HM Revenue & Customs (HMRC) has continued in its attempts to improve its relationship with taxpayers by issuing a new taxpayers’ charter. It is called ‘Your Charter’ and was launched on 11 November 2009.

December’s Pre-Budget Report was a careful balancing act between assuring the markets that the Government was behaving responsibly and not upsetting too many voters in the run-up to the general election. The Chancellor, Alistair Darling, also felt he needed to avoid hampering the fragile economic recovery.

People with high incomes will cease to benefit from higher rate tax relief on pension contributions after 5 April 2011, and 40% relief will be restricted in the tax years 2009/10 and 2010/11.

Tax officials expect you to take ‘reasonable care’ in completing tax returns and other documents. This requirement is central to the new penalty rules HMRC introduced with effect from 1 April 2009.

If you are employing anyone from outside the European Economic Area (EEA), they must hold a British passport or a visa in order to work in the UK. UK work visas are granted under a points-based system consisting of five different tiers. However, only four are currently available because Tier 3 (low-skilled workers required to cover a temporary labour shortage) is suspended indefinitely.

Income tax at the rate of 50% will be payable on taxable income over £150,000 with effect from 6 April 2010. In another move to tax higher income taxpayers, their personal allowance of £6,475 will be taken away at the rate of 50p for every pound of income over £100,000, so that the allowance will disappear altogether when a taxpayer’s income reaches £112,950.

Did you know that since 6 April 2009, HMRC has operated daily subsistence scale rates for reimbursing expenditure incurred by employees working away from home?

The rates vary from £5 to £15, depending on the length and time of absence. HMRC has now confirmed that a daily rate of up to £15 to reimburse expenditure may be paid to employees from abroad on UK assignments of no more than two years. If you have such foreign employees, and pay them a fixed expense allowance within this limit, there will be no income tax or national insurance contribution consequences. The scale rate covers daily subsistence only, and not overnight accommodation.

Did you know that hiring a contractor may soon prove to have unexpected consequences?

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