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HMRC shines their spotlight on different situations, often dependent on announcements made at the Budget or via potential changes that are tabled during the Statement. Many are widely reported on at the time, but often take a back seat until the time draws closer.

At the 2018 Budget, the Government advised that from April 2020, new IR35 rules would come into place for off-payroll workers and their employers. With a little over 6 months to go and further confirmation of what this new legislation means, employees and employers alike need to ready themselves – it’s been predicted that 5.5m businesses and 170,000 contractors could be affected.

Governing bodies on both sides have reacted defensively for their members but however short-term this tax vision may be, it will come into practice quickly and preparation is going to be key. We’ve outlined some things to note for medium and large sized businesses [click here]. Individuals operating via a limited company otherwise known as a private services company (PSC), we’ll talk about next month.

Alongside this, it’s been noted that HMRC are also on the look out for correct staff entertaining reports. The deadline (5 July) has just passed and we’ve seen letters to companies where staff entertainment costs have been included in previous company accounts, where there’s no PAYE Settlement Agreement (PSA) in place, and where staff entertainment hasn’t been reported on P11Ds.

Getting this wrong can mean HRMC can look to recover the past 4 years of tax and 6 years of NIC, along with penalties and interest on anything unpaid. We recommend that you make a voluntary disclosure if you discover any mistake made; this could help avoid penalties if unprompted.

Remember, you do have an exception for annual events such as Christmas or summer parties as long as the annual total does not exceed £150 per head and it is open to all your employees. Some silver lining!