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Tax

Members can login to contact the Taxation helpline.

 

HMRC Tax Guides

 

Members who need tax advice or or who have any queries about any tax issues should first speak to our FMB Tax Advisor Liz Bridge.

 

Any company informed that they are to face an HMRC Full or Aspect Enquiry or a Tax Intervention Enquiry should contact the FMB Information Services Department, Tel: 020 7092 3891.


Get ready for major changes to PAYE reporting under Real Time Information (RTI) 

 

From April 2013 the way that businesses report PAYE data to HMRC will be changing.  Employers will have to send data electronically each time they pay their employees, rather than sending a separate return at the end of the year.  Returns will include details of all employees’ pay, tax and deductions.  You need to speak to your accountant and payroll software or services provider now and check  that your software will cope with the new requirements and, if you pay by BACS, you need to check whether your BACS system will run with RTI.  You also need to check that your employee payroll records are accurate and up to date and may have to add employees such as casuals or those below the lower earnings limit to the payroll system.  See the HMRC helpsheet and visit www.hmrc.gov.uk/rti/index.htm for further information. See also the article by our tax advisor, Liz Bridge, from the December 2012 issue of Master Builder.

 

 

Real Time Information reporting of PAYE delayed until October 2013 for small businesses

On 19th March 2013 HMRC announced that they recognise that some small employers who pay employees weekly, or more frequently, but only process their payroll monthly may need longer to adapt to reporting Pay As You Earn information in real time.  They have agreed that until 5 October 2013, employers with fewer than 50 employees, who find it difficult to report every payment to employees at the time of payment, may send information to HMRC by the date of their regular payroll run but no later than the end of the tax month (5th of each month).  See www.hmrc.gov.uk/news/rti-small-businesses.htm

 

 
Landfill Tax update from FMB Tax Advisor Liz Bridge

Landfill tax is a tax only paid by the operators of landfill sites. They pay £2.50 a tonne for dumping any material that is inert and £64.00 a tonne for dumping material that is active. When landfill site operators 'use' some of the material they accept to engineer the landfill sites themselves, the material they use is not taxed at all as long as it is inert. Because landfill site operators have to pay these taxes to the government, they pass on the costs of these taxes to their customers - muckaway contractors and skip hire companies - as higher fees for accepting the material. If taxes on the landfill site operators go up, their overheads go up and their fees for accepting material to be dumped go up.


HMRC have recently issued statements which say (1) that material previously treated as inert which was regularly used to engineer their sites (and therefore tax free) is actually active and is NOT to be treated as an engineering material. This means that tonnes of material they previously paid no tax on at all, is to be taxed at the higher rate. (2) that the site operators must take more care to make sure that material dumped as inert is really inert and that the operator has evidence to prove it. Many operators have probably been a bit lax about the origin of soils and construction waste and treated it as inert when it probably is active. The site operators are now nervous of being caught for taxes at the higher rate when they have not set their fees to cover such overheads.


The statements mean that the landfill tax operators believe they will be paying more tax, on the material used to engineer their sites, and because some of the tonnage that they have treated as inert probably does not have the necessary documentation to prove it qualified for the lower rate of tax.


The end result is that the landfill site operators fear they will have much more tax to pay and that as a result their overheads will rocket up. Their charges to the skip hirers and muck away contractors have therefore rocketed up to protect themselves. They are all guessing the tax increases, some may be using the opportunity to profiteer, some may know that their existing margins are so tight that they have to move their prices up in the face of increased taxes.


There is little that builders can do but shop around and attempt to get good rates for skips which will qualify for the lower rate. These will be loads which do not contain timber, paint or similar substances, or topsoil. They will be loads of rock, stone, slate and soil extracted below the top layer. More segregation of skips may allow you to get good rates on the skips containing pure inert waste. If you want good rates for inert material ask the skip operator what he will accept as inert and what he will not accept in an 'inert' skip.


It seems likely that waste will cost far more to dump in the future. Make sure that you price in these increases in all quotes from now on. 


Click here to also see a News Alert item on Landfill Tax policy.

 

 

Reduced rate of VAT on the installation of energy-saving materials and systems

You can pay the reduced rate of VAT at 5% on the installation of some energy saving materials and systems in residential accommodation, or in a building intended for use solely for a relevant charitable purpose. However, if you supply energy-saving materials without installing them your supply is at the standard rate.

 

The reduced rate also applies to the grant-funded installation of certain heating equipment (in the sole or main residence of a qualifying person), this includes the price of the equipment itself.  However, if you supply heating equipment without installing it your supply is standard-rated, even if it is grant-funded.

 See HMRC VAT Notice 708/6 (November 2011) for further information.

 

The UK government is currently contesting EU moves to abolish this scheme. Click here for details .


The Information Services Team

Filing tax returns online

Article

November 2009

 

The Government is encouraging more firms to fill in tax forms online as it is a fast, convenient and secure way of exchanging information with HM Revenue & Customs (HMRC).

 

It also cuts down on time, administration and errors, and it means that you’ll get up-to-date PAYE information, such as employee tax codes, almost instantly.

 

You can submit a range of tax returns to HMRC online including:

 

1. CIS

2. Corporation Tax

3. PAYE (Pay As You Earn)

4. Self Assessment

5. VAT.

 

The advantages of filing online include:

1. On-screen help and guidance on how to complete the return

2. Your tax is worked out automatically as you complete the form, which means that you know immediately what you owe or are owed

3. Any money owed to you is repaid more quickly than if you file on paper

4. You receive an online acknowledgment when your return has been received

5. Speed - HMRC processes online returns faster than paper returns

6. Safety, security and convenience - you can use the service day and night.

 

See the HMRC web site for further information on to how use their online services and for details of HMRC and commercial software available for this purpose at www.hmrc.gov.uk/online/

 

You can call the Online Services Helpdesk for technical help, Tel: 0845 60 55999 (open from 8.00am to 8.00pm, seven days a week).

 

CONSTRUCTION INDUSTRY SCHEME (CIS)

If you are a contractor, under the Construction Industry Scheme (CIS), you need to submit monthly returns listing all payments you’ve made to subcontractors. You need to make a monthly CIS return within 14 days of the end of the tax month you’re reporting on - even if there are no subcontractor payments to report. You also need to verify new subcontractors.

 

You can do both of these things electronically using CIS Online.

 

You can access CIS Online using Electronic Data Interchange (EDI), commercial software or HMRC’s free software. If you are a small contractor using fewer than 50 subcontractors each month, you might opt for HMRC’s free software or their approved commercial software suppliers. There are a number of commercial software packages available that can integrate with your own accounting and payroll systems and you can find out about these on the HMRC web site at www.hmrc.gov.uk/ebu/cis-online.htm

 

CORPORATION TAX

All company tax returns delivered after 31 March 2011 will have to be filed online, for accounting periods ending after 31 March 2010. They must be filed in a specified data format (known as Inline XBRL or iXBRL) Companies will be able to file online either through commercially available software or by using HMRC’s own Corporation Tax software, which is aimed at companies with less complex tax affairs. HMRC plans to release their software towards the end of 2009 and are working with software developers on a number of commercial products which will be available from November 2009.

 

PAYE

If you have 50 or more employees, you must already send your Employer Annual Return and P45 and P46 forms online.

 

If you have fewer than 50 employees, Government proposals will require online filing of your Employer Annual Return from 19 May 2010 and online filing of P45 and P46 forms from 6 April 2011.

 

SELF ASSESSMENT

You can use Self Assessment Online to file a tax return, view statements of account and amend personal data.

 

The deadline for online returns is 31 January, as opposed to 31 October for paper tax returns, following the end of the tax year. If you want HMRC (where possible) to collect tax owed through your tax code you need to file by 30 December.

 

VAT

HMRC plans to phase out paper VAT returns from April 2010. After that date if your turnover is over £100,000 or if you are newly VAT registered you will have to submit your return online and pay VAT electronically.

 

The advantages of submitting your VAT returns online include; 1. You may complete your VAT return either online or through an XML channel, using a bespoke or commercial software package

2. You can tell HMRC about changes to your VAT registration details, business address or bank details.

 

Please be aware that if you send in your VAT return using the online VAT service, you must also make payment electronically using direct debit, BACS (Bankers Automated Clearing Services) Bank Giro Credit Transfer or CHAPS (Clearing House Automated Payment System).

 

Whichever method you use you will need to ensure that HMRC will receive payments from your bank or building society on time.

 

Remember that HMRC has set up its Business Payment Support Service to help any business which faces difficulty paying a tax bill.

 

If you think you will have a problem paying a tax bill (PAYE, VAT or CIS etc.), then call the HMRC helpline to talk about spreading your payments and avoiding additional penalties or surcharges. You will need to have your tax reference number to hand, details of the tax that you are or will have trouble paying and basic details of your business income and outgoings.

 

Tel: 0845 302 1435

(Mon-Fri 8.00am-8.00pm, Sat & Sun 8.00am-4.00pm).

 

If you want to know more about the Government proposals to make labour only subcontractors move from CIS to PAYE then please refer to the article by Liz Bridge in this issue.

 

Please contact the FMB Information Services Department for  further information on any of these issues.

 

Tel: 020 7242 7583

Email: information@fmb.org.uk

 

 

 

 

Information Sheets on Tax
TitleCategory
Construction Industry SchemeTax (Including CIS)