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The National Minimum Wage is the minimum pay per hour almost all workers are entitled to by law. It doesn’t matter how small an employer is, they still have to pay the minimum wage.

Who is entitled to the minimum wage?

Workers must be school leaving age (last Friday in June of the school year they turn 16) or over to get the minimum wage. Contracts for payments below the minimum wage are not legally binding. The worker is still entitled to the minimum wage.

Workers are also entitled to the minimum wage if they are:

• part-time
• casual labourers, e.g. someone hired for 1 day
• agency workers
• workers and home workers paid by the number of items they make
• apprentices
• trainees, workers on probation
• disabled workers
• agricultural workers
• foreign workers
• seafarers
• offshore workers

Apprentices under 19 or in the first year of a level 2 or 3 apprenticeship get an apprentice rate. All other apprentices are entitled to the National Minimum Wage for their age.

Not entitled to the minimum wage

The following types of workers aren’t entitled to the minimum wage:

• self-employed people running their own business
• company directors
• volunteers or voluntary workers
• workers on a government employment programme, e.g. the Work Programme
• family members of the employer living in the employer’s home
• non-family members living in the employer’s home who share in the work and leisure activities, are treated as one of the family and aren’t charged for meals or accommodation (e.g. au pairs)
• workers younger than school leaving age (usually 16)
• higher and further education students on a work placement up to 1 year
• workers on government pre-apprenticeships schemes
• people on the following European Union programmes: Leonardo da Vinci, Youth in Action, Erasmus, Comenius
• people working on a Jobcentre Plus Work trial for 6 weeks
• members of the armed forces
• share fishermen
• prisoners
• people living and working in a religious community

 You won’t get minimum wage if you’re:

• a student doing work experience as part of a higher or further education course
• of compulsory school age
• a volunteer or doing voluntary work
• on a government or European programme
• work shadowing

Employers should note that HMRC have powers to enforce payment of the NMW in situations where workers have been underpaid.

HMRC are currently consulting with interested parties (the accounting profession and associated professional organisations) to re-vamp the UK’s system for taxing employee benefit in kind and expenses. Changes are planned to simplify this process in accordance with recommendations made by the Office of Tax Simplification.

Consultations commenced 18 June 2014 and due to be completed 9 September 2014.

The four areas of consultation are:

• The abolition of the £8,500 threshold. The government believes that this threshold adds unnecessary complexity to the tax system and is consulting on who would be affected and how to mitigate the effects of abolition on vulnerable groups of employees.
• Introducing a statutory exemption for trivial benefits in kind. The government believes that a clear and simple statutory exemption will make administering such benefits substantially easier for employers. The government will therefore consult on the design of such an exemption.
• Replacing the current system of dispensations for reporting non-taxable expenses with an exemption for expenses paid or reimbursed by employers. The government believes that an exemption would be simpler, more transparent, consistent and easier to use for employers than the current system. This consultation will cover the design features of such an exemption and its administration.
• Introducing a system of voluntary payrolling for benefits in kind. The government believes that payrolling benefits in kind instead of submitting forms P11D can offer substantial administrative savings for some employers and wishes to create a system that will enable employers to do so if they wish. The government will consult on the design and scope of a payrolling model and is also interested to hear from employers who are already payrolling benefits on an informal basis.

Exchequer Secretary to the Treasury, David Gauke, said:

“Following the valuable work the Office of Tax Simplification has carried out in reviewing employee benefits and expenses, the government is now consulting on changes that will deliver real improvements for businesses and individual and their experience of the tax system.

“We want to make sure we get the structure and detail absolutely right and each consultation will allow us to engage with and learn from those who will be directly affected.”

If you dispose of a dwelling house (which can include a house, flat, houseboat or fixed caravan) which is your home, or part of a dwelling house which is your home, or• part of the garden attached to your home , you would normally have to pay Capital Gains Tax (CGT) on any gain you make.

However, you will be entitled to full relief from any capital gains tax liability where all the following conditions are met:

• the dwelling house has been your only or main residence throughout your period of ownership, and
• you have not been absent, other than for an allowed period of absence or because you have been living in job-related accommodation, during your period of ownership
• the garden or grounds including the buildings on them are not greater than a specified area, and
• no part of your home has been used exclusively for business purposes during your period of ownership.

If you meet all of these conditions, you will not have to pay CGT on the disposal.

Consideration of the tax position if you own more than one property which you have occupied in a tax year, or if the above conditions are only partly met, will need to be considered in some detail.

Relief for the disposal of a private residence can also be complicated when owners marry, divorce or permanently separate.

Skills and Enterprise Minister Matthew Hancock announced a new range of apprenticeships that will be developed by employers under the Trailblazer scheme on 27 June 2014. He also called for expressions of interest from groups of employers to become part of the third phase of Trailblazers.

The Apprenticeship Trailblazers, launched in October 2013, have gone from strength to strength. The first phase of Trailblazer sectors includes energy & utilities, digital industries, financial services, life sciences and industrial sciences. Businesses from each sector worked together and produced new concise employer-led standards for key apprenticeship roles in their industry. These were launched in March 2014 and the first apprenticeships under the new standards will be delivered in 2014/15.

Building on their success, the businesses involved will now work on standards for more occupations that they see as crucial to developing their workforce and that will provide new opportunities for young people. The new range of occupations includes:

• workplace pensions
• aerospace machinist
• IT practitioner
• laboratory and healthcare science
• investment operations

Skills and Enterprise Minister Matthew Hancock said:

The apprenticeship Trailblazers have already made great strides in developing a simpler and more rigorous system which works for employers and apprentices. Their commitment to develop more apprenticeship standards demonstrates the support our reforms have from employers.

Equipping all young people with the skills they need to begin prosperous and productive careers is a vital part of our long-term economic plan. Apprenticeships give young people the chance to fulfil their potential while helping to drive business growth.

We want to give more employers in more sectors the chance to lead the development of apprenticeship standards for their industries. That is why we will launch a third phase of Trailblazers later this year and I would encourage groups of employers to step forward and take this opportunity.

Please call if you would like to discuss the possibility of developing an apprenticeship scheme for your business.

The State Pension is part of a pensioner’s taxable income. The problem is, it is paid gross, without deduction of tax.

If your sole source of income is the State Pension then this should cause no problem as the State Pension is usually below the annual tax-free personal allowance. What can, and does, cause a problem is if you have other sources of income that combined with your State Pension exceed your personal tax-free allowance.

The assumption most pensioners make is that they can spend their State Pension. Unfortunately, this can lead to cash flow problems if a tax bill drops through your door. This should only happen if you have other income sources and any tax stopped on those additional income streams is insufficient to cover your total tax liabilities: based on all your income including State Pension receipts.

If you have additional income and receive a State Pension, it is necessary to crunch the numbers and see if you should be saving to meet a future tax bill. Readers concerned about their position should talk to the tax office or their professional tax advisor.

The UK’s new TV tax credit for approved productions in the UK are going down a storm with production companies on both sides of the Atlantic.

One of the key draws to working on productions in the UK, aside from the financial incentives, is the large pool of experienced crew and actors based in the UK.

TV production incentives were first introduced in Northern Ireland and attracted the popular “Game of Thrones” series. This provided the inspiration for the wider offer to the UK as a whole.

The “High-end Television Tax Relief” (HTR) is available if the following conditions are met:

• the programme passes the cultural test – a similar test to that for FTR but within the European Economic Area
• the programme is intended for broadcast
• the programme is a drama, comedy or documentary
• at least 25% of the total production costs relate to activities in the UK
• the average qualifying production costs per hour of production length is not less than £1million per hour
• the slot length in relation to the programme must be greater than 30 minutes

Programmes commissioned together are treated as 1 programme.

However, your company can't claim HTR if the programme:

• is an advertisement or promotional programme
• is a news, current affairs or discussion programme
• is a quiz or game show, panel show, variety show, or similar programme
• consists of or includes an element of competition or contest
• broadcasts live events, including theatrical and artistic performance
• is produced for training purposes

The availability of this relief has reversed the previous outflow of investment from the UK in this type of TV production.

Many employers pay their employees a monthly car allowance to compensate them for the business use of their private vehicles. In most cases this car allowance is treated as remuneration and is subject to PAYE and National Insurance deductions.

 Additionally, employers may also pay a nominal amount per mile as a contribution to fuel costs.

 Employers are entitled to pay their employees a tax free mileage allowance for the business use of their private vehicles. The rates are:

• 45p per mile for the first 10,000 miles in any tax year, and
• 25p per mile for any additional use.

In a recently decided case, an employer that paid less than the 45p (25p) tax free rates, was enabled to deduct the difference between the actual rate paid and tax free rates available, from the monthly car allowance, before working out any employer’s or employee’s National Insurance Contributions due on the monthly car allowance.

 If the amount being paid for business use of fuel is nominal, this can make quite a difference to National Insurance Contributions that are due.

 Employers reading this article, whose circumstances match the following criteria, may be able to claim refunds for overpayment of past NIC deducted from car allowance payments. The outcome of such claims will depend on how closely their circumstances mirror the decided case mentioned above, and HMRC’s interpretation of the ruling:

 The criteria are:

• You pay or have paid employees a regular car allowance.
• You have also paid nominal mileage rates to cover business related fuel costs, below the current tax free rates of 45p (25p) per mile.

Please note that in the decided case discussed in this article, the allowance was only paid to employees travelling more than 2,500 business miles each year though the mileage rate they received was correspondingly reduced to 12p per mile from 40p. It was thus aimed at compensating those incurring additional costs for using their cars substantially for business purposes.

In a recently decided tax case a self-employed air conditioning engineer, David Keyl, was denied a claim for AIA. He had purchased a van in July 2008 and on 31 March 2009 (the end of his trading year) he transferred his sole trader business to a limited company.

Unfortunately, the legislation setting up the AIA includes a provision that relief will be denied in the year in which a trade discontinues.

In the case of David Keyl his sole trader business ceased to trade 31 March 2009 and therefore no claim could be made for AIA in the tax year 2008-09. The fact that Mr Keyl had continued to provide maintenance under existing contracts made no difference to this judgement.

The lesson to be learned here is that a decision to incorporate a business should not be taken lightly. If Mr Keyl and his advisors had reviewed the larger transactions he had entered into during 2008-09, they may well have delayed incorporation to the following year.

 Consider the following facts:

• The filing deadline for a Stamp Duty Land Tax return was a Sunday.
• A member of the advisor’s staff forgot to file the return by the end of the Friday – two days before the deadline.
• Realising their mistake, the staff member took the file home with the intention of filing over the weekend.
• Due to problems with internet access it was impossible to file the return before the deadline expired.

The return was subsequently filed the next working day, a Monday – one day late.

HMRC charged a late filing penalty and the tax payer appealed.

The court decided that the penalty had been charged in accordance with legislation and the tax payer had no grounds to appeal. The fact that internet access was not available did not affect the issue. The First-tier Tribunal noted that “leaving matters to the last minute was a recipe for disaster” and that it did not have jurisdiction to decide on the fairness of a penalty.

This reminder will affect landlords of unfurnished let property who are considering the replacement of standalone white goods (fridges etc) and similar items.

 Following the withdrawal of a tax concession from April 2013, there is effectively no tax relief for the replacement of defective, free-standing white goods in unfurnished properties.

 In some respects this absence of relief is difficult to justify but HMRC are clear that, at present, expenditure to replace free standing white goods etc from April 2013 will not be tax deductible.

 However, if a fridge is incorporated into a fitted kitchen, any replacement of defective white goods will be allowed as a repair. The distinction is that a fitted fridge is only part of the overall fitted kitchen, whereas a free standing fridge is an item in its own right.

 A genuine repair to keep an item in a working or usable condition will, of course, still be tax deductible.

 Replacement of white goods in furnished property is covered by the annual 10% “wear and tear” allowance.