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How car dealers can navigate the legal minefield in 2015

Despite their obvious importance to you and your business, you may be getting a little tired of hearing the letters F, C, and A, especially if your business is already fully compliant. But what about non-FCA regulation changes on the horizon? We asked a selection of legal experts for their advice on regulatory developments in the year ahead:

 

Alastair Kendrick, director, MHA MacIntyre HudsonAlastair Kendrick, director, MHA MacIntyre Hudson

Employee pension entitlements (‘Auto-enrolment’)

Government pension legislation requires employers to introduce a pension for their employees (auto-enrolment). The precise date it impacts on dealers will be governed by their size, but all smaller dealerships are likely to be affected in 2015. The legislation is to ensure employees have a pension at retirement, with an aim to reduce the pension burden on the state.

The consequence of not complying is an initial penalty of £400, but this could be escalating to a daily penalty. Dealers may require help in managing the process and help from independent financial advisers in dealing with employee questions. We recommend dealers work with a pension provider who can offer the pension to the employees.

 

Company car schemes / fuel usage and reporting

New rules set out in the Income Tax (Earnings and Pensions) Act 2003 in regard to the reporting of expenses and benefits and operation of PAYE/National Insurance have been introduced to get employers to comply with the tax/NIC rules.

Many dealers will be surprised to see HMRC has not been actively challenging arrangements over recent years. Many dealers have set up various arrangements with HMRC, which may not have recently been reviewed to see if they are compliant. This covers things such as the return of benefit in kind in regard to demonstrator cars using the averaging scheme, and employee car ownership schemes

Dealers could be exposed to paying to HMRC tax/NIC due that had not been reported, together with interest and penalties. The penalties will be levied at a rate based on the circumstances of the case up to a maximum of the tax/NIC underpaid.

>> The Health and Work Service -- Henry Knill, Motor Industry Legal Services



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