EMPLOYMENT AGENCIES

From 6 April 2014 if a worker supplied by an employment agency personally carries out the work, or is involved in the provision of the services, the payment from the engager to the worker will have to be taxed under PAYE with class 1 NICs deducted. Any apparent  right of substitution in the worker's contract will not prevent PAYE and NICs being due at the employed rates.

If you have any doubts about the contracts you are using either as a worker or an employer, our tax experts can help check the tax implications for you.

DISGUISED EMPLOYMENT

The Government is cracking down on situations in which workers are treated as self-employed for tax purposes, and hence pay low amounts of NICs, but from the outside they appear to act as employees. The following changes in the tax law are proposed to block the use of 'self-employed' workers working through LLPs or who are hired-out through employment agencies.

LLPs

All individual members of LLPs are currently taxed as self-employed persons, even if they receive a regular 'salary'. This is the default position of the law and nothing is being 'fiddled' to put workers in this position. However, HMRC believe this rule is being abused, and the workers involved may not realise that they are technically self-employed.

From 6 April 2014 salaried members of LLPs will be treated as employees of the LLP if  all of the following conditions are met:

- the member works for LLP and at least 80% of the pay he receives from
the LLP is disguised salary;
- where the member has contributed any capital to the LLP, that capital
amounts to less than 25% of the member's 'disguised salary' for the
year; and
- the member is not involved significantly in the management of the LLP.

The Government has not yet defined term 'disguised salary'. If you have salaried members in your LLP we need to talk about these tax changes.

CAPITAL ALLOWANCES ON FIXTURES

There are a number of capital allowance claims firms targeting businesses which have recently bought or sold commercial property. These 'experts' suggest the business needs to pay for a special survey to claim all the capital allowances they are entitled to, and this must be done quickly in order to claim all the allowances due.

In most cases a special survey is not needed. However, it is true that for commercial building sales made since 1 April 2012 the vendor and purchaser must take formal steps (usually an election) to agree the value of fixtures including in that building. This value must be agreed within two years of the transfer of ownership, if agreement cannot be reached the two parties can go to the tax tribunal where the judge will make a decision.

The agreed value for fixtures is brought into the capital allowance pool as the disposal value for the vendor and is added to the capital allowance pool for the purchaser.

There is another change on its way for transfers of commercial buildings from April 2014. The value of fixtures and fittings must be claimed as part of a capital allowances pool by the vendor, in an accounting period prior to the sale of the building. If the vendor does not make this claim, the purchaser is barred from claiming any capital allowances for the fixtures it acquires.

We can help you make the necessary elections and claims for capital allowances.

TIMING YOUR DISPOSALS FOR CGT

A timing advantage of one year on the payment of tax can be achieved simply by delaying sales beyond 5 April in the tax year, so that you have use of the funds for another year and can earn interest on this money for a year longer before having to pay the tax to HMRC.

However, this needs to be balanced against a possible loss of the annual exemption if it has not been fully utilised for the earlier year.