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Auto enrolment – know your staging date

Posted by: edwinsmith on March 31st, 2014

By April 2017 all UK employers will have auto enrolled their employees into a work place pension.  The first question that most employers should ask now is “when will this affect me”?

Employers will receive a notification 12 months before their staging date and a reminder will be sent 3 months before the staging date.  However it is currently estimated that preparing for auto enrolment may take 12 – 18 months, therefore it is advisable that employers make themselves aware of their staging dates as soon as possible. A table of staging dates can be found on the publications page - staging dates for auto enrolment.

There is a modified staging date (see table 2 on our publications page) for certain small employers who can choose to move their staging date back to a later date than the one determined at 1 April 2012 if, on that date, they:

  1. employed fewer than 50 staff,  and
  2. had, or were part of, a PAYE scheme that has more than 50 people in it.

For smaller employers the staging date is dependent on the first characters of the PAYE employer reference number.  If you are unsure of your employer reference number or would like clarification of your staging date please contact us.

This is the first instalment in a series of articles regarding auto enrolment as detailed on our Employer Action Plan.

Filed under: Auto enrolment, Employers

Auto Enrolment

Posted by: edwinsmith on March 26th, 2014

From October 2012 the largest employers began auto enrolling their employees into workplace pensions.  For smaller employers the staging dates are staggered to ensure that all UK employers will have auto enrolled their staff by April 2017.

Over the coming months we will publish a series of blogs on the subject of auto enrolment and the preparation required.

Employers should have an action plan in place which will ensure they are properly prepared before their staging date.  The employer action plan will include a number of tasks:

  1. Know your staging date
  2. Nominate a contact
  3. Develop initial plans
  4. Know your workforce
  5. Check processes and software
  6. Review pension arrangements
  7. Communicate to staff
  8. Record keeping, enrolment and registration once the staging date arrives
  9. Know your ongoing responsibilities

To assist employers prepare for auto enrolment The Pensions Regulator has designed a planning tool which can be found at Planning for auto enrolment - The Pensions 

If you require any advice concerning auto enrolment then please contact us.

Filed under: Auto enrolment, Employers

2014 Budget

Posted by: edwinsmith on March 20th, 2014

The key announcements in the 2014 Budget are as follows:

PERSONAL TAXATION

Income Tax

From 6 April 2015, the personal allowance for those born after 5 April 1948 will be increased by £500 from £10,000 to £10,500.

The basic rate limit threshold will be reduced to £31,785 for 2015/16 from £31,865.  The personal allowance and basic rate limit will be £42,285, a 1% increase on 2014/15 £41,865 as previously announced in the Autumn statement 2013.

For people born on or before 5 April 1948 there is no increase in the personal allowance, currently £10,500 with a higher allowance of £10,660 for those born before 6 April 1938.

Legislation will be introduced in the Finance Bill 2014 so that a spouse/civil partner can transfer part of their personal allowance to the other spouse/civil partner. For 2015/16 £1,050 of the personal allowance will be transferable from an individual whose income is below the personal allowance or who is liable at the basic rate, dividend ordinary rate or starting rate for savings. The receiving spouse/civil partner is eligible to receive the allowance if they are liable to tax at the basic rate, dividend ordinary rate or starting rate for savings. For 2016/17 the amount transferable will be 10% of the personal allowance.

For 2015-16 the main rates of income tax will remain at the 2014/15 rates - 20% basic rate, 40% higher rate and 45% additional rate.

From 6 April 2015 the starting rate of tax for savings will reduce from 10% to nil. The maximum amount of taxable savings income that can be eligible for the starting rate will also increase from £2,880 to £5,000. When combined with the increase in the personal allowance, this means that savers will not be liable for tax on any interest if their total taxable income is less than £15,500. The eligibility requirements to enable an individual to have their interest paid gross will change to accommodate the new provisions.

ISA

From 1 July 2014 all ISAs will reform in to a simpler New ISA (NISA) with the overall annual subscription limit increasing to £15,000, £4,000 for Junior ISAs. There will be changes so that the full amount subscribed can be in cash and a wider range of securities will be eligible to be included.

Company Car Tax rates 2017/18 and onwards

For 2017/18 and 2018/19  there will be an increase in the appropriate percentage for company cars emitting more than 75g of carbon dioxide per kilometre of two percentage points to a maximum of 37 per cent.

Van Fuel Benefit Charge 2015/16

The van fuel benefit charge will increase by inflation in 2015-16 based on the increase in the September 2014 Retail Price Index (RPI).

Company Car and Van Fuel Benefit Charge 2015/16

The rate of fuel benefit charge for company cars and fuel benefit charge for company vans will also increase in line with inflation (based on RPI) for 2015-16. The increase will be based on the September 2014 RPI figure.

Pensions

Changes to the limits from 27 March 2014 to drawdown, trivial commutation and small pots will affect the benefits to be taken as pension income drawdown and taxed lump sums.

The government has also announced a consultation document to consider proposed changes from April 2015 to allow greater flexibility for withdrawing from pension contribution schemes.

These changes will have a major effect on retirement options and strategies and we will produce a separate article on this in the next month or two. Please speak to us in the meantime.

CAPITAL TAXATION

Seed Enterprise Investment Scheme – Capital Gains Reinvestment Relief

Legislation will be introduced in Finance Bill 2014 to make permanent the capital gains tax (CGT) relief for reinvesting gains in SEIS shares without time limit. The relief will apply to half the qualifying re-invested amount.

BUSINESS TAXATION

Research and development tax relief for small and medium sized companies

From 1 April 2014 the rate of research and development payable tax credit will be increased from 11% to 14.5% for loss making small and medium sized enterprises.

Class 2 National Insurance process simplification for the self-employed

Legislation will be introduced to simplify the administrative process for the self-employed by using Self Assessment to collect Class 2 NICs alongside income tax and Class 4 NICs. The intention is for this to apply from April 2016.

Annual Investment Allowance

The maximum annual amount increases on 1 April 2014 for corporation tax and 6 April 2014 for income tax from £250,000 to £500,000 for the period to 31 December 2015. From 1 January 2016 it will revert back to the original annual maximum of £25,000.

VAT

Registration and deregistration limits

From 1 April 2014, the taxable turnover threshold which determines whether a person/entity must be registered for VAT will increase to £81,000 (currently £79,000).

The deregistration threshold will increase to £79,000 (currently £77,000).

The registration and deregistration threshold for relevant acquisitions from other EU Member States will also be increased to £81,000 (currently £79,000).

Changes to the rules on prompt payment discounts

To bring the UK in line with European law from 1 April 2015 businesses will need to account for VAT on the amount received for a supply. Currently HMRC accept VAT calculated on the prompt payment discount figure even if the discount is not taken. A consultation process will take place to implement the new rules. However, this will apply to telecommunications and broadcasting services where there is no obligation to provide a VAT invoice from 1 May 2014.

EXCISE DUTY

From 6 pm on Thursday 19 March 2014 the following changes will take effect:

Tobacco duty – 2% above the rate of inflation

The following increases are effective from 24 March 2014:

Alcohol duty – inflationary increase on duty for wine and made-wine, and sparkling cider of a strength exceeding 5.5%. The duty rates on beer will decrease by 6% for low strength beer, 2% for the standard rate of beer duty and 0.75% overall for high strength beer. The duty rates on spirits, ordinary cider and perry have been frozen.

The exemption cut-off will change for vehicle excise duty on 1 April 2014 for vehicles registered before 1 January 1974. This will change annually so that vehicles over 40 years old will be exempt from vehicle excise duty.

OTHER DUTIES

There are proposed reductions to bingo duty and a higher machine game duty.

 

A document containing the tax rates applying for 2014-15 will be available for download from our website downloads page in due course.

Printed tax tables are also being produced and if you would like to receive a copy then please contact us.

Please contact us at Edwin Smith if you would like to discuss any of the measures announced in the 2014 Budget in more detail or to apply any changes to your specific circumstances.This article is for general information only and is not intended to be advice to any specific person. You are recommended to seek competent professional advice before taking or refraining from taking any action on the basis of the contents of this web page.

Filed under: Budget Report, Business, Individuals, National insurance, Tax, VAT

PAYE RTI end of tax year 2013/14 and changes for 2014/15

Posted by: edwinsmith on March 10th, 2014

End of tax year 2013/14

One of the changes that arose from the introduction of PAYE Real Time Information (RTI) for 2013/14 was the ending of the requirement for employers to submit forms P35 and P14 following the end of the tax year. The payroll details are now submitted in real time under RTI.

However there are questions similar to those included on the P35 declaration that need to be answered and submitted with the final submission - HMRC - Final  submission what to report

For many employers the final submission will be the final Full Payment Submission (FPS) informing HMRC of the last employee payment in the tax year ending 5 April 2014.

The software used by some employers may be prompted to submit the answers to questions on the declaration for ‘Final Submission for the tax year’ using the Employer Payment Summary (EPS). Employers who have not made any employee payments in Month 12 (6 March 2014 to 5 April 2014) will need to use an EPS anyway to make the final submission for the tax year.

The final submission should be made on or before the date of the employer’s last employee payment or by 19 April 2014 if sending an EPS. Penalties may be charged for late submission.

Forms P60 should be provided to employees who are still working for their employer at 5 April 2014. The employer has until 31 May 2014 to provide this form.

If employers have any expense payments or benefits to declare for 2013/14 then Forms P11d, P9d and P11d(b) should be submitted to HMRC by 6 July 2014 to avoid possible penalties.

2014/15 (from 6 April 2014)

There are some changes under the PAYE/NIC and RTI regulations that will apply from 6 April 2014 as follows:

Employment Allowance - The Employment Allowance will be introduced on the 6 April 2014 and will give eligible employers a reduction of up to £2,000 in their employer Class 1 NICs liability for 2014/15 ( Edwin Smith article -  Employers Allowance ).

Change of bandings for Reporting ‘hours worked’ for employees -

From 6 April 2014 there will be an increase to the number of bandings from 4 to 5 relating to normal weekly hours worked by employees. The revised bandings will be:

A) up to 15.99 hours

B) 16 to 23.99 hours

C) 24 to 29.99 hours

D) 30 hours or more

E) Other.

It is very important that an accurate figure is provided as the number of hours is used to support claims to benefits and Tax Credits. The employer needs to make sure that they do not simply carry forward previous selections made into 2014/15 ‘hours worked' bandings which may no longer be appropriate due to the changes.

Micro employers’ concession – the concession that applied in 2013/14 for employers with less than 50 employees will end on 5 April 2014 but will be replaced by a new concession applying to existing micro employers with less than ten employees. The concession will continue the relaxation of the RTI reporting rules for these employers until April 2016 so that FPS reports can be made on or before the last payday in the tax month.

From 6 April 2014 all other employers including new employers (with less than ten employees) will be expected to report each time they pay their employees.

Late reporting - From April 2014, it will be possible to tell HMRC the reason why a particular payment is being reported after the payment date by making an entry in the new ‘Late Reporting Reason’ data field on the FPS.

There is one change for 2014/15 that takes effect this month and it is for:

Employers running payrolls in advance of paydays in new tax year – HMRC have made changes to their software to enable employers who run their payroll in advance of actual payday to make a submission (either FPS or EPS) from 6 March in respect of payments to employees on or after the commencement of the new tax year on 6 April 2014.

If you require further information or assistance regarding PAYE (RTI) or payroll then please contact us.

Filed under: Business, Charities, Company, Employers, National insurance, PAYE, Tax

Dates and deadlines: March 2014

Posted by: edwinsmith on March 1st, 2014

Upcoming deadlines for businesses and individuals

1 March: Corporation tax payment for a company not within the instalment regulations: year ending 31 May 2013.

2 March: Automatic 5% penalty will be charged on any outstanding tax/class 4 NIC at this date in respect of  2012/13.

5 March: End of month 11 for PAYE (RTI). All FPS (Full Payment Submissions) due if taking advantage of concession.

7 March: Online VAT return due to be filed and electronic payment of VAT due to be cleared into HMRC bank: quarter ended 31 January 2013.

12 March: Direct debit VAT payment will be taken: quarter ended 31 January 2013.

19 March: CIS monthly return deadline: month ended 5 March 2014.

19 March: Cheque payments for PAYE/NI, student loan, CIS  to be cleared into HMRC bank: month ended 5 March 2014.

22 March: Electronic PAYE/NI etc payments to be cleared into HMRC bank: month ended 5 March 2014.

31 March : Company tax return CT600 due to HMRC: years ending 31 March 2013.

31 March: Company accounts (Private Limited Co) due to be filed: years ending 30 June 2013.

31 March: Company accounts (Public Companies) due to be filed: years ending 30 September 2013.

31 March: End of CT 61 form reporting period - such as tax deducted on interest paid to individuals by companies.

1 April : Corporation tax payment for company not within the instalment regulations: years ending 3o June 2013.

 

Filed under: Business, Company, Dates and deadlines, Employers, Individuals, PAYE, Self Assessment