• At-a-glance
• Administration Of Tax
• Personal Taxation
• Employment Taxation
• Business Tax
• Corporation Tax
• Capital Gains Tax
• Savings and Investments
  
• Trusts
  
• Anti-Avoidance
  
• Stamp Taxes
• Value Added Tax
• Insurance Premium Tax
• Environmental Taxes
• Excise Duties
• Miscellaneous

Employment Taxation

Expenses Paid to MPs

Amendments are to be made to the income tax and NIC provisions dealing with MPs’ expenses. The amendments are required following the introduction of a new scheme for expenses developed by the Independent Parliamentary Standards Authority and take effect retrospectively from 7 May 2010. The amendments deal with additional accommodation expenditure, the costs of visits to EU institutions and other parliaments, travel expenses and costs of evening meals when the House of Commons is sitting late.

Seafarers’ Earnings Deduction: EU and EEA Residents

The seafarers’ earnings deduction will be extended to EU and EEA-resident seafarers with effect from 6 April 2011. Seafarers’ earnings deduction (SED) can provide 100% UK tax relief for the earnings from carrying out duties as a seafarer wholly or partly outside the UK, during an eligible period. The condition that the claimant must be ordinarily resident in the UK to qualify for SED will be extended so that seafarers who are EU or EEA residents can claim the deduction on their earnings as a seafarer which are liable to UK income tax.

Regional Employer NICs Holiday for New Businesses

The Government will introduce a scheme to help new businesses in targeted areas of the UK. During a 3-year qualifying period new businesses starting up in these areas will not have to pay the first £5,000 of employers Class 1 NICs due in the first 12 months of employment in respect of each of the first 10 employees hired in the first year of business, giving a potential saving of £50,000.

The areas are: Scotland; Wales; Northern Ireland; the North East; Yorkshire and the Humber; the North West; the East Midlands; the West Midlands; and the South West.

Subject to meeting the necessary legal requirements the scheme is intended to start no later than 6 September 2010. Any new businesses set up from 22 June 2010 may benefit from the scheme. They will be liable to pay employers NICs in the period before the start of the scheme but will receive an NIC holiday of equal duration once the scheme starts. Only businesses which undertake a sufficient degree of new economic activity will benefit. Full details of the scheme and who is eligible to participate will be made available shortly. Some employees such as those operating under companies caught by the IR35 rules or those engaged through managed service companies will not be eligible. Some business sectors will be excluded, including the coal sector, and restrictions will be applied to the agriculture and fisheries sectors. Individuals employing staff, for example for personal services, will also be excluded.