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The most important new tax changes for businesses during 2015

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National insurance abolished for under 21s

An initiative that has been longed for since before the coalition came into power, from now on businesses will no longer have to pay Class 1 secondary National Insurance contributions on earnings up to the Upper Secondary Threshold (UST) for those employees.

Instead, each will now be required to choose one of seven new National Insurance categories when assessing their secondary contributions. The government has said it’s the employer’s responsibility to ensure the correct category letter has been applied based on the age and circumstances of the employee.

It is hoped that this initiative will help chip away at youth unemployment and encourage small and growing businesses to take on additional staff without having to foot a large initial cost.

Change to share scheme rules for expatriate employees

From now on, the way expatriate employees are subject to UK income tax on restricted shares and share options granted to them under an employer share arrangement will be different.

Previously expatriate staff granted share options or restricted shares as non-UK residents were not subject to UK income tax when these shares were exercised or the share vested. Not any more.

Now any exercising of vesting will restful in a British income tax charge, and the fee will apply to all transactions made after 6 April 2015. As a loophole, employees will be able to pro-rate any UK taxable gain to exclude that part of the gain relating to duties performed outside the UK during a period of non-residence.

What you need to know about new tax evasion law changes


Intermediaries must report non-PAYE employees to HMRC quarterly

This new law means that intermediaries (anyone making arrangements for an individual working for a third party) are required to send reports to HMRC about agency workers where they do not operate PAYE.

Counting for intermediaries such as agencies, organisations must return details of all workers placed with clients where they do not operate PAYE on the workers’ payments.

The new rules were introduced as a result of increasing abuse of the use of intermediary status, particularly through the use of false self-employment and supplying UK workers from an offshore location.

Construction Industry Scheme (CIS)

To minimise tax evasion in the sector, under the Construction Industry Scheme (CIS), contractors must now deduct money from a subcontractor’s payments and pass it to HM Revenue and Customs (HMRC).

The deductions count as advance payments towards the subcontractor’s tax and National Insurance.

Contractors must register for the scheme. Subcontractors don’t have to register, but deductions are taken from their payments at a higher rate if they’re not registered.

The ICAEW has stated that HMRC will be operating an “extremely tough” penalty regime for those within the CIS scheme.

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