CPA Bulletin

www.cpa.uk.net CPA Bulletin > May 2018 39 Legal: 2 Fixed Penalties for Historical Offences From the 1st February, new powers for the Driver and Vehicle Standards Agency (DVSA) came into force. These focused on the issuing of fixed penalties for offences detected at the roadside, which had taken place in the previous 28 days. From the 5th March, DVSA began actively enforcing these new powers. Those drivers caught will face a greater possible maximum penalty of £1500. DVSA has indicated it will pursue up to a maximum of five offences with a maximum of £300 per offence. Owners who have an Operator’s (O) licence must be prepared for the possibility that their drivers may receive more penalties than before. In addition, any fixed penalties issued must be reported to the Traffic Commissioner. This may result in a Traffic Commissioner’s hearing, which could affect the company’s current O licence. VAT on Red Diesel A non-CPA member company had been visited by Her Majesty’s Revenue and Customs (HMRC) a year ago, to investigate his method of invoicing customers who had only been supplied Red Diesel. It would appear that he had been charging the incorrect rate of VAT. He had charged his customers 5% VAT, but HMRC said it should have been 20%. (Supplies over 2300 litres should be charged at 20% rather than the 5% that applies to smaller supplies). To provide clarity on this, the Government has produced a document - VAT Notice 701/19: fuel and power. Please go to the link below to read the document. Section 6 focuses on ‘Oils’, and covers the VAT element in the supply of red diesel. www.gov.uk/government/publications/vat-notice-70119-fuel- and-power/vat-notice-70119-fuel-and-power From the 6th April 2018, the minimum level of contribution towards an employee’s pension will increase. The amount that you must contribute to the pension scheme will be determined by the scheme’s rules. However, if you’re using the scheme for automatic enrolment there are minimum contributions you must pay. These are shown in the table below. Date Employer Minimum Total Minimum Contribution Contribution Up until 5th April 2018 1% 2% (including 1% staff contribution From 6th April 2018 2% 5% (including 3% to 5th April 2019 staff contribution 6th April 2019 3% 8% including 5% onwards staff contribution Minimum contributions are being introduced gradually over time. You will usually pay pension scheme contributions either as a fixed amount or based on a percentage of earnings. If they’re expressed as a percentage you will need to confirm salaries with your pension provider as and when necessary. You also need to decide what elements of staff pay are used to calculate pension contributions, subject to any overriding legislative requirements, such as in relation to automatic enrolment. You may decide that only basic pay is pensionable but not bonus or overtime payments. If your system is automated, your payroll system or provider needs to calculate contributions and make the correct deductions from staff pay. You should also make sure your payroll system is compatible with the chosen pension scheme. If you’re unsure, check your payroll software or contact your payroll provider or pension provider. Pension Contribution Increases Since the 30th September 2017, it has been a criminal offence for a business to have an employee or other ‘associated person’ who facilitates tax evasion under the Criminal Finances Act 2017. There are two main offences under this Act. The first offence applies to all businesses, wherever located, in respect of the facilitation of UK tax evasion. The second offence applies to businesses with a UK connection in respect of the facilitation of non-UK tax evasion. The offences apply to both companies and partnerships. They effectively make a business vicariously liable for the criminal acts of its employees and other persons ‘associated’ with it, even if the senior management of the business was not involved or aware of what was going on. ‘Associated persons’ are employees, agents and other persons who perform services for or on behalf of the business, such as contractors, suppliers, agents and intermediaries. There are two stages for the corporate offences to apply: there must have been criminal tax evasion by someone other than the business concerned; and, • A person/entity who is associated with the business must have criminally facilitated the tax evasion whilst performing services for that business. Businesses will have a defence if they can prove that they had reasonable prevention procedures in place to prevent the facilitation of tax evasion, or that it was not reasonable in the circumstances to expect there to be procedures in place. For more information on this subject, you should discuss this with your accountants or auditors. Tax Corporate Criminal Offence