The Chief Secretary to the Treasury, Danny Alexander, launched the most wide-ranging review of national business rates in a generation this month – paving the way for changes to how businesses across England pay the tax.

The review, set to report back by Budget 2016, will examine the structure of the current system which is paid annually on 1.8 million properties in England. The review will look at how businesses use property, what the UK can learn from other countries about local business taxes, and how we could modernise the system so it better reflects changes in the value of property.

The Chief Secretary launched the review during a speech to local businesses in Cambridge. He said:

“Our system of business rates was created nearly 30 years ago. Since that time, the worlds of commerce and industry have changed beyond recognition. I’ve been impressed by the representations made by the business community and I know that business rates are a considerable cost.

The government has taken measures to help businesses by capping rates and introducing reliefs for smaller businesses. But now the time has come for a radical review of this important tax. We want to ensure the business rates system is fair, efficient and effective.

Today’s announcement follows the Government’s commitment in December 2014 to conduct a review of business rates and implement a £1 billion package to reduce the cost of business rates in 2015-16, with particular support for the smallest businesses and the high street.”

From the 1 April 2015 the government is:

• increasing help for the High Street: increasing the business rates discount for smaller retail premises with a rateable value of £50,000 of below to £1,500 to 31 March 2016 benefiting around 300,000 shops, pubs, cafes and restaurants
• doubling small business rate relief for a further year to 31 March 2016 to provide support for 575,000 of the smallest businesses, and ensuring 385,000 small businesses pay no rates at all
• capping the rise in the business rates multiplier at 2% to benefit all businesses
• extending transitional rate relief to support 16,000 small business facing significant bill increases due to the ending of transitional rate relief

Key facts about business rates:

• 1990 – National business rates system introduced
• business rates are paid by occupiers of non-domestic properties (e.g. shops, offices, warehouses, factories, guest houses)
• the main aim of business rates is to help raise revenue to pay for local services
• business rates are devolved within the UK
• business rates are paid on 1.8 million non-domestic properties in England each year
• £20.5 billion was brought in from business rates in England in 2013-14
• April 2013 – government introduced the ‘business rates retention scheme’ to allow local government in England to keep 50% of all business rates receipts and therefore 50% of any growth
• some properties are eligible for relief on their business rates (e.g. small business rate relief which has been doubled until March 2016)
• local councils send out business rate bills in February or March each year. The bill is for the following tax year. Some councils offer payment in 12 instalments

From 6 April 2015 married couples (and civil partners) will be able to register for the MA.

If your income is less than £10,600 in the 2015 to 2016 tax year, you may be able to reduce your husband, wife or civil partner’s tax by up to £212.

The new Marriage Allowance will let you transfer some of your Personal Allowance to your partner. This is the amount of income people can get before paying tax.

Who will be eligible?

You’ll be able to claim Marriage Allowance if all the following apply:

• you’re married or in a civil partnership
• you have an annual income of less than £10,600 – including pensions, savings and investments
• your spouse or civil partner has an annual income of between £10,601 and £42,385
• you were both born on or after 6 April 1935

If you or your partner were born before 6 April 1935, you may be able to claim Married Couple’s Allowance instead.

If both partners are paying tax at the 20% rate their personal allowance will be fully utilised against their own income and there will be no advantage making an MA claim.

The allowance will only benefit partnerships where one spouse has income below the tax personal allowance, presently £10,600 for 2015-16, and the other partner/spouse does not pay income tax at the 40% rate.

County Court Judgements and your credit rating

If you get a county court judgment (CCJ) or a high court judgment, it will stay on the Register of Judgments, Orders and Fines for 6 years.

For this six year period Banks and loan companies will be aware of the CCJ and will take this into account when deciding whether to give you credit or loans.

Get the CCJ removed if you pay within a month

If you pay the full amount within a month you can get the judgment removed from the register. You will need to contact the Courts to do this.

If you pay after a month

If you pay after a month, you can get the record of the judgment marked as ‘satisfied’ in the register. It will stay on the register for 6 years but people searching the register will see that you’ve paid.

In order to get the Court records amended to say you’ve paid you’ll need to send proof of payment, and pay a £15 court fee.

Search the register of judgments

You can search for details of any judgments against you on the register of judgments. https://www.trustonline.org.uk/index.php/search-yourself

You’ll have to pay a small fee – a simple search costs £4.

If the information on the register is wrong, you can contact Trust Online, who will check the details with the court.

Don’t bury your head in the sand

Your credit rating needs to be managed like any other aspect of your financial affairs. Use the Trust Online website to check your credit records and make sure that the information on file is correct.

If you receive a CCJ don’t bury the correspondence. Appeal against the judgement if you feel it is incorrect or make sure you make arrangements with the Court to pay what you owe as soon as possible.

There are a number of changes to the taxation of pensions from next month. We have copied into this article postings to the GOV.UK website regarding some of the more significant options available from April 2015.

 What happens to your pension when you die?

Instead of paying the 55% rate of tax when passing on their pension, people who die under 75 with defined contribution pensions can from April 2015 pass on their unused pension as a lump sum to a person of their choice tax free.

At the Autumn Statement 2014, the Chancellor also announced that from April 2015 payments from certain kinds of annuities that pay out income after you die (joint life and guaranteed annuities) will be tax-free when paid to a beneficiary, if the original policyholder dies below age 75.

For people who die over the age of 75 with unspent defined contribution pensions, they can pass this on to a person of their choice who will be able to take it as a lump sum taxed at 45% or as income and pay their normal rate of income tax.

Withdrawals from your pension

From April 2015, no matter how much you decide to take out from a defined contribution pension after retirement, withdrawals from your pension will be treated as income; the amount of tax you will pay on what you withdraw will depend on the amount of other income you have in that year, as long as you are 55 or over. . This is instead of being taxed 55% for full withdrawal, as it has been previously.

Most people will still be able to access 25% of their pot in one go without paying any tax.

When can you take advantage of the new pension withdrawals?

If you are over the age of 55, or will be from April 2015, you will be able to take advantage of the new system from then, subject to your pension scheme rules.

If you’re younger than 55 then you will be able to take advantage of the new system when you reach normal minimum pension age under the tax rules (this is currently age 55).

If you are over the age of 55, or will be from April 2015, you will be able to take advantage of the new system from then, subject to your pension scheme rules.

If you’re younger than 55 then you will be able to take advantage of the new system when you reach normal minimum pension age under the tax rules (this is currently age 55).

Before making any decisions on your pension pot you should take proper advice.

Pension providers or schemes will be required to tell people about the guidance service in the information they send to people when they are approaching retirement. This guidance will be available through a number of different channels – via the internet, over the phone, or face to face at a Citizens Advice Bureau.

It will be entirely impartial, so won’t be given by anyone who could be trying to sell you a product.

There are a number of changes to the taxation of pensions from next month. We have copied into this article postings to the GOV.UK website regarding some of the more significant options available from April 2015.

 What happens to your pension when you die?

Instead of paying the 55% rate of tax when passing on their pension, people who die under 75 with defined contribution pensions can from April 2015 pass on their unused pension as a lump sum to a person of their choice tax free.

At the Autumn Statement 2014, the Chancellor also announced that from April 2015 payments from certain kinds of annuities that pay out income after you die (joint life and guaranteed annuities) will be tax-free when paid to a beneficiary, if the original policyholder dies below age 75.

For people who die over the age of 75 with unspent defined contribution pensions, they can pass this on to a person of their choice who will be able to take it as a lump sum taxed at 45% or as income and pay their normal rate of income tax.

Withdrawals from your pension

From April 2015, no matter how much you decide to take out from a defined contribution pension after retirement, withdrawals from your pension will be treated as income; the amount of tax you will pay on what you withdraw will depend on the amount of other income you have in that year, as long as you are 55 or over. . This is instead of being taxed 55% for full withdrawal, as it has been previously.

Most people will still be able to access 25% of their pot in one go without paying any tax.

When can you take advantage of the new pension withdrawals?

If you are over the age of 55, or will be from April 2015, you will be able to take advantage of the new system from then, subject to your pension scheme rules.

If you’re younger than 55 then you will be able to take advantage of the new system when you reach normal minimum pension age under the tax rules (this is currently age 55).

If you are over the age of 55, or will be from April 2015, you will be able to take advantage of the new system from then, subject to your pension scheme rules.

If you’re younger than 55 then you will be able to take advantage of the new system when you reach normal minimum pension age under the tax rules (this is currently age 55).

Before making any decisions on your pension pot you should take proper advice.

Pension providers or schemes will be required to tell people about the guidance service in the information they send to people when they are approaching retirement. This guidance will be available through a number of different channels – via the internet, over the phone, or face to face at a Citizens Advice Bureau.

It will be entirely impartial, so won’t be given by anyone who could be trying to sell you a product.

In a recent speech Business Minister, Matthew Hancock, announced that the government-backed Prompt Payment Code will now promote 30-day terms as standard, with a 60-day maximum limit. Unless signatories can prove exceptional circumstances for longer terms, they will be removed from the Code.

The change will be rigorously enforced by the new Code Compliance Board, which will include people from business representative bodies who will investigate challenges made against signatories to the Code by their suppliers. The Compliance Board will remove signatories found to be in breach of the Code’s principles and standards.

The Prompt Payment Code sets out fair and agreed practices for businesses to follow when dealing with, and paying, their suppliers. More than 1,700 businesses and public authorities have so far committed to these principles, which include paying suppliers within an agreed timeframe and communicating with them effectively.

Business Minister Matthew Hancock said:

“Making small businesses wait an unreasonable time for payment is entirely unacceptable. I know first-hand the great burden that late payment can place on firms – and how it can strain family finances – which is why I am committed to stopping it.

Big companies should lead by example and pay small suppliers within 30 days. I have already written to the FTSE 350 urging them to sign up to the Prompt Payment Code.

Fairer payment practices will help small businesses grow and create jobs. This is a key part of our long-term economic plan to build a better Britain.”

Businesses will be actively encouraged to start complying with the strengthened Prompt Payment Code in the coming weeks. The changes complement the tougher reporting laws in the Small Business, Enterprise and Employment Bill. These new laws will force the UK’s largest companies to publish their payment terms, increasing transparency and empowering small businesses. The Code Compliance Board will be able to use this data to review the status of signatories to the Code and challenge those that either do not pay their suppliers promptly or insist on excessively long standard terms.

The Prompt Payment Code is a voluntary Code to drive a change in payment culture. It is administered by the CICM on behalf of BIS. More information about the Code can be found at Prompt Payment Code website.

 1 March 2015 – Due date for Corporation Tax due for the year ended 31 May 2014.

 2 March 2015 – Self Assessment tax for 2013/14 paid after this date will incur a 5% surcharge.

 19 March 2015 – PAYE and NIC deductions due for month ended 5 March 2015. (If you pay your tax electronically the due date is 22 March 2015.)

 19 March 2015 – Filing deadline for the CIS300 monthly return for the month ended 5 March 2015.

 19 March 2015 – CIS tax deducted for the month ended 5 March 2015 is payable by today.

 1 April 2015 – Due date for Corporation Tax due for the year ended 30 June 2014.

 19 April 2015 – PAYE and NIC deductions due for month ended 5 April 2015. (If you pay your tax electronically the due date is 22 April 2015.)

 19 April 2015 – Filing deadline for the CIS300 monthly return for the month ended 5 April 2015.

 19 April 2015 – CIS tax deducted for the month ended 5 April 2015 is payable by today.

Did you know that if you take on domestic help you may be considered an employer?

Anyone who works in a private home is treated as an employee if they only work for one family, except for au pairs. This includes nannies, housekeepers, gardeners and anyone else working for one family. You’re their employer if you hire them.

As an employer you would need to ensure that an employee:

• has an employment contract
• is given payslips
• does not work more than the maximum hours allowed per week
• be paid at least the National Minimum Wage

They’re also entitled to employment-related benefits, if they meet the eligibility requirements. These include:

• statutory maternity pay
• statutory sick pay
• paid holiday
• redundancy pay

Additionally, domestic employers must:

• check if the person can work in the UK
• have employer’s liability insurance
• register as an employer and send employer tax returns each year – even if they pay the employee in cash

Running a home with staff is the equivalent of running a business with staff, there are a multitude of legal matters you will need to consider. 

Do you have any idea if your estate will have an inheritance bill when you die? How much will it be? Who will have to pay it?

 Planning opportunities arise if:

1. If you have assets that you would like to give away.
2. If you have any interests in a business or company, or own agricultural property.
3. If you have assets that you would like to gift, but are concerned that other parties may seek to control those assets against your wishes.

These and many other scenarios, particular to your circumstances, may be available. The key is to explore these planning strategies before the burden of responsibility for settling tax is passed to your executors, and ultimately, your family and beneficiaries.

HMRC has published a list of ten items that serial tax avoiders need to be aware. It’s a reminder as we approach the end of another tax year that overstepping the mark can have serious consequences.

 Here’s what HMRC has said:

1. HMRC is serious about stopping avoidance: the Government is taking unprecedented steps to clamp down on the small minority who try to avoid paying tax that is legally due.
2. Other people are getting out of avoidance: increasing numbers of people involved in multiple avoidance schemes are approaching HMRC to settle up so that they can put the past behind them and protect their reputation.
3. HMRC wants to help tax avoiders to get out of avoidance: HMRC will work with avoiders who demonstrate a commitment to resolving their avoidance arrangements to finalise their tax liability and will provide certainty over payment terms.HMRC has set up a single point of contact to help establish the possible terms for exit from each scheme a serial avoider uses.
4. HMRC is moving more quickly to tackle serial avoiders: as they close in and increase their focus on this minority, HMRC will look ever more carefully at those who use multiple schemes.
5. The tax avoider is the one who is responsible: even if a promoter or agent has arranged the avoidance scheme for the user, the avoider remains responsible for their own tax affairs and what is put on their tax return. Serial avoiders will personally have to provide HMRC with information and documents regarding their tax affairs.
6. HMRC has a special unit looking at tax avoiders: the Serial Avoiders Unit is identifying users of multiple schemes who choose not to approach HMRC to settle their affairs.
7. Tax avoiders may personally have to attend meetings with HMRC investigators: HMRC will ask questions about their tax affairs and will be checking that they have the full facts about their arrangements.
8. HMRC will look at all the tax avoider’s tax affairs: serial avoiders will be subject to a more co-ordinated approach to challenge and resolve their tax affairs. HMRC will look at their current activity, not just enquiries that are already open. And they will look at all the entities and structures the tax avoiders are connected with, to challenge any avoidance and evasion in all areas of their affairs.
9. Tax avoiders may have to pay up front: HMRC will fundamentally reduce the incentive to engage in serial tax avoidance and recover all duties legally due at the earliest opportunity. Multiple users of schemes may receive Accelerated Payment Notices before other users of a scheme.
10. There are heavy sanctions: HMRC will evaluate the behaviour of each serial avoider and this could result in penalties for careless or deliberate behaviour or for any failure to disclose avoidance. Deliberately misleading or concealing information from HMRC could lead to prosecution and criminal conviction.

None of the above comments should stop you considering strategies that minimise your tax position based on current law and best practice. One thing that HMRC has failed to mention in the above list is the number of taxpayers in the UK who pay too much tax because they failed to claim allowances and reliefs available. This underlines the first article in this month’s newsletter, planning is critical especially if your tax affairs are complex.