NIC Chapters 25-27 Flashcards
What are taxable termination payments >30k subject to?
Class 1a not class 1 primary and secondary
Settlement of EE’S personal liabilities?
Subject to class 1 prim and sec BUT NOT PAYE (pecuniary liabilities)
Are vouchers earnings?
Yes
Are mileage payments earnings?
Yes
What is the current pension age?
66 (ER NI STILL MUST BE PAID!!)
What do directors have?
An annual earnings period
ER NI for EE’S under the age of 21 and apprentices under the age of 25?
NIC contributions are 0% between secondary threshold and the upper secondary threshold
Armed forces veteran?
EE under 21/apprentices rules also apply for 12 month period starting with first day in civilian job.
Freeport tax site?
ER NI charged at 0% up to an including freeport upper secondary threshold (see tax tables!!). For the first 3 yrs of employment only.
Freeport tax site rules?
New EE starting after 6 april 2022, spends at least 60% of their time working at the freeport site. Cannot have worked for their ER or a connected ER for 2 years prior.
Who is the annual maxima contribution for?
EE’S with two jobs
how to find the annual maxima calc in the leg?
Go to book 3 and type in annual maxima
What can a taxpayer apply for if they know they will exceed the annual amount?
A deferment (if they know they will be due a refund). But they will continue to pay class 1 nic’s at 3.25% on earnings in excess of prim threshold.
How many weeks was the PT threshold lower for?
13 weeks!
why do directors have an annual earning period?
to prevent them from manipulating their earnings for NIC purposes
if the director chooses to have in monthly?
at the end of the year this will have to be compared to what it wouldve been if annual- so would still end up paying annually
if director is appointed or resigns during the tax year?
if appointed they will have a pro rate annual earnings period, if resign it will not be pro rate
when may a director be liable to a companys unpaid NICs?
if due to fraud or negligence
is a director bonus taxable if held on account within the company (but available to the director)?
yes
if a directors account becomes overdrawn due to a withdrawal made in anticipation of earnings?
class 1 NICs are due on the overdrawn amount
if an ER enters into a contract with a third party…
Benefit subject to class 1a NIC
if a benefit is provided partly for personal and partly for business reasons…
the full amount is subject to class 1a even if the EE can claim a deduction for the business bit for tax
Calc to get to to tax bit of a PSA?
tax rate/(100-tax rate)
What are the 3 possible things a benefit can be to be put on a PSA?
Minor, irregular, impractical
If incidental expenses are greater than the limits?
FULLY taxable-not just the amount in excess!
when does the 24 month rule not need to be considered?
When there is not a period of ‘continuous work’ i.e when ee does not work somewhere more than 40% of the time.
learnings from lucas v cattell?
HMRC will not except that any part of line rental costs are allowable business expenses
