Tax News Daily
The latest tax news from around the world, summarised and tagged for tax professionals. Updated twice daily.
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The 1099 Rules Are Changing, But the Compliance Problem Remains
The article addresses evolving IRS 1099 reporting rules and the persistent compliance challenges businesses and tax professionals face. It examines changes to information reporting thresholds and requirements — particularly around gig economy and third-party payment platforms — while highlighting that regulatory shifts alone do not resolve underlying compliance complexity. Issues such as mismatched TINs, backup withholding obligations, and software limitations continue to create friction. The piece underscores the need for better tax technology and process improvements to keep pace with changing 1099 mandates and reduce filing errors and penalties for payers.
Guidance: Employment intermediaries: service availability and issues
HMRC provides guidance on service availability and known issues affecting the Employment Intermediaries reporting service. Employment intermediaries, such as staffing agencies and umbrella companies, are required to report details of workers they place with clients where PAYE is not operated. This guidance helps intermediaries and their agents stay informed of system outages or technical problems that may affect their ability to submit mandatory returns. Timely reporting is a payroll tax compliance obligation, and awareness of service disruptions is important to avoid penalties for late or failed submissions.
Employees working abroad
UK government guidance on tax and payroll obligations for employers with staff working abroad. Covers PAYE responsibilities, National Insurance contributions, and the implications of employees being based overseas. Addresses when UK payroll tax rules apply, potential double taxation issues, and employer compliance requirements when workers relocate internationally. Relevant for UK businesses managing cross-border workforces and needing to understand their obligations regarding income tax withholding and social security contributions for expatriate or remote employees working outside the United Kingdom.
Guidance: Reciprocal agreements
This UK government guidance provides an overview of the UK's reciprocal social security agreements with various countries. These agreements determine which country's social security system applies to workers moving between the UK and treaty partner nations, preventing dual contributions and protecting benefit entitlements. The guidance is relevant to employers and employees engaged in international assignments, as it directly affects National Insurance and payroll tax obligations. It serves as a reference point for understanding how bilateral agreements interact with UK domestic social security and payroll compliance rules.
Guidance: CWG2: further guide to PAYE and National Insurance contributions
CWG2 is HMRC's comprehensive technical guide for employers on operating PAYE and calculating National Insurance contributions in the UK. It covers complex payroll scenarios including benefits in kind, irregular payments, termination payments, directors' NI, and special employment arrangements. The guide is an authoritative reference for payroll professionals, HR teams, and software developers ensuring accurate tax and NI deductions. Regular updates reflect legislative changes, making it essential for ongoing payroll compliance. It directly addresses both income tax withholding under PAYE and employer/employee National Insurance contribution obligations.
Apply for a certificate of coverage to pay UK National Insurance whilst working in a country with a social security agreement (CA9107)
This UK government guidance explains how individuals working abroad in countries that have a social security agreement with the UK can apply for a certificate of coverage (CA9107). The certificate confirms the worker continues paying UK National Insurance contributions rather than the host country's social security contributions, avoiding double contributions. This is directly relevant to payroll tax and social security obligations for internationally mobile employees and their employers, covering the procedural steps to obtain the certificate and maintain UK NI compliance while working overseas.
Guidance: Social Security abroad: NI38
UK government publication NI38 providing guidance on social security and National Insurance obligations for individuals working or living abroad. Covers which country's social security system applies when working overseas, the impact of bilateral social security agreements and EU rules, and how to maintain National Insurance contribution records while abroad. Relevant for UK employees, self-employed individuals, and employers navigating cross-border social security compliance, including certificate of coverage applications and the interaction between UK NI contributions and foreign pension entitlements.
Guidance: Social security agreement between the UK and India
This UK government publication details the social security agreement between the United Kingdom and India, which coordinates National Insurance and social security contribution obligations for workers moving between the two countries. The agreement prevents double social security contributions and sets out which country's system applies based on the nature and location of employment. It is highly relevant to employers and internationally mobile employees operating between the UK and India, with direct implications for payroll tax and social security compliance in cross-border employment situations.
How TDS Software Fixes Certificate Error for a Salaried Person
A TDS (Tax Deducted at Source) software solution addresses certificate errors commonly encountered by salaried individuals in India. The article explains how dedicated TDS software can identify and resolve errors in Form 16 or TDS certificates, ensuring accurate tax deduction records for employees. Such errors can cause mismatches in income tax filings, leading to compliance issues. The software automates certificate generation, validates data against tax authority requirements, and corrects discrepancies, simplifying the process for payroll administrators and ensuring salaried taxpayers receive accurate TDS certificates for their annual income tax returns.
Employee Tax Advantaged Share Scheme User Manual
HMRC's internal manual covering employee tax-advantaged share schemes in the UK. The manual provides detailed guidance on the tax treatment of various approved share schemes including Save As You Earn (SAYE), Share Incentive Plans (SIPs), Company Share Option Plans (CSOPs), and Enterprise Management Incentives (EMIs). It outlines eligibility conditions, tax relief available to employees and employers, compliance requirements, and administrative procedures. The manual serves as a reference for HMRC officers and taxpayers navigating the rules governing tax-advantaged employee share ownership arrangements under UK law.
Don’t Let Form 16 Decide Your Tax Liability!
This article cautions Indian taxpayers against relying solely on Form 16 — the employer-issued certificate of tax deducted at source — to determine their final tax liability. It highlights that Form 16 may not capture all income sources such as interest, capital gains, freelance earnings, or rental income. Taxpayers are advised to independently calculate their total income, verify deductions claimed, and reconcile figures with Form 26AS and AIS before filing returns. The piece emphasizes personal responsibility in accurate tax filing, warning that discrepancies can trigger notices from the Income Tax Department and result in penalties or additional tax demands.
Find payroll software that is recognised by HMRC
HMRC guidance helping UK employers find payroll software recognised by HMRC for managing payroll obligations, including Real Time Information (RTI) submissions, PAYE calculations, and National Insurance contributions. The guidance lists software products that meet HMRC's technical requirements, enabling businesses to accurately report and remit payroll taxes. Choosing HMRC-recognised software helps ensure compliance with UK payroll tax regulations. This is relevant for employers of all sizes seeking compliant technology solutions to manage their payroll reporting duties efficiently.
Slovenia Tax Cuts: Proposed Changes to VAT and Contributions
Slovenia is proposing a package of tax cuts that includes reductions to VAT rates and changes to social contribution rates. The proposals are part of a broader effort to ease the tax burden on individuals and businesses amid economic pressures. Specific measures under consideration include adjustments to VAT on certain goods or services and reforms to payroll-related contributions. The article outlines the legislative status of the proposals, potential fiscal impact, and timeline for implementation, highlighting Slovenia's intent to stimulate economic activity through targeted tax relief measures.
Employment Income Manual
HMRC's Employment Income Manual is a comprehensive internal guidance resource covering the taxation of employment income in the UK. It addresses the rules for taxing salaries, benefits in kind, expenses, termination payments, share schemes, and other remuneration received by employees. The manual guides HMRC officers and is publicly available as a reference for employers, payroll professionals, and advisers. It covers personal income tax and payroll withholding obligations under PAYE, making it a key compliance reference for employment-related tax matters in the UK.
IRS Unveils Portal For Claiming Late-Filed COVID-Era Refunds
The IRS has launched a new online portal enabling businesses to file late claims for COVID-era tax refunds, particularly relating to the Employee Retention Credit (ERC). The portal streamlines the process for eligible employers who missed earlier filing windows to submit retroactive refund claims. The IRS tool aims to balance accessibility for legitimate claimants while incorporating safeguards against the widespread fraud and improper claims that have plagued the ERC program. The development comes as the agency continues processing a backlog of ERC claims and pursuing compliance actions against fraudulent filings.
Indictment Charges Drug Addiction Treatment Center CEO with Trying to Resell Millions of Dollars Worth of ERCs
A CEO of a drug addiction treatment center has been indicted for allegedly attempting to resell millions of dollars in Employee Retention Credits (ERCs). The case highlights ongoing federal enforcement actions targeting fraudulent ERC claims, a pandemic-era payroll tax relief program that has been widely abused. The indictment signals continued IRS and DOJ scrutiny of improper ERC transactions, including the secondary market resale of credits, which raises serious legal and tax compliance concerns. This follows a broader crackdown on ERC fraud that has resulted in numerous criminal charges across the United States.
Former Tax Preparer Ordered to Repay $1.4M in ERC Tax Fraud Case in Mississippi
A former tax preparer in Mississippi has been ordered to repay $1.4 million following a conviction related to Employee Retention Credit (ERC) fraud. The case involves fraudulent ERC claims submitted on behalf of clients, exploiting the pandemic-era payroll tax relief program. This enforcement action reflects the IRS and Department of Justice's sustained campaign against ERC fraud, which has cost the federal government billions. The repayment order underscores the serious financial and criminal consequences facing tax professionals who file false or inflated ERC claims.
Mandatory Direct Debit for VAT and PAYE Return Liabilities
New rules are being introduced to make direct debit mandatory for settling VAT and PAYE return liabilities, requiring businesses and employers to pay these tax obligations automatically via direct debit rather than manual payment methods. This change aims to streamline tax collection, reduce late payments, and improve compliance rates for these significant revenue streams. Affected businesses will need to set up or update their direct debit mandates with the relevant tax authority. The policy affects both VAT-registered entities and employers operating payroll, with implications for cash flow management and payment scheduling processes.
Bernie Moreno and Elizabeth Warren: Our Plan to Save Social Security
Senators Bernie Moreno and Elizabeth Warren have jointly proposed a bipartisan plan to address Social Security's long-term funding shortfall. The plan likely involves payroll tax adjustments or changes to the taxable wage base, which are central mechanisms for Social Security financing. Proposals to save Social Security typically engage payroll tax policy, affecting both employers and employees. This cross-partisan effort signals potential legislative movement on a significant fiscal issue impacting American workers and retirees, with direct implications for payroll tax contributions and benefit structures under the U.S. Social Security system.
Pay tax on payments to foreign entertainers and sportspersons
UK HMRC guidance covering the tax obligations of payers making payments to foreign entertainers and sportspersons performing in the United Kingdom. Under UK tax rules, a withholding tax applies to such payments, requiring the payer to deduct and remit tax to HMRC on behalf of the non-resident performer. The guidance details who is liable, how to calculate the deduction, applicable rates, and how double taxation treaties may reduce or eliminate the withholding obligation. It also covers registration requirements, reporting procedures, and how foreign performers can reclaim overpaid tax, making it relevant to event organisers, promoters, and sports bodies.
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