Legislation in the Finance Bill 2010 will introduce powers for HM Revenue & Customs (HMRC) to require a financial security from employers who have a history of serious non compliance in terms of paying late or not paying their PAYE Income Tax. The detail will be set out in regulations, which will be published for consultation before they are made. The measure will affect those who are determined not to pay and will not affect those who need time to pay and who make payment arrangements with HMRC.
This proposal introduces the new CO2 grams per kilometre (g/km) emissions limits which set the appropriate percentage for computing Company Car Tax benefit. These support the Government's commitments on reducing greenhouse gas emissions. The current graduated table of Company Car Tax bands will be extended down to a new 10 per cent band, and all CO2 emissions thresholds will be moved down by 5 g/km on 6 April 2012 so that the 10 per cent band will apply to company cars with CO2 emissions up to 99 g/km.
This measure introduces two changes effective for five years from 6 April 2010 to 5 April 2015 to the chargeable benefit in kind on company cars and vans:
A relaxation will be made to the conditions applicable to childcare voucher and directly contracted childcare schemes delivered through salary sacrifice arrangements, for those employees at or near the national minimum wage. The amendments will have retrospective effect for the tax year 2005-06 and subsequent tax years.
As announced in the 2009 Pre-Budget Report (PBR), from 6 April 2011 the tax exemption that can apply to the benefit of free or subsidised meals provided by employers will be restricted in certain circumstances. This will be for canteen salary sacrifice and flexible benefit arrangements in which the employee has a structured contractual entitlement to the benefit of canteen meals instead of cash salary. The existing benefits rules will then be applied to meals that become taxable and liable to NICs as a result of this change.
The following amounts announced in PBR 2009 have been confirmed in Budget 2010.
For 2010-11, with just two exceptions, all NICs rates and thresholds are unchanged from the current year 2009-10. The two exceptions are:
For 2011-12, in addition to the 0.5 per cent increases already announced at PBR 2008:
The Government remains open to proposals for further simplification of the rules governing the commutation of small pension pots provided the simplification would not:
In particular the Government is interested in proposals about:
Legislation will be introduced in Finance Bill 2010 to stop companies using tax-advantaged Company Share Option Plans (CSOP) for avoidance by prohibiting the grant to employees of CSOP options over shares in a company which is under the control of a listed company. The measure will have effect in relation to options granted over shares in a company which is under the control of a listed company on or after 24 March 2010.
The Government will be taking action to prevent attempts to avoid tax and NICs through the use of Employee Benefit Trusts and other arrangements to disguise payments of remuneration and intends to introduce anti-avoidance legislation to take effect from 6 April 2011.
There will be a review and consultation, during 2010, on taxation of geared growth arrangements used in connection with employment related securities, to ensure employment income is subject to correct tax and NICs.
Changes are being introduced in Finance Bill 2010 to combat abuse of the Corporation Tax deduction provision for SIPs, where companies pay money to SIP trustees to buy shares from existing shareholders for use in the SIP, but no shares with any real value are transferred to employees under the SIP. The changes also strengthen the provisions which allow HMRC to withdraw approval of a SIP in cases where alterations to share capital or changes in rights attaching to the shares materially affect the value of shares held by the plan trustees.
