HMRC have published draft guidance on landfill tax. Materials that can be classified as naturally occurring, and therefore taxable at the lower rate of £2.50, include:

“Group 1 of the 2011 Order allows the following waste materials to be lower rated: naturally occurring rock, clay, sand, gravel, sandstone, limestone, crushed stone china clay, construction stone, stone from the demolition of buildings or structures, slate, sub-soil, silt, and dredgings. Generally, these materials are formed by a natural process and are therefore naturally occurring.”

HMRC also states:

“Mechanical processing such as crushing or sorting does not in itself affect the 'naturally occurring' status. Therefore waste containing only naturally occurring group 1 materials that have been crushed or sorted are still 'naturally occurring'. However, chemical or thermal processing does affect the 'naturally occurring' status (but minerals that have been processed or prepared may qualify for the lower rate under Group 3 of the 2011 Order).”
 

Many parents who receive Child Benefit may be blissfully unaware that they are walking into a tax trap.

From 7 January 2013 Child Benefit payments are effectively means tested by the tax system. If either parent, or both parents, has income in excess of £50,000, then part or all of the Child Benefit you have received after 7 January 2013 may be clawed back by the new High Income Child Benefit Charge (HICBC).

For every £100 your income exceeds £50,000, 1% of the Child Benefit you have received will be clawed back. Accordingly, if your income is in excess of £60,000, the benefit you may have received will be fully recovered by the HICBC. 

Apparently, over 400,000 people have opted out of receiving Child Benefit and they will be unaffected by the HICBC – you cannot be asked to repay what you have never received!

However, if you continued to receive Child Benefit after 1 January 2013, and if either you or your partner has income in excess of £50,000, then the HICBC will apply. This has implications for high income earners who do not normally submit a self assessment tax return.

You only have until 5 October 2013 to register for self assessment for the year to 5 April 2013. On the return you are required to state the amount of Child Benefit you received for the period 1 January 2013 to 5 April 2013. When your return is submitted, HMRC will work out the amount of the HICBC you need to pay and this will be collected through the self assessment system.

If both parents have income in excess of £50,000 then the highest earner will need to register for self assessment. If you prefer to avoid the HICBC, and registration for self assessment, you could always elect not to receive Child Benefit in future tax years.
 

Although the recent G20 conference in St Petersburg failed to reach a consensus on the best way to deal with the Syria crisis, they did agree on a long term strategy to make it harder to hide money in tax havens. The ultimate goal, to force companies to pay tax in the countries where they make the profits, will take a number of years to organise as the necessary legislative changes required will no doubt take time.

The breakthrough was facilitated by the Chinese who finally agreed to align with the other members of the G20 by signing an agreement to share tax records.

The G20 accord states:

“Cross-border tax evasion and avoidance undermines our public finances and our peoples’ trust in the fairness of the tax system,” it read. “We endorse plans to address these problems and committed to take steps to change our rules to tackle tax avoidance, harmful practices, and aggressive tax planning.”

The G20 members have committed to begin the exchange of information by the end of 2015.

Readers will be aware that there a multitude of emails circulating on the internet purporting to be from HMRC. In almost all cases these will be some form of scam, attempting to gather personal information from you in exchange for the promise of a tax refund or similar inducement.

HMRC have confirmed, on numerous occasions, that they do not email taxpayers. They may telephone, send you a letter or knock on your door, but they will not send you an email.

However, if someone does turn up at your door, purporting to be from HMRC, how do you know the person is who they say they are? To deal with this HMRC have issued instructions: how to check a caller’s ID.

‘To provide a safeguard against bogus callers in these situations, HMRC has introduced a new Field Force Verification Helpline.
To access the helpline, customers [taxpayers] should follow these simple steps:

• Ask to see the Collector’s photo ID
• Make a note of the ID number on the photo ID
• Call 0300 200 3862
• Provide HMRC with the ID number you’ve noted

The operator will then be able to confirm to you whether or not your caller is genuinely an HMRC Collector.

Every customer visited, from now onwards, will be given a copy of a leaflet showing the rights and responsibilities by the Collector on arrival at the customer’s premises. This also includes the Field Force Verification Helpline number.’
 

There has been much press commentary recently regarding HMRC’s pursuit of football clubs who stand accused of paying certain “employees” below the NMW. This action is being taken due to complaints HMRC has received from ballboys and club mascots who receive no payment for their time.

 All employers are required to pay their employees at least the NMW rates. However, there are a number of persons not entitled to the minimum wage. They are:

• self-employed people
• company directors
• volunteers or voluntary workers
• workers on a government employment programme, e.g. the Work Programme
• family members of the employer living in the employer’s home
• non-family members living in the employer’s home who share in the work and leisure activities, are treated as one of the family and aren’t charged for meals or accommodation (e.g. au pairs)
• workers younger than school leaving age (usually 16)
• higher and further education students on a work placement up to 1 year
• workers on government pre-apprenticeships schemes
• people on the following European Union programmes: Leonardo da Vinci, Youth in Action, Erasmus, Comenius
• people working in a Jobcentre Plus Work trial for 6 weeks
• members of the armed forces
• share fishermen
• prisoners
• people living and working in a religious community

HMRC took enforcement action against more than 700 employers last year who were each fined up to £5,000 for non-compliance with the NMW rules. HMRC also secured back pay for over 26,000 employees, to top up their wages to the appropriate NMW rate.

The NMW rates are changing from 1 October 2013:

• the main adult rate (for workers 21 and over) will increase by 12p to £6.31 an hour
• the rate for 18-20 year olds will increase by 5p to £5.03 an hour
• the rate for 16-17 year olds will increase by 4p to £3.72 an hour
• the rate for apprentices will increase by 3p to £2.68 an hour

HMRC are advising certain charities to sign up to its new online Gift Aid system. The last “old style” forms will not be accepted after 30 September 2013.

According to HMRC, more than 19,000 charities have already signed up to Charities Online. Since the online process was launched 22 April 2013 almost 50% of Gift Aid payments are now being processed online.

Charities with no access to the internet can still claim using a paper based system, but must use a new form, ChR1, that can be ordered from the Charities Helpline on 0845 302 0203.

 Charities should allow 15 working days from the day they sign up, before making their first Gift Aid submission online.

 If you intend to make amusement machines available for play, you must register under the Machine Games Duty (MGD) regulations. MGD was introduced for existing operators from 1 February 2013. The published list of person’s who may be affected is anyone who:

• holds, or is required to hold, a licence or permit which allows them to provide gaming machines for play on premises
• owns, leases or occupies premises on which machine games may be played
• controls the operation of machines games
• controls admission to premises on which machine games may be played
• is responsible for the management of premises on which machine games may be played or provides goods or services to people who are admittedl.

Penalties may be applied if you don’t register for MGD, don’t make your MGD returns on time, don’t pay the MGD that you owe, and if you make a mistake on your return.

If you had dutiable machines available for play at 1 February 2013, or since that date, and you have still not registered to make MGD returns, you should apply as soon as possible in order to minimise any penalties payable.

The rates of MGD depend on the type of machine. There are two for MGD purposes:

• Type 1: all machines that do not qualify as Type 2 machines.
• Type 2: to qualify as a Type 2 machine it must be demonstrated that:

(a) the cost to play each dutiable machine game on the machine once does not exceed 10p, and

(b) the maximum cash prize for each dutiable machine game on the machine does not exceed £8.

The standard rate of MGD (20%) applies to Type 1 machines, and the reduced rate of 5% to Type 2 machines.

 1 September 2013 – Due date for Corporation Tax due for the year ended 30 November 2012.

 19 September 2013 – PAYE and NIC deductions due for month ended 5 September 2013. (If you pay your tax electronically the due date is 22 September 2013.)

 19 September 2013 – Filing deadline for the CIS300 monthly return for the month ended 5 September 2013.

 19 September 2013 – CIS tax deducted for the month ended 5 September 2013 is payable by today.

 1 October 2013 – Due date for Corporation Tax due for the year ended 31 December 2012.

 19 October 2013 – PAYE and NIC deductions due for month ended 5 October 2013. (If you pay your tax electronically the due date is 22 October 2013.)

 19 October 2013 – Filing deadline for the CIS300 monthly return for the month ended 5 October 2013.

 19 October 2013 – CIS tax deducted for the month ended 5 October 2013 is payable by today.

 31 October 2013 – Latest date you can file a paper copy of your 2013 Self Assessment tax return.

Businesses should be aware that HMRC polices the National Minimum Wage (NMW) legislation. Not only do they fine employers who breach the regulations, they also enforce the payment of underpaid wages to staff.

HMRC have recently released figured confirming that 26,000 workers were paid less than the minimum wage.

• 708 employers had been fined with charges of up to £5,000, after it reviewed 1,693 complaints in 2012-13, and
• affected workers were given an average of £300 each in back-pay.

Investigated cases included the illegal use of interns, unpaid extra hours and workers being forced to buy company clothes as uniform. The NMW is currently £6.19 an hour for workers aged 21 or over.

From 1 October 2013 the NMW rates are:

• 21 and over: £6.31 per hour
• 18 to 20: £5.03 per hour
• Under 18: £3.72 per hour
• Apprentices under 19 years or in the first year of their apprenticeship: £2.68 per hour.

If you are unsure if your working practices comply with the NMW legislation you should take professional advice.

In a previously unreported settlement with the UK Government, Vodaphone appears to have made a large payment to HMRC. The additional taxes related to the tax returns of an Irish subsidiary. Although the overall amount settled was not disclosed Vodaphone were required to reclaim approximately £57m from the Irish Government in tax that should have been paid in the UK.

For a four year period Vodaphone had used the Irish subsidiary to collect royalties from most countries and to remit more than one billion Euros of dividends to the low tax jurisdiction of Luxemburg. Vodaphone are reported as saying:

“In all respects and at every point, Vodaphone has conducted itself with the highest integrity and in full compliance with the law.

The settlement with HMRC related to a number of technical factors regarding inter-group transfer pricing arrangements.”

HMRC added:

“We do not comment on the affairs of individuals or companies, but we do ensure that multinationals pay the tax which is due under the law.”