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Capital Allowances

Posted on March 22, 2012 by DRE

Plant and Machinery:

* Transitional rules may apply

 

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Vehicle Benefits

Posted on March 22, 2012 by DRE

 

Chargeable on employees earning £8,500 or over (including benefits), and directors.

Car Benefit

The taxable benefit is calculated as a percentage of the list price of the car, on the day before it was first registered, plus certain accessories. This percentage depends upon the rate at which the car emits carbon dioxide (CO₂), and the fuel type.

For cars which cannot produce CO₂ engine emissions under any circumstances when driven (‘zero emission cars’, including those powered solely by electricity), the appropriate percentage is reduced to 0%, thereby reducing the car benefit charge to nil.

For cars emitting between 1 and 75g/km the appropriate percentage is reduced to 5% (8% for diesel) for 5 years from 6 April 2010.

You can find the appropriate percentage for 2012/13 using the following table:

CO2 emissions (g/km)	Appropriate percentage
	Petrol %	Diesel %
Zero	0	0
Up to 75	5	8
76-99	10	13
100-104	11	14
105-109	12	15
110-114	13	16
115-119	14	17
120-124	15	18
125-129	16	19
130-134	17	20
135-139	18	21
140-144	19	22
145-149	20	23
150-154	21	24
155-159	22	25
160-164	23	26
165-169	24	27
170-174	25	28
175-179	26	29
180-184	27	30
185-189	28	31
190-194	29	32
195-199	30	33
200-204	31	34
205-209	32	35
210-214	33	35
215-219	34	35
220 and above	35	35

 

How to find out how much CO₂ your company car emits – see:

the car’s V5 registration document your dealer the data pages of car magazines (current models)

the Vehicle Certification Agency – www.vca.gov.uk the website of the Society of Motor Manufacturers and Traders – www.smmt.co.uk/co2/co2search.cfm

 

Reliable emissions data is not widely available for cars registered before 1 January 1998. For them, the following taxable percentages apply, regardless of fuel type:

 

Engine capacity	Taxable %
Up to 1400cc	15%
1401 – 2000cc	22%
Over 2000cc	32%

 

Car fuel benefits

The taxable car fuel benefit, for 2012/13, is calculated by multiplying £20,200 by the same percentage as applies (or would apply) for the car benefit.

If the employee pays for the full cost of all fuel for private journeys (usually including home to work) there will be no car fuel benefit. In all other cases the full tax charge will be due.

 Fuel-Only Mileage Rates

HMRC advisory mileage rates at the time of the Budget for employee private mileage reimbursement or employer reimbursement of business mileage in company cars are:
Engine Size	Petrol	LPG
1400cc or less	15p	10p
1401cc – 2000cc	18p	12p
Over 2000cc	26p	18p
Engine Size	Diesel
1600cc or less	13p
1601cc – 2000cc	15p
Over 2000cc	19p

 

Example: A company car driver has a car which, on the day before it was first registered, had a list price of £21,000. It runs on petrol, and emits 177 g/km of CO₂.

If we assume the driver pays tax at 40%, the 2012/13 tax bill on the car is: £21,000 x 26% x 40% = £2,184

If the employer provides any fuel used for private journeys and is not reimbursed for the cost, the 2012/13 tax bill for the fuel is: £20,200 x 26% x 40% = £2,100.80.

Company vans

The taxable benefit for the unrestricted use of company vans is £3,000 plus a further £550 of taxable benefit if fuel is provided by the employer for private travel.

 

Van and fuel charge	Van	Fuel	Total
Tax (20% taxpayer)	£600	£110	£710
Tax (40% taxpayer)	£1,200	£220	£1,420
Tax (50% taxpayer)	£1,500	£275	£1,775
Employer’s class 1A NICs	£414	£75.90	£489.90

 

Van drivers can avoid a benefit charge if they agree not to use the van for personal journeys. Driving to and from work is acceptable so long as there is a reasonable amount of business use.

The flat rate of £3,000 is reduced to nil for vans which cannot produce C0₂ engine emissions under any circumstances when driven. There is no fuel benefit for such vans.

 

 

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Value Added Tax

Posted on March 22, 2012 by DRE

 

	From 4 Jan 2011
Standard rate	20%
VAT fraction	1/6
Reduced rate	5%
Taxable Turnover Limits
Registration – last 12 months or next 30 days over	£77,000 from 1 April 2012
Deregistration – next 12 months under	£75,000 from 1 April 2012
Cash accounting scheme – up to	£1,350,000
Optional flat rate scheme – up to	£150,000
Annual accounting scheme – up to	£1,350,000

 

VAT on fuel for private use in cars

Where businesses wish to reclaim the input VAT on fuel which has some degree of private use, they must account for output VAT on a scale charge.

 

The table shows the VAT chargeable for quarters commencing on or after 1 May 2012.

CO2 emissions (g/km)	Quarterly VAT
	Fuel scale charge £	VAT on charge £
Up to 124	166	27.67
125-129	250	41.67
130-134	266	44.33
135-139	283	47.17
140-144	300	50.00
145-149	316	52.67
150-154	333	55.50
155-159	350	58.33
160-164	366	61.00
165-169	383	63.83
170-174	400	66.67
175-179	416	69.33
180-184	433	72.17
185-189	450	75.00
190-194	467	77.83
195-199	483	80.50
200-204	500	83.33
205-209	517	86.17
210-214	533	88.83
215-219	550	91.67
220-224	567	94.50
225 and above	583	97.17

 

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Stamp Taxes

Posted on March 22, 2012 by DRE

 

The rate of stamp duty / stamp duty reserve tax on the transfer of shares and securities is generally payable at 0.5 per cent.

Stamp Duty Land Tax

Transfers of property are subject to stamp duty land tax at the following rates:
Value up to £125,000*	Nil
Over £125,000* to £250,000	1%
Over £250,000 to £500,000	3%
Over £500,000 – £1,000,000 **	4%
Over £1,000,000 ** – £2,000,000 **	5%**
Over £2,000,000**	7%**
* £150,000 for non-residential property and residential property in disadvantaged areas. Special rules apply for new zero-carbon homes. ** Residential property only. A 15% rate will apply to properties over £2,000,000 purchased by certain “non-natural persons”.

 

New Leases

Duty is charged according to the net present value of all the rental payments over the term of the lease (NPV), with a single rate of 1% on residential NPV’s over £125,000 and on non-residential NPV’s over £150,000.

VAT is excluded from treatment as consideration provided the landlord has not opted to charge VAT by the time the lease is granted.

Lease premiums

Duty on premiums is the same as for transfers of land (except that the zero rate does not apply where rent of over £600 annually is also payable).

 

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Other Rates

Posted on March 22, 2012 by DRE

		Weekly Benefit
		2012/13	2011/12
Basic Retirement Pension
Single person		£107.45	£102.15
Couple		£171.85	£163.35
Child Benefit
First eligible child		£20.30	£20.30
Each subsequent child		£13.40	£13.40
Statutory Sick Pay (SSP)
Average weekly earnings £107 or over (2011/12 £102)		£85.85	£81.60
Statutory Maternity Pay (SMP)
90% of average weekly pay		First 6 weeks	First 6 weeks
Maximum £135.45 (2011/12 £128.73). Minimum 90% average weekly pay		Next 33 weeks	Next 33 weeks
Minimum rate		£96.30	£91.80
Statutory Adoption Pay (SAP)		39 weeks	39 weeks
Statutory Paternity Pay (SPP)*		2 weeks	2 weeks
Both SAP and SPP
90% of average weekly pay		Max £135.45 Min £96.30	Max £128.73 Min £91.80
Jobseekers Allowance
Single person		£71.00	£67.50
Couple		£111.45	£105.95
National Minimum Wage**		From 1 October 2012	From 1 October 2011
	21 and over	£6.19 p.h.	£6.08 p.h.
	18 – 20	£4.98 p.h.	£4.98 p.h.
	16 and 17	£3.98 p.h.	£3.68 p.h.
	Apprentices**	£2.65 p.h.	£2.60 p.h.
* Additional statutory paternity pay (ASPP) may be available on or after 3 April 2011. **Rate applies to apprentices under 19, or those 19 and over in the first year of apprenticeship.

 

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Savings and Investments

Posted on March 22, 2012 by DRE

 

Individual Savings Accounts (ISAs)
Overall investment limit	£11,280
Including cash maximum of	£5,640

 

Notes

1.Investments in ISAs are free of income tax and capital gains tax.

2.Those aged 16-17 can invest in a cash ISA.

3.ISAs allow you to take your money out at any time without losing tax relief and furthermore you are not required to declare income and capital gains from ISA savings.

4.The annual investment limit for a Junior ISA is £3,600.

 

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Pension Premiums

Posted on March 22, 2012 by DRE

 

There is no financial limit on the amount that may be contributed to a registered pension scheme. The maximum amount on which an individual can claim tax relief in any tax year is the greater of the individual’s UK relevant earnings or £3,600.

 

If total pension input exceeds the annual allowance of £50,000 there may be a tax charge on the excess.

 

Maximum age for tax relief	74
Minimum age for taking benefits	55
Lifetime allowance charge – lump sum paid	55%
Lifetime allowance charge – monies retained	25%
on cumulative benefits exceeding	£1,500,000*
Maximum tax-free lump sum	25%*

 

*Subject to transitional protection for excess amount.

 

Note – Total pension input is the increase in value of the aggregate of all the individual’s pension savings. The pension input period is usually the year to the anniversary date which falls within the relevant tax year.

 

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National Insurance Contributions

Posted on March 22, 2012 by DRE

 

Class 1 (not contracted out)	Employer	Employee
Payable on weekly earnings of
Up to £107 (lower earnings limit)	Nil	Nil
£107 – £144 (employers’ earnings threshold)	Nil	Nil
£144.01 – £146 (employees’ earnings threshold)	13.8%	Nil
£146.01 – £770 (upper accrual point)	13.8%	12%
£770.01 – £817 (upper earnings limit)	13.8%	12%
Over £817	13.8%	2%
Over state retirement age, the employee contribution is generally Nil
Class 1A (on relevant benefits)	13.8%	Nil
Class 1B (on PAYE settlement arrangement)	13.8%	Nil
Class 2 (Self employed)	£2.65 per week
Limit of net earnings for exception	£5,595 per annum
Class 3 (Voluntary)	£13.25 per week
Class 4* (Self employed on profits)
£7,605 – £42,475	9%
Excess over £42,475	2%
*Exemption applies if state retirement age was reached by 6 April 2012.

 

Note

For those earning between £107 per week and £770 per week, employers receive a rebate of 3.4% on contracted out salary related schemes, and employees a rebate of 1.4%.

 

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Mileage Allowances

Posted on March 22, 2012 by DRE

 

It is quite normal practice for employees to be reimbursed at a reasonable mileage rate for business use of their own vehicles. The income tax and national insurance contributions (NICs) position is as follows:

 

A statutory system of Approved Mileage Allowance Payments (AMAPs) applies for employees using their own vehicles for business journeys, as follows:
Cars and vans: on the first 10,000 miles in the tax year on each additional mile above this	45p per mile 25p per mile
Motorcycles	24p per mile
Bicycles	20p per mile

 

It is no longer possible to make a claim for tax relief based on the actual receipted bills, nor claim capital allowances or interest on loans related to car purchases.

 

Unless the employee is reimbursed at a rate higher than the AMAP, the payments do not need to be reported on a P11D. If the employer pays less than these rates, it is possible for the employee to claim income tax relief for the shortfall.

 

Rates of up to 5p per mile, per passenger, are also tax- and NICs- free when paid for the carriage of fellow employees on the same business trip. This now also covers volunteers who drive for hospital car services etc, even though they are not strictly employees.

 

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Key Dates and Deadlines

Posted on March 22, 2012 by DRE

 

Payment Dates
Income Tax (including Class 4 NIC)
31 July 2012	2011/12 second payment on account
31 January 2013	2011/12 balancing payment, and 2012/13 first payment on account
31 July 2013	2012/13 second payment on account
31 January 2014	2012/13 balancing payment, and 2013/14 first payment on account
Class 1A NICs
19 July 2012	2011/12 payment due
Capital Gains Tax
31 January 2013	2011/12 Capital Gains Tax
31 January 2014	2012/13 Capital Gains Tax
Corporation Tax
9 months and one day after the end of the accounting period
Inheritance Tax
6 months after the end of the month of death.
For chargeable lifetime transfers between 6 April and 30 September, due date is 30 April in the following year.
For chargeable lifetime transfers between 1 October and 5 April, due date is six months after the end of the month in which the transfer was made.
Latest Filing/Issuing Deadlines – 2011/12 PAYE Returns
19 May 2012	P14, P35, P38 and P38A – file online.
31 May 2012	Issue P60s to employees.
6 July 2012	P9D, P11D and P11Db – also issue copies to employees Form 42 (reporting of employment-related securities)
2012 Self Assessment Tax Return (SATR)
31 October 2012	Last filing date – SATR Paper Version
30 December 2012	SATR Online if outstanding tax (less than £3,000) to be included in 2013-14 PAYE code
31 January 2013	Last filing date – SATR Online

 

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