Tax

HMRC concedes defeat. Following its defeat at the Upper Tribunal (UT) ( yr.23, iss.21, pg.5 , see The next step ), HMRC has issued a statement which seems to lay to rest its long-running dispute with employers who pay their employees’ car allowances . The statement accepts the UT’s ruling that the allowances can be disregarded as earnings when calculating NI contributions. ...

The Autumn Statement announced headline-grabbing NI cuts for both employees and the self-employed. What were the main changes and, crucially, when do they happen?

On advice from your accountant your businesses are owned by separate companies within a group. As a director of each company what’s the most tax and NI-efficient way to be paid earnings from them?

Upper tribunal ruling. We recently told you about the landmark ruling by the Upper Tribunal (UT) in Laing O’Rourke Services Ltd v HMRC and Willmott Dixon Holdings Ltd v HMRC 2023 ( yr.23 iss.21 pg.5 , see The next step ). The result meant that the companies were entitled to claim a refund of Class NI contributions paid on round sum car allowances they paid to their employees, to the extent that the individuals concerned used their privately owned vehicles for business journeys. The good news is that HMRC will now accept similar claims for refunds from other employers. No further appeal. By confirming that it won’t appeal against the UT’s decision HMRC has opened the door to NI refunds going back six years. We weren’t surprised by the response from HMRC because the UT’s judgment was exhaustive and well considered. Employers can now make claims for the current and previous six tax years (see The next step ). However, we have our suspicions that HMRC may ask the government to approve changes to the PAYE regulations that will in effect prevent such refunds for later years. If that happens we’ll let you know. The next step For a previous article about the UT ruling regarding NI on car allowances and to calculate NI refunds, visit https://www.tips-and-advice.co.uk , Download Zone, year 23 issue 22. ...

Two businesses paid their employees’ car allowances. They said no NI was payable on these to the extent the cars were used for business. HMRC argued the payments were just earnings and so liable to NI. How did the Upper Tribunal (UT) rule?

There are good reasons for keeping a close eye on your NI contributions. For example, they are key to your entitlement to the state pension and other benefits. How can you identify and check if you’ve over or underpaid contributions?