Call: 01259721156
Email: Mark@stewartaccounting.co.uk
stewartaccounting.co.uk
June 2021
Welcome to our monthly newswire. We hope you enjoy reading this newsletter and find it
useful. Please contact us if you would like to discuss any matters further.
BEWARE MINI-UMBRELLA
£9065 for 2020/21. If they are a higher rate
taxpayer then that means £3,626 tax. That
COMPANY FRAUD
CAR BENEFIT REDUCED
would be an awful lot of private fuel!
WHERE UNAVAILABLE
HMRC are urging businesses to look out for
P11d forms reporting benefits in kind
In addition to the tax payable by the director
the use of mini-umbrella companies
provided to employees and directors need to
on the provision of private fuel there would
(MUCs) to pay contractors supplying their
be submitted to HMRC by 6 July. Where a
be £1251 Class 1A national insurance
labour via agencies and other
company car is “unavailable” for private use
contributions payable by the employer.
intermediaries. Businesses need to be
for 30 or more consecutive days the benefit
aware of the financial and reputational risks
Note that the private fuel benefit is an all or
is proportionately reduced.
of such entities in their labour supply chain
nothing benefit. There must be full
and carry out due diligence to minimise
reimbursement by 6 July to eliminate the
During the various lockdown periods many
those risks.
benefit. The simplest method would be to
employees and directors have not been
multiply private miles by the HMRC advisory
using their company cars and it may have
You may have heard a BBC File on Four
been sitting on their driveway. Unfortunately,
radio programme that highlighted the abuse
of the £4,000 employment allowance by
that does not count as being unavailable.
48,000 companies set up to take advantage
of the allowance to save employers national
HMRC have confirmed that they would
insurance. Such structures are also being
continue to regard the car as available to the
used to avoid VAT and are currently being
employee unless the keys or fobs are
marketed as a means of side-stepping the
returned to the employer or to a third party
“off payroll” working rules.
such as the leasing or disposal company as
instructed by the employer.
fuel rate for the vehicle -see next page.
HMRC have identified criminals creating a
series of MUCs that appear unconnected
ADVISORY FUEL RATE FOR
Note that where the employee is provided
and claiming the NIC employment
COMPANY CARS
with a motor car with zero CO2 emissions
allowance of £4,000 for each company. The
company is then struck off after about 18
there is no taxable benefit in kind for
These are the suggested reimbursement
months allowing the criminals to potentially
2020/21 although the charge increases to
rates for employees’ private mileage using
avoid paying thousands of pounds of
1% of original list price for 2021/22.
their company car from 1 June 2021.
employers’ NICs.
REIMBURSE PRIVATE FUEL
The risks to end user organisation include
Where there has been a change the
BY 6 JULY TO AVOID FUEL
becoming liable for unpaid taxes and
previous rate is shown in brackets.
BENEFIT
national insurance contributions including
the overclaimed employment allowance.
Another consequence of the lockdown
periods is that employees may have driven
The business may also be denied the right
fewer private miles in their company cars,
to claim input tax if the trader should have
particularly where they have not been driving
known their transactions were connected
to the office.
with VAT fraud.
They may also be penalised for criminal
If they are to avoid being taxed on the
offences relating to national minimum wage
provision of private fuel they need to fully
reimburse their employer for the cost of
and national living wage. The business may
private fuel by 6 July 2021 for the 2020/21
also face fines for failure to prevent the
tax year.
criminal facilitation of tax evasion.
Note that the CO2 emissions percentage for
Please contact us if you would like us to
the car is multiplied by the £24,500 notional
assist you in carrying out due diligence into
list price used to calculate the benefit. For
your labour supply chain to minimise these
example, a director driving a Mercedes Benz
risks.
E200 saloon company car (CO2 emissions
169g per km) would be assessed on 37% =
Please contact a member of our team if you would like to
discuss any of the issues raised.
Call: 01259721156 Email: Mark@stewartaccounting.co.uk
Call: 01259721156
Email: Mark@stewartaccounting.co.uk
stewartaccounting.co.uk
CHECK THAT YOUR SHARES
Engine
QUALIFY FOR CGT
Petrol
Diesel
LPG
DIARY OF MAIN TAX
Size
BUSINESS ASSET DISPOSAL
EVENTS
RELIEF
1400cc
11p
8p
JUNE/JULY 2021
or less
(10p)
(7p)
A recent case before the tax tribunal has
confirmed that all of a company’s shares are
1600cc
9p
ordinary shares except those that carry a
Date
What’s Due
or less
fixed rate of return.
Corporation tax for year to 31/8/20
1401cc
13p
01/06
9p
This is crucial as CGT business asset
(unless pay quarterly)
to
(12p)
(8p)
2000cc
disposal (BAD) relief requires a shareholder
to be entitled to at least 5% of a company’s
PAYE & NIC deductions, and CIS
1601 to
11p
ordinary share capital in addition to being an
19/06
return and tax, for month to 5/6/21
2000cc
officer or employee of the company, and for
(due 22/06 if you pay electronically)
the company to be a trading company or the
Over
19p
13p
14p
holding company of a trading group.
Corporation tax for year to 30/9/20
2000cc
(18p)
(12p)
(12p)
01/07
(unless pay quarterly)
These conditions need to be satisfied
Note that for hybrid cars you must use the
throughout the 24 months prior to the
Last date for agreeing PAYE
petrol or diesel rate. You can continue to
disposal of the shares. This two-year rule is
05/07
settlement agreements for 2020/21
use the previous rates for up to 1 month
important if you are considering transferring
employee benefits
from the date the new rates apply.
some of your shares to other family
members now that only the first £1 million
Deadline for agents and tenants to
qualifies for CGT BADR.
submit returns of rent paid to non-
NOT ALL BENEFITS NEED TO
05/07
resident landlords and tax deducted for
BE REPORTED ON FORM
There are a number of further conditions that
2020/21
P11D
need to be satisfied by the shareholding in
addition to the 5% ordinary share capital test.
Deadline for forms P11D and P11D(b)
Despite the coronavirus lockdowns HMRC
for 2020/21 tax year. Also, deadline for
The shareholder must have 5% or more
06/07
still expect P11d forms reporting expenses
notifying HMRC of shares and options
voting control and be entitled to 5% or more
and benefits to be submitted by the normal 6
awarded to employees.
of the company’s distributable profits, and of
July deadline.
its assets should be company be wound up.
Those final two conditions do not need to be
PAYE & NIC deductions, and CIS
Remember that reimbursed expenses no
19/07
return and tax, for month to 5/7/21
satisfied where the shareholder would be
longer need to be reported where they are
(due 22/07 if you pay electronically)
incurred wholly, exclusively and necessarily
entitled to receive at least 5% of the
in the performance of the employee’s duties.
proceeds on the hypothetical sale of the
Dispensations from reporting are no longer
whole company.
50% payment on account of 2021/22
31/7
required, although HMRC would expect
tax liability due.
internal controls to be in place.
This tends to be a problem area where a
Note also that trivial benefits of no more than
company has a number of different classes
£50 provided to employees need not be
of shares.
reported. This typically covers gifts to
If that is the case please contact us so that
employees at Christmas and on their
we can check the eligibility of different
birthdays.
shareholders.
Please contact a member of our team if you would like to
discuss any of the issues raised.
Call: 01259721156 Email: Mark@stewartaccounting.co.uk