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Tax credit – reminder to renew

Posted by: edwinsmith on May 31st, 2011

HMRC are reminding tax credit claimants to renew claims by the 31 July deadline or their payments may stop.

It is best to act as soon as the renewal packs are received from HMRC.

The accuracy of the information in the pack will need to be checked and HMRC should be informed of any changes in circumstances that hasn’t already been reported during the year. These could be about working hours, childcare costs or pay. If asked, details of the previous year’s income must be provided.

Having the right documents to hand will help reduce errors when filling out the form or calling the tax credits helpline on 0845 300 3900. These would be, for example, payslips, end of year P60 forms and childcare details.

The DirectGov website has more help and information on renewing your tax credits.

Alternatively, please contact us at Edwin Smith.

Filed under: Tax

Business Record Checks

Posted by: edwinsmith on May 23rd, 2011

HMRC has started pilot business record checks in 8 locations (Edinburgh, Irvine, Manchester, Liverpool, Stockport, Sunderland, Sheffield and Portsmouth) running until 15 July.

It is expect that up to 1,200 Business Record Check (BRC) visits will be undertaken by the 30 HMRC staff assigned to the pilot.

HMRC has clarified that the BRC initiative does not insist on a specified format for business records, but checks whether the records of all business income and outgoings are recorded in a way appropriate for the size and nature of the trade.

HMRC has also stated that it does not intend to charge any penalties for record keeping failures during the current phase of testing and continues to review its long-term planning around the introduction of such a charge in the future.

At some point during 2011 it is expected that the BRC visits will become standard practice and penalties are likely for poorly kept records. More information is expected after the initial pilot.

HMRC have issued free tools to help you get your business records in order. The four new products are suitable for the self employed, sole traders and small businesses. Also you can contact us as we can help you review your records.

Keeping records for business – what you need to know: a basic guide with a helpful list of where to get more information.

A general guide to keeping records for your tax return: detailed guidance on record-keeping covering what type of records you may have to keep, common problems and examples for different types of business.

Set up a basic record-keeping system: with examples of spreadsheets and information about setting up a record-keeping system.

Find out what records you should be keeping: looks at the records you need to keep and assesses how well you are keeping them. If you are thinking of starting business the tool provides you with a checklist. If you are established it will give feedback and advice on improvements you may need to make.

Filed under: PAYE, Tax, VAT

Reminder – Changes to Class 2 National Insurance contribution payment dates

Posted by: edwinsmith on May 16th, 2011

From April 2011 the payment of Class 2 National Insurance contributions will change and become due on the 31 July and 31 January each year, bringing payment dates in line with Self Assessment.

Please see our previous article about the changes to payment dates for Class 2 National Insurance contributions for more information.

The HMRC website also has more information on the payment date changes for Class 2 National Insurance contributions.

Filed under: Tax

Spring PAYE alert for employers

Posted by: edwinsmith on May 9th, 2011

HMRC has issued an alert to employers about key PAYE changes coming in this spring.

The changes affect Employer Annual Returns and starter and leaver PAYE forms:

  • From April, employers with fewer than 50 employees must now send starter and leaver forms – P45s, P46s and similar pension information – online to HMRC.
  • All employers who send their Employer Annual Return to HMRC after the 19 May filing deadline will now receive a late-filing penalty. Previously, an extra-statutory concession gave employers extra time before HMRC charged a penalty, but this has been withdrawn.
  • From this year, employers will be liable to a penalty if they file their annual return on paper. Last year, no penalty was charged for employers with five or fewer employees. But these transitional arrangements have now ended.

HMRC will also be issuing PAYE penalties this spring for the first time in two key areas:

  • Penalty notices will be sent out in April to employers with 50 or more employees who have not filed starter and leaver forms online to HMRC. The first penalties will apply for the three month period to 5 April 2011, with further penalties being issued on a quarterly basis.
  • From May this year, HMRC will start sending out penalties for late payment of PAYE. Employers will be liable for a penalty if they haven’t made PAYE payments on time, and in full, from April 2010. The amount of the penalty will depend on the amounts paid late and the total number of late payments made. Penalties will be charged after the tax year-end.

The latest issue of the Employer Bulletin can be downloaded from the HMRC website.

Filed under: PAYE

Reminder on PAYE payments & late penalties

Posted by: edwinsmith on May 3rd, 2011

HMRC have issued a special notice about electronic PAYE payments. To avoid your payment being late you must make sure your payment has cleared into HMRC’s bank account by the due date.

The due date for electronic payments is the 22nd of each month. However when the 22nd falls on a non banking day (weekend or bank holidays) the payment must have cleared into the HMRC bank account by the last bank working day before the 22nd.

For example: 2011–2012 PAYE month 1 for period ended 5 May 2011.

The due date of 22 May 2011 falls on a Sunday (non banking day), so if you are paying electronically your PAYE payment must clear into HMRC’s bank account by Friday 20 May 2011. If the payment isn’t cleared in time you will be noted as paying late, and late payments for this tax year may result in a penalty being charged.

To add a further consideration, the HMRC bank account do not operate Faster Payment so any electronic payment is likely to take approximately three working days to clear.

Please see our previous article on the introduction of the late PAYE payment penalties for more information.

Also see the HMRC website for more information about late PAYE payment penalties.

Filed under: PAYE