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HMRC Now Using Faster Payments Service

Posted by: edwinsmith on December 22nd, 2011

HM Revenue & Customs (HMRC) can now accept payments made using the Faster Payments Service. This will allow taxpayers to make faster electronic payments, typically via internet or telephone banking, enabling them to be processed on the same or next day.

Taxpayers should contact their bank or building society before making a payment to confirm:

  • the services available
  • whether there are any single transaction or daily limits on the amount that can be paid
  • their latest cut off times for making a payment

When making a payment to HMRC please make sure you always use the correct bank account details and reference number. This will ensure that the payment is received, and will help to avoid incurring a penalty, interest or surcharge for late payment.

You can find further information by following the links below.

Faster Payments

How to make a payment to HMRC

HMRC bank accounts

Filed under: PAYE, Tax, VAT

VAT returns on-line for all VAT-registered businesses

Posted by: edwinsmith on December 19th, 2011

From 1 April 2012, all VAT-registered businesses must send their VAT returns online and pay their VAT electronically. Currently, only newly-registered businesses, and those with turnovers of more than £100,000, have to file and pay their VAT online. The new rules will cover VAT returns filed for accounting periods beginning on or after 1 April 2012.
To file your VAT return online, you'll need to register for HMRC Online services. Further help and advice is available from the HMRC website or contact us.

Filed under: VAT

[Archive] Tax on Christmas Gifts and Parties

Posted by: edwinsmith on December 12th, 2011

There are various tax implications to consider on gifts and parties that you may be providing to your employees at this time of year. The points detailed below are a general overview and cover the most common situations that arise.

Cash gifts or bonuses - These are treated as normal pay and subject to PAYE and Class 1 National Insurance contributions (NIC) in the normal way. The payment should be put through the payroll. This also applies to any vouchers you give that can be exchanged for cash (see below for PSA arrangements for small cash gifts).

Gifts to employees - Gifts that can be considered trivial benefits such as a turkey, ordinary bottle of wine or box of chocolates will not need to be declared on form P11d. There is no set monetary limit below which benefits are deemed to be trivial but common sense and judgement needs to be applied in assessing these items. For the purposes of gifts then probably any amount less than £20 per employee would be considered trivial.

Any gifts of a higher value (and classed as non trivial) such as cases of wine/hampers would be subject to tax and NIC and declarable either as a benefit on form P11d or the tax/NIC could be paid on these gifts by arranging a PAYE settlement agreement (PSA).

If declared on P9d or P11d (directors and employees earning over £8,500 pa) forms then non trivial gifts are subject to tax (for the employee) and Class 1a NIC is payable by the employer on items declared on the P11d.

A PSA is voluntary arrangement that on the part of the employer made with HMRC to account for tax/NIC for minor, irregular or impractical items subject to tax/NIC.

If a PSA is arranged then the employer effectively pays the tax due and relieves the employee of any tax liability on the gift. Although there is the extra cost of the tax/NIC a PSA cuts down on the paperwork and record keeping.

Money’s worth benefits such as Store gift vouchers (exchangeable for goods) cannot be treated as trivial benefits. For practical purposes small cash and money’s worth benefits can be included in a PSA. If not dealt with on PSA then Store gift vouchers should be declared on form P9d or form P11d (if employee earns over £8,500) to account for tax. For NICs the cost of providing the vouchers should go through the payroll at the time given to employee.

Christmas parties (and summer events) - Tax and NICs are not due on any annual function if the cost to you is less than £150 per head (including employees partners). The cost per head is the total cost of putting on the function – accommodation, food, drink etc divided by the total number of guests including the non-employees.

If the cost per head is greater than £150 then the whole amount would be subject to tax and Class 1a NICs and should be declared on form P11d in section N e.g. if the cost of an event is £175 per head the employee (with a partner) is taxed on a benefit of £350.

Please contact us for any further advice.

Filed under: PAYE, Tax

Revised advisory fuel rates 1 December 2011

Posted by: edwinsmith on December 5th, 2011

H.M. Revenue and Customs (HMRC) have published the latest advisory fuel rates relating to mileage payments for business travel in company cars. These are as follows: 

Engine size Petrol LPG
1400cc or less 15p 10p
1401cc to 2000cc 18p 12p
Over 2000cc 26p 18p


Engine size Diesel
1600cc or less 12p
1401cc to 2000cc 15p
Over 2000cc 18p

The only change this quarter is the reduction of 1p per mile in LPG for engines sizes of 1400cc or less.

The new rates will be effective from 1 December 2011, however for the first month employers may continue to use the previously published rates if they choose to.

These rates will be reviewed again in February 2012 and any changes made will be effective from 1 March 2012.  The revised fuel rates will be published on the fuel rates page on the HMRC website when they are released.

Advisory fuel rates can be used to calculate the following:

  • Reimbursement to employees of fuel used for business travel in a company car
  • Repayment by employees of fuel used for personal travel in a company car
  • Allowable input VAT on business mileage claims

A more detailed explanation of the use of these rates is on the HMRC website.

The rates applying for earlier periods are also on the HMRC website.

If you have any questions regarding the use of advisory fuel rates or mileage payments please contact us.

Filed under: PAYE, VAT