The coalition may be no more but tax policies for businesses that the Conservatives and Lib Dems agreed on together are still being rolled out.
One that will make a big difference to offices, call centres, shops and other businesses that employ a lot of people under 21: you no longer need to pay Class 1 secondary National Insurance contributions on earnings up to the Upper Secondary Threshold (UST) for those employees. Instead, each employee will be graded in one of seven categories, based on their age and circumstances. It’s hoped that this will boost youth employment and encourage British firms to take young staff on and train them up.
Brits who work overseas — expats — will have to pay income tax on restricted shares and share options. The fee will apply to all transactions made after 6 April 2015 but employees will be able to pro-rate any UK taxable gain to exclude that part of the gain relating to duties performed outside the UK during a period of non-residence.
HMRC has long been clamping down on tax evasion and a new law means that intermediaries (anyone making arrangements for an individual working for a third party) are required to send reports to HMRC about agency workers who are not paid via PAYE, so they can check that they have filed a self-employed tax return.
The new rules were introduced as a result of increasing abuse of the use of intermediary status, self-employment and supplying UK workers from an offshore location. Also on tax evasion, under the Construction Industry Scheme (CIS), contractors must now deduct money from a subcontractor’s payments and send it to HMRC. The deductions count as advance payments towards the subcontractor’s tax and National Insurance. This will actually be a big help for subcontractors who struggle to save for one big payment of tax — and will help us move towards a system where tax for self-employed workers is always up to date, not calculated once a year.