Proposals for reform of tax treatment of termination payments

The government has published a revised proposal, along with draft legislation, to reform the tax treatment of termination payments. This follows a consultation which opened in July last year.
The proposal will not restrict the present tax exemption to termination payments made in a reduundancy situation, as had been suggested. The tax-free threshold will be maintained at the current level (£30,000) and most of the current reliefs will also stay.
Termination payments above the threshold, which will be liable to income tax as at present, will also be liable to employer's National Insurance Contributions.
The draft legislation will retain the distinction between contractual and non-contractual payments, but any payment that the employee would have received had they worked their contractual notice period will be subject to income tax and NICs. All payments in lieu of notice will also be subject to income tax and NICs, regardless of how the settlement agreement characterises the payments.
Reliefs which apply to income tax on payments over £30,000 will be retained, with some modifications.
The result of the changes in the law will be a clash between the legislation and what the contract of employment might say. Employers will, in effect, have to consider what the employee would have been entitled to under the contract had they worked their full contractual notice period - but without regard to the terminationitself, or to any provisions restricting entitlement in the event of a termination.
Interested parties can comment until 5 October: the consultation document is here. The changes will come into operation in April 2018.

Farmer jailed over red diesel fraud in Lincolnshire: UK taken to court by EU over red diesel for yachts

BBC News  reports (12 July) that a Lincolnshire farmer has been jailed for a rather large red diesel fraud, and at about the same time (15 July) the Commission started proceedings against the UK for its rules that permit red diesel to be used in pleasure craft (reported here on the Tax News website and bizarrely on the Voice of Russia website here: if that is too much for you, try the Commission's website, where you can find the press release here).

RAC urges government crackdown on untaxed foreign vehicles

Untaxed foreign vehicles are costing the UK Treasury some £15 million in unpaid tax, the RAC says (according to this story from BBC News). Vehicles brought into the UK have to be registered with DVLA after six months, taxed and insured, and if of the right age tested too. They are recorded at border controls but it seems that DVLA has no mechanism for following up when their allotted time expires.

Taxing use of company vans

HMRC is reported to be increasing its monitoring of the use of company vans amid concerns that insufficient tax and NI contributions are being collected. More information can be found here on chartered accountants Dains LLP's website. Using a company van for private purposes should be charged to tax as a benefit in kind at £3,000 a year. The rules that apply to vans are not as strict as those for cars, an in particular private use of vans can be considered 'insignificant' and therefore tax-free. What is "insignificant" is like the length of a piece of string - but if private use isn't even governed by a policy, or being monitored, it's even more meaningless. Back in September HMRC sent questionnaires to a number of employers covering these issues and other aspects of company van use. Some sizeable tax (and NI) bills might be the result.