From 6 April 2012, the company car fuel benefit factor increases from £18,800 to £20,200, and subsequently by a further 2% above the RPI in 2013/14.
From 6 April 2014, the appropriate percentage (AP) used in calculating company car benefits will increase by 1% on cars emitting over 75g/km CO2. The AP maximum of 35% will increase to 37% in both 2015/16 and 2016/17.
From 6 April 2015, the existing AP of 0% applying to zero and ultra low carbon emission company cars will become 13%, and increased by a further 2% from 2016/17.
From 6 April 2016, the 3% diesel supplement will be abolished.
The exclusion of security enhancements (armour, bullet resistant glass, etc) as accessories has been announced previously.
Vans
The van fuel benefit charge multiplier will remain frozen at £550 and will increase by the RPI in 2013/2014.
The van benefit charge will remain frozen at £3,000. In addition, the five-year exemption for zero carbon emission vans will expire in April 2015.
EMI share option gains are subject to capital gains tax rather than income tax and NIC. The change to the limit on the value of EMI options will be enacted following State Aid approval.
The extension of entrepreneurs’ relief to EMI options is intended to be enacted under Finance Bill 2013 and will effect options exercised on or after 6 April 2012.
The Government will consult on ways to enable EMI options to be granted to academics employed by a qualifying company.
We welcome the increase in the value of EMI options and the scope of companies able to offer them, which is intended to allow small and medium-sized companies to attract and retain high-calibre employees.
SP1/09 allows an administrative easement for employees who are resident but not ordinarily resident in the UK, who are assessed on the remittance basis of taxation and who use an offshore account holding income or gains from an employment.
Under SP1/09 HMRC accepts that certain individuals who are resident but not ordinarily resident in the United Kingdom do not have to apply complex ‘mixed fund’ rules to determine the kind and amount of income or gains remitted to the UK from an offshore account on a real time basis. Such individuals can instead continue to calculate their tax liability by reference to the total amount transferred out of an offshore bank account containing mixed funds during the tax year as a whole, rather than by reference to individual transfers.
Putting this Statement of Practice onto a statutory basis is, of course, welcome news giving legislative certainty in a complex area. The above links with the Budget announcement to abolish ordinary residence for tax purposes, and put overseas workday relief onto a statutory footing from 6 April 2013.
The measures will include strengthening specialist compliance teams, simplifying the way IR35 is administered and, subject to consultation, requiring office holders/controlling persons integral to the running of an organisation to have PAYE and NIC deducted at source by engaging organisations.
The operation of IR35 has been on HMRC’s agenda for a number of years. This announcement focuses attention on persons who are integral to the running of an organisation and who have a degree of control over the organisation.
Currently, arrangements can be made whereby employers may pay pension contributions into an employee's family member’s pension as part of the employee’s remuneration package. Such contributions are currently tax- and NIC-free and would count towards the family member’s lifetime and annual allowance as opposed to the employee’s. Legislation will be introduced in the Finance Bill 2013 to prevent such tax and NIC advantages.
These changes will remove any income tax and NIC advantages from this form of planning.
