However it is likely to result in more tax payable than under the current rules!

 

We will monitor further discussions on this possible future change and keep you updated.

TAX RELIEF FOR TRAVEL EXPENSES FOR IR35 WORKERS

New legislation in the current Finance Bill 2016 seeks to deny relief for travel and subsistence expenses incurred by workers caught by the IR35 rules. The restriction will also apply to agency workers where there is supervision, direction and control (SDC) over the worker by the end user client.

According to updated HMRC guidance the SDC test will be the only test used to determine whether the new rules will apply and ignores the other employment status factors. The HMRC examples suggest that if there is no expertise within the end user organisation then there is likely to be limited SDC and the worker will continue to be entitled to relief for travelling to the client’s premises.

CHANGES NEXT YEAR FOR PUBLIC SECTOR WORKERS “OFF PAYROLL”

It was announced in the March Budget that Finance Bill 2017 will include measures to change the rules for those workers supplying their services to public sector bodies via their own company. The current rules require the intermediary to consider whether or not the IR35 rules apply to the engagement, and if so apply PAYE and National Insurance (NIC) to the income paid via the intermediary company.

If the proposed changes go ahead the public sector body will be required to assess whether the IR35 rules apply and operate PAYE and NIC.

For these purposes public sector includes central Government departments, Local Authorities, the NHS, schools and other bodies such as the BBC.

Making sure you time it right entrepreneurs’ relief

When the director of a company resigns they will normally dispose of their shares in that company. Entrepreneur’s relief would normally apply however it is important that the shares are disposed of at the right time.

Entrepreneurs’ relief can only be claimed if the shares are disposed of before the date the director resigns. Entrepreneurs’ relief can also only be claimed if the shareholder has been an employee or officer of the company for at least a twelve month period ending with the date of disposal.

Trivial Benefits

As you may be aware, unless a benefit in kind has a specific exemption or extra-statutory concession, it is taxable and also attracts either class 1A or 1 National Insurance.

What you may not know is from April 2016 HM Revenue & Customs have introduced a new “trivial benefit” exemption. A trivial benefit can be anything up to a maximum of £50.00 including VAT providing it meets the following criteria:

  • Is not cash or cash voucher
  • The cost of providing the benefit does not exceed £50.00
  • The benefit is not provided under salary sacrifice arrangements or any contractual obligation
  • The benefit is not related to employee performance

Although the limit for each benefit is £50.00 each there is no limit to the amount of benefits an employee can receive however for directors there is a cap of £300.00 per annum.