June 2023 | DSK Partners LLP

Deadline to top-up NIC contributions extended

Posted on June 22, 2023 by

In certain circumstances it can be beneficial to make voluntary National Insurance Contributions (NICs) to increase your entitlement to benefits, including the State or New State Pension.

Usually, HMRC allow you to pay voluntary contributions for the past 6 tax years. The deadline is 5 April each year. However, there is currently an opportunity for people to make up for gaps in their NICs for the tax years from April 2006 to April 2017 as part of transitional measures to the new State Pension.

This deadline was set to expire on 5 April 2023 but had been extended until 31 July 2023. The deadline has now been further extended until 5 April 2025 to help allay continued concerns that the existing deadline would not have allowed many taxpayers to fill gaps in their NIC records. HMRC’s helplines have been struggling to meet the demands for information and processing claims to pay additional NIC contributions.

HMRC has also confirmed that all relevant voluntary NIC payments will be accepted at the rates applicable in 2022-23 until 5 April 2025.

You might want to consider making voluntary NICs if:

You are close to State Pension age and do not have enough qualifying years to get the full State Pension.
You know you will not be able to get the qualifying years you need to get the full State Pension during the remainder of your working life.
You are self-employed and do not have to pay Class 2 National Insurance contributions because they have low profits.
You live outside the UK but want to qualify for benefits.

If you fall within any of these categories, it may be beneficial to get a State Pension forecast and examine whether you should consider making voluntary NICs to make up missing years, known as topping up. Not everyone will benefit from making voluntary NICs and a lot depends on how close you are to retirement age and your NIC payments to date. If you think this opportunity may be relevant to your circumstances, please be in touch.

Source: HM Revenue & Customs Tue, 20 Jun 2023 00:00:00 +0100

Regulated businesses hit with Anti-Money Laundering fines

Posted on June 22, 2023 by

The Money Laundering Regulations (MLR) are designed to protect the UK financial system and put in place certain controls to prevent businesses being used for money laundering by criminals and terrorists.

HMRC has named 240 supervised businesses that have been fined a total of £3.2 million for not complying with the anti-money laundering rules. The fines were issued between 1 July and 31 December 2022 for breaches of the regulations designed to stop criminals laundering money from illegal activity.

One of the businesses, based in London, was hit with a large fine of £1.4 million for failing to carry out risk assessments, not having appropriate anti-money laundering controls, and failing to conduct proper due diligence checks.

This crackdown on money service businesses has resulted in a significant reduction in these types of firms over the last number of years.

HMRC is clear that money service businesses provide vital services to the community, offering currency exchange, money transmission and cheque cashing. However, criminals can exploit them to launder the proceeds of crime and so must have a robust risk assessment and policies, controls, and procedures to prevent this.

Source: HM Revenue & Customs Tue, 20 Jun 2023 00:00:00 +0100

Capital Gains Tax Gift Hold-Over Relief

Posted on June 22, 2023 by

Gift Hold-Over Relief is a tax relief that results in a deferral of Capital Gains Tax (CGT). The relief can be claimed when assets are given away (including certain shares) or sold for less than they are worth to help benefit the buyer. The relief means that any gain on the asset is 'held-over' until the recipient of the gift sells or disposes of them. This is done by reducing the donee's acquisition cost by the amount of the held over gain.

The person gifting a qualifying asset is not subject to CGT on the gift. However, CGT may be payable where the asset is sold for less than it’s worth. Gifts between spouses and civil partners don’t trigger capital gains. A claim for the relief must be made jointly with the person to whom the gift was made.

If you are giving away business assets, you must:

be a sole trader or business partner, or have at least 5% of voting rights in a company (known as your 'personal company'); and
use the assets in your business or personal company.

You can usually get partial relief if you used the assets only partly for your business.

If you are giving away shares, then the shares must be in a company that is either:

not listed on any recognised stock exchange; or
your personal company.

The company's main activities must be of a trading nature, for example, providing goods or services rather than non-trading activities like investment.

Source: HM Revenue & Customs Tue, 20 Jun 2023 00:00:00 +0100

New powers for charities

Posted on June 19, 2023 by

From 14 June 2023, the latest set of changes mandated by the Charities Acts 2022 came into force.

Changes now in place include simplified legal requirements that charities must comply with before selling, transferring or leasing land, and new statutory powers to enable:

Charities to spend, in certain circumstances, a proportion or all of their permanent endowment fund where the market value of the fund is (£25,000 or less) without Commission authorisation.
Charities to borrow, in certain circumstances, up to 25% of the value of their permanent endowment fund without Commission authorisation.
Charities that have opted into a total return approach to investment to use permanent endowment to make social investments with a negative or uncertain financial return, provided any losses are offset by other gains.
The Commission to direct a charity to stop using a working name if it is too similar to another charity’s name or is offensive or misleading.
The Commission to delay registration of a charity with an unsuitable name or delay entry of a new unsuitable name onto the Register of Charities. Working with the principal regulator, the Commission can also use these naming powers on exempt charities.

The Director of Legal & Accounting Services at the Charity Commission said:

“The latest changes introduced by the Charities Act 2022 give the charities we regulate more flexibility and greater powers. These are positive changes that will impact a significant number of charities, so it is important all organisations, big or small, take the time to check what this means for them. This is especially important if they are looking, for example, to dispose of land. We have updated our guidance to help trustees understand the changes, and our contact centre is open to those who need further support.”

Source: Other Mon, 19 Jun 2023 00:00:00 +0100

New life sciences growth package announced

Posted on June 15, 2023 by

The Chancellor, Jeremy Hunt, has announced a new £650 million package of measures to help boost UK life sciences.

The new ‘Life Sci for Growth’ package brings together 10 different policies including £121 million to improve commercial clinical trials to bring new medicines to patients faster, up to £48 million of new money for scientific innovation to prepare for any future health emergencies, £154 million to increase the capacity of the UK’s biological data bank – further aiding scientific discoveries that help human health – and up to £250 million to incentivise pension schemes to invest in our most promising science and tech firms.

The package also includes plans to relaunch the Academic Health Science Network as Health Innovation Networks as well as changes to planning rules to free-up lab space and updating a route for East West Rail to improve connections between the UK science powerhouses of Oxford and Cambridge.

Launching the package, the Chancellor said:

‘Our Life Sciences sector employs over 280,000 people, makes £94 billion for the UK each year and produced the world’s first covid vaccine.

These are businesses that are growing our economy while having much wider benefits for our health – and this multi-million pound investment will help them go even further.’

Source: HM Treasury Mon, 12 Jun 2023 00:00:00 +0100

Passport delays and applications

Posted on June 15, 2023 by

A recent investigation by the House of Commons Committee of Public Accounts, in connection with the UK passport office, has found that hundreds of thousands of applicants faced unacceptable delays in receiving their passports.

Following the removal of COVID-19 travel restrictions, His Majesty’s Passport Office (HMPO) received a record number of passport applications. HMPO had anticipated this surge in applications, however, whilst staff processed a record number of applications, many people were let down.

The consequences of these delays included being unable to travel for family emergencies, losing money spent on holidays and having difficulties proving their identities. Another surge in demand is predicted for this year, meaning that now might be a good time to check if your passport needs to be renewed.

It is currently taking up to 10 weeks for passports to be issued. It takes longer for postal applications to be processed than online applications. There are also premium services available at an additional cost.

The current fees for a new passport are as follows:

Type of passport	Apply online	Apply by paper form
Adult (16 and over) standard 34-page	£82.50	£93
Adult (16 and over) 50-page frequent traveller	£93.50	£104
Child (under 16) standard 34-page	£53.50	£64
Child (under 16) 50-page frequent traveller	£64.50	£75
For people born on or before 2 September 1929	Free	Free

Source: Other Mon, 12 Jun 2023 00:00:00 +0100

Check when to expect reply from HMRC

Posted on June 15, 2023 by

HMRC has a useful online tool to help agents and taxpayers know when they can expect to receive a reply from HMRC regarding a query or request that they have made. The online tool is updated weekly.

The online tool has recently been extended to include information about employers’ PAYE and National Insurance.

The full list of taxes the tool can be used for are as follows:

Child Benefit
Corporation Tax
Employers’ PAYE
Income Tax
National Insurance
Self-Assessment
Tax credits
VAT

Agents can also check how long it will take HMRC to:

register you as an agent to use HMRC online services;
process an application for authority to act on behalf of a client; and
amend your agent details.

The online tool can be accessed at the following address, and you do not have to be logged in to receive an answer: https://www.tax.service.gov.uk/guidance/Check-when-you-can-expect-a-reply-from-HMRC/start/are-you-an-agent

Source: HM Revenue & Customs Mon, 12 Jun 2023 00:00:00 +0100

Gift Aid small donations scheme

Posted on June 15, 2023 by

The Gift Aid Small Donations Scheme (GASDS) allows qualifying charities and Community Amateur Sports Clubs (CASCs) to claim a top-up equivalent to Gift Aid on small donations of money made without a Gift Aid declaration. A small donation is defined as a donation of £30 or less made in cash or using contactless technology, such as a contactless credit or debit card. Donations made by other methods of payment such as cheque or bank transfer do not count.

The maximum annual amount of small donations that can be claimed through the GASDS is the lower of £8,000 or 10 times the amount the charity receives in Gift Aid donations – known as the matching rule. The £8,000 limit allows charities and CASCs to claim Gift Aid style top-up payments of up to £2,000 a year.

Usually, to claim gift aid the donor must have paid Income Tax or Capital Gains Tax at least equal to the amount the charity wants to claim and must complete a gift aid declaration. However, under the GASDS charities can claim tax relief on cash donations of £30 or less without a gift aid declaration or even knowing the identity of the donor.

Source: HM Revenue & Customs Mon, 12 Jun 2023 00:00:00 +0100

Effects of settlement legislation

Posted on June 15, 2023 by

The settlement legislation is intended to prevent an individual from gaining a tax advantage by diverting his or her income to another person who is liable at a lower rate of tax or is not liable to Income Tax.

Where a settlor has retained an interest in a property in a settlement the income arising is treated as the settlor’s income for all tax purposes. A settlor can be said to have retained an interest if the property or income may be applied for the benefit of the settlor, a spouse or civil partner.

In general, the anti-avoidance settlements legislation can apply where an individual enters into an arrangement to divert income to someone else and in the process, tax is saved.

These arrangements must be:

bounteous, or
not commercial, or
not at arm’s length, or
in the case of a gift between spouses or civil partners, wholly or substantially a right to income.

However, there are a number of everyday scenarios where the settlements legislation does not apply. In fact, after much case law in this area, HMRC has confirmed that if there is no 'bounty' or if the gift to a spouse or civil partner is an outright gift which is not wholly, or substantially, a right to income, then the legislation will not apply.

Source: HM Revenue & Customs Mon, 12 Jun 2023 00:00:00 +0100

Tax exempt private medical costs

Posted on June 15, 2023 by

There is no requirement for employers to pay tax and National Insurance on certain health benefits covered by tax concessions or exemptions. For example, there is no requirement to report employees’ medical or dental treatment or insurance if they are a part of a salary sacrifice arrangement.

In addition, the following health benefits can be provided tax free:

A maximum of one health-screening assessment and one medical check-up in any year.
Eye tests required by health and safety legislation for employees who use a computer monitor or other type of screen.
Glasses or contact lenses required by employees for working on computer monitors or other types of screen.
Medical treatment for employees working overseas. The employer must have committed in advance to pay for this treatment or must pay the provider directly for the employee’s treatment or insurance.
Medical treatment or insurance related to injuries or diseases that result from your employee’s work.
Medical treatment to help an employee return to work. This allows the employer to pay up to £500 in costs for an employee to return to work.
Any medical or dental treatment or insurance provided that is not exempt must be reported to HMRC. Employers may be required to deduct and pay tax and National Insurance on these amounts.

Source: HM Revenue & Customs Mon, 12 Jun 2023 00:00:00 +0100

Month: June 2023

Deadline to top-up NIC contributions extended

Regulated businesses hit with Anti-Money Laundering fines

Capital Gains Tax Gift Hold-Over Relief

New powers for charities

The Director of Legal & Accounting Services at the Charity Commission said:

New life sciences growth package announced

Passport delays and applications

Check when to expect reply from HMRC

Gift Aid small donations scheme

Effects of settlement legislation

Tax exempt private medical costs

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