Author: Glenn

The Office for Budget Responsibility (OBR) has offered the following explanation:

“Fuel duties are levied on purchases of petrol, diesel and a variety of other fuels. They represent a significant source of revenue for government. In 2023-24, we expect fuel duties to raise £24.7 billion. That would represent 2.2 per cent of all receipts and is equivalent to £850 per household and 0.9 per cent of national income.

Fuel duty is levied per unit of fuel purchased and is included in the price paid for petrol, diesel and other fuels used in vehicles or for heating. The rate depends on the type of fuel:

• the headline rate on standard petrol and diesel is 52.95 pence per litre, it has been frozen since 2011-12 and it reflects a temporary five pence cut introduced in 2022-23 and subsequently extended to 2023-24 and 2024-25. This also applies to biodiesel and bioethanol.
• the rate on liquefied petroleum gas is 28.88 pence per kilogram.
• the rate on natural gas used as fuel in vehicles (e.g. biogas) is 22.57 pence per kilogram; and
• the rate on ‘fuel oil’ burned in a furnace or used for heating is 9.78 pence per litre.

VAT is applied after fuel duty, so, for example, the pump price of a litre of petrol currently reflects the pre-tax price plus 52.95p for fuel duty plus 20 per cent VAT on the pre-tax price and a further 10.59p for VAT at 20 per cent on fuel duty.”

The interesting point here is that the fuel duty is a fixed price per litre and so over time the real value of the duty will decline due to inflation. This has been the case for many years.

Will this be an item that government will increase in the October budget?

There is a trivial benefit-in-kind (BiK) exemption for small, non-cash employee benefits. This exemption applies to BiKs classified as 'trivial,' helping employers simplify the handling of these benefits while offering a tax-efficient way to give small gifts to staff.

However, the "trivial" benefit rules actually present an excellent opportunity for employers to provide small rewards and incentives. The key condition is that the gifts must not be a reward for services performed or part of the employee’s duties. Gifts for personal milestones, such as the birth of a child or a marriage, as well as other goodwill gestures, usually qualify.

Employers benefit as these trivial BiKs do not need to be included in PAYE settlement agreements or reported on P11D forms. Additionally, they are exempt from Class 1A National Insurance contributions.

To qualify for the tax exemption, trivial BiKs must:

• Not be cash or a cash voucher;
• Cost £50 or less;
• Not be part of a salary sacrifice or other contractual arrangement;
• Not be given in recognition of services performed by the employee or in anticipation of such services.

For directors or office-holders of close companies and their families, there is an annual cap of £300. Each gift must still adhere to the £50 limit, but this allows up to £300 of non-cash benefits per person each year. This cap does not apply to employees. If the £50 limit is exceeded for any gift, the entire value becomes taxable.

The deadline for submitting paper self-assessment tax returns for the 2023-24 tax year is 31 October 2024. Late submission of a self-assessment return will generate a £100 late filing penalty. The penalty usually applies even if there is no liability or if any tax due is paid in full by 31 January 2025.

Daily penalties of £10 per day will also take effect if the tax return is still outstanding three months after the filing date up to a maximum of £900. Additional higher penalties will be incurred if the return remains outstanding after six and twelve months.

We would recommend that anyone still submitting paper tax returns consider the benefits of submitting the returns electronically. This would allow for an additional three months until 31 January 2025 in which to submit a return.

In addition, you must inform HMRC by 5 October 2024 if you need to complete a tax return for the 2023-24 tax year and have not done so before. Failure to do so could result in a fine.

Pension Credits can provide extra income to those over State Pension age and on a low income. The Department for Work and Pensions (DWP) recently launched a Pension Credit action week to boost take-up of this vital benefit.

It is thought that up to 880,000 pensioners could be missing out on benefits worth on average up to £3,900 per year. A valid claim for Pension Credit will also entitle eligible pensioners to secure this year’s Winter Fuel Payment. This follows the Chancellor’s recent announcement that the Winter Fuel Payment will be means tested.

Pensioners whose weekly income is below £218.15 for a single person or £332.95 for a couple should check to see if they are eligible. If your income is higher, you might still be eligible for Pension Credit if you have a disability, you care for someone, you have savings or you have housing costs. Not all benefits are counted as income.

The DWP have also joined forces with charities, broadcasters and a range of partners to encourage pensioners to check if they are eligible for Pension Credits. The DWP is also asking families, friends and neighbours of elderly people to assist if required.

Pensioners must apply by 21 December 2024 in order to make a backdated claim for Pension Credit and be eligible for the Winter Fuel Payment. Details of how to make an application for Pension Credit can be found on GOV.UK at https://www.gov.uk/pension-credit/how-to-claim.

The Insolvency Service is a government agency that provides services to those affected by financial distress or failure by seeking to tackle financial wrongdoing and maximising returns to creditors. The Insolvency Service operates as an executive agency of the Department for Business and Trade (DBT). 

The Insolvency Service has issued a new press release warning people that fraudsters are impersonating the agency and its staff. It seems there has been a significant increase in scams involving the impersonation of the Insolvency Service and its employees.

Fraudsters are sending fake letters claiming that the Insolvency Service has authorized third-party companies to recover lost investments, which in reality, are part of the scam itself. These companies, which are registered at Companies House, are also being impersonated by criminals. The Insolvency Service has received over 300 complaints so far this year and it’s clear that this is becoming a growing issue.

The Insolvency Service is urging the public to be vigilant especially if they have had failed investments and receive communications about recovering funds through third parties. It’s important to verify any communication directly with official sources before taking any action.

The press release lists the following important points to be aware of:

• Fraudsters have been impersonating Insolvency Service staff through scam emails, letters and phone calls.
• The scammers contact individuals who have lost money in previous investments, claiming to be from the Insolvency Service.
• The Insolvency Service will never ask for an upfront fee or authorise another company to recover money lost in a previous investment for an upfront fee.
• All genuine Insolvency Service email addresses follow the format firstname.surname@insolvency.gov.uk. No official Insolvency Service email addresses or websites will use a domain ending in ‘.co.uk’, ‘.com’ or similar.