Edwin Smith - Chartered Accountants
  • Home
  • About Edwin Smith
  • Accounting Services
  • Contact Edwin Smith

Auto enrolment -on or just after your staging date

Posted by: edwinsmith on July 21st, 2014

Your staging date is when the automatic enrolment duties come into force for your business.  On this date you must assess your workforce in order to know which staff must be automatically enrolled and which staff have a right to opt in or join your pension scheme. By this stage, you should have the necessary systems in place to generate this information automatically.

It is possible to use postponement on your staging date to delay automatic enrolment for some or all staff for up to three months. This means you won’t need to assess them to identify what duties you have for them until the last day of the postponement period, at which point you must automatically enrol any who are eligible.

You will also need to make a declaration to the pensions regulator taking account of everyone who worked for you on your staging date. The declaration will include details of how many people were automatically enrolled, how many were already in an existing pension scheme you provide, and what you did for anyone else in your employment. You’ll still need to complete your declaration even if you didn’t have to automatically enrol any of your staff.

At staging or when postponement ends, your key duties are to:

  1. Automatically enrol all staff who are eligible and make them active members of your pension scheme – you have 6 weeks from your staging date (or the day after postponement) to do this.
  2. Write to each member of staff to tell them how automatic enrolment affects them, or that you have postponed them – you have 1 month from your staging date to do this.
  3. Submit a declaration online to tell the pensions regulator how you’ve complied with your duties – you have 5 months from your staging date to do this.

This is the eighth installment in a series of articles regarding auto enrolment as detailed on our Employer Action Plan. Previous installments detailed below:

1 – Know your staging date

2 -

3 -

4 –

5-

6-

7-

 For more information on pensions or to discuss your auto enrolment action plan please contact us.

 

Filed under: Auto enrolment, Business, Company, Employers

Repayment claims for limited company subcontractors

Posted by: edwinsmith on July 14th, 2014

As a reminder (see last year’s article Companies-that-have-cis-deductions-on-their-own-income-and-claiming-repayments ) a claim must be made in writing for a repayment where a limited company has ended the tax year with CIS tax owing to them under the PAYE (RTI) system and the company is not able to recover the tax against PAYE/NIC /CIS tax payments due in the current year. The company must have made the Final Employer payment Summary (EPS) and all associated Full payment Submissions (FPS) for year in respect of claim.

The HMRC CIS repayment claim help card details the information that should be provided with repayment claim which should be sent to the address below.

PAYE Employer Office

Room BP4102

Benton Park View

Newcastle Upon Tyne

NE98 1ZZ

In previous years there have been delays in repayments made being made by HMRC but the help card mentions that CIS repayment claims will be processed within 25 days of HMRC receiving claim in writing and the claim matches the information held by HMRC.

A repayment can be set off against other HMRC liabilities of the company such as corporation tax, VAT etc but this request must be made in the tax repayment claim with the appropriate tax references (see help card link above).

If there are sufficient PAYE/NIC deductions in the following year to which the claim relates then it would be easier to claim the tax repayment by reducing the PAYE/NIC liability payments for that year.

Where a limited company is subject to the deduction of CIS tax from its subcontractor income then it should be considered if an application appropriate for gross payment status. A company would need to meet the criteria for three tests for business, turnover and compliance –see HMRC - Payments under CIS - gross or under deduction.

Please contact us for further advice or assistance in respect of CIS tax repayment claims.

Filed under: Company, Employers, PAYE

Agency and temporary workers – agency legislation changes from 6 April 2014

Posted by: edwinsmith on July 7th, 2014

From 6 April 2014 a worker is classified as an employee (and hence subject to PAYE) of an agency if all of the following conditions are met: 

  1. the worker must personally provide services, (which are not excluded services) to the client, and
  2. there must be a contract between the client (or a person connected with the client) and a person who is not the worker, the client or a person connected with the client (that is, “the agency”) and under or in consequence of that contract: (i) the worker’s services are provided, or (ii) the client or any person connected with the client pays, or otherwise provides consideration for the services, and
  3. the worker must be subject to (or to a right of) supervision, direction or control (by any person) as to the manner in which they provide their services, and
  4. remuneration receivable by the worker in consequence of providing the services does not constitute employment income/employed earners earnings before the provisions of the agency legislation are applied.

If it is held that the manner in which the worker provides the services is not subject to (or to the right of) supervision, direction or control by any person the agency must keep and be able to show evidence to that effect.

The agency legislation will not apply in the following circumstances: 

  1. if the remuneration the worker receives in consequence of providing the services is otherwise chargeable as employment income before the agency legislation is applied, or 
  2. when the worker is legitimately self-employed. There is an associated record keeping requirement to demonstrate when this is applicable, or 
  3. where it can be shown that the worker is not subject to (or to a right of) supervision, direction or control by anyone, as to the manner in which they provide the services. There is an associated record keeping requirement to demonstrate when this is applicable, or
  4. if the worker provides their services wholly in their own home, or on other premises which are not controlled or managed by the client, unless the worker is required to do so at those premises because of the nature of the services and work being provided to the client, or 
  5. if the worker provides their services as an actor, singer, musician or other entertainer or as a fashion, photographic or artist’s model.

The last three points are referred to as ‘excluded services’ in the new legislation.

Penalties have been introduced for the keeping and preserving of records and returns.

Prior to 6 April 2014 the conditions for the agency legislation to apply included the condition for an agency contract to exist between the worker and the agency but this is not included in the new conditions.

Self employed individuals may now find themselves classified as an employee of the agency under the new legislation. If you are ceasing self employment and require assistance with the cessation then please contact us. If you require further advice please also contact us.

Filed under: Business, Company, Employers, Individuals, Self Assessment

Dates and deadlines July 2014

Posted by: edwinsmith on July 1st, 2014

Upcoming deadlines for businesses and individuals

1 July: Corporation tax payment for a company not within the instalment regulations: year ending 30 September 2013

5 July: End of month 4 for PAYE, all RTI submissions due if taking advantage of concession.

5 July: PAYE settlement agreements to be agreed with HMRC by this date: tax year 2013-2014

6 July: Forms P9d, P11ds and P11d(b) due for submission to HMRC by this date and provide employees with copies: tax year 2013-2014

7 July: Online VAT return due to be filed and electronic payment of VAT due to be cleared into HMRC bank: quarter ended 31 May 2014

10 July: Direct debit VAT payment will be taken: quarter ended 31 May 2014

19 July: CIS monthly return deadline: month ended 5 July 2014

19 July: Cheque payments for PAYE/NI, student loan, CIS  and Class 1a NIC to be cleared into HMRC bank: month ended 5 July 2014 plus quarter 1 for quarterly payers

22 July: Electronic PAYE/NI etc and Class 1a NIC payments to be cleared into HMRC bank: month ended 5 July 2014 plus and quarter 1 for quarterly payers

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

31 July: Company accounts (Private Limited Co) due to be filed: years ending 31 October 2013

31 July: Company accounts (Public Companies) due to be filed: years ending 31 January 2014

31 July: Second payment on account of tax due: tax year 2013-2014

31 July: Finalise tax credit renewals: tax year 2013-2014

1 August 2014: Corporation tax payment for company not within the instalment regulations: years ending 31 October 2013

2 August: Submission of form P46 (car) for changes in quarter to 5 July 2014

Filed under: Business, Dates and deadlines, Employers, Individuals

Communicate with staff

Posted by: edwinsmith on June 27th, 2014

It is a legal requirement for employers to write to each member of staff to tell them how automatic enrolment affects them and about their rights. Our publications page includes a summary of the information that should be communicated the each category of staff member.

The Pensions Regulator have published a letter template tool to assist with this task.  The tool can be accessed at http://www.thepensionsregulator.gov.uk/employers/letter-templates-for-employers.aspx

Once you know that you have staff to automatically enrol, you must send their details to your pension scheme to ensure active membership. Then you must write to these staff to tell them they’ve been automatically enrolled and that they have a right to opt out of the pension scheme – this must happened within six weeks of your staging date. Please see our previous article on how to find out your staging date.

Once your staging date has passed and your existing employees have been automatically enrolled, you must write to any new employees within six weeks of the day a new staff member joins or becomes eligible to be automatically enrolled.

The exception is for existing scheme members who must be contacted within two months.

The letters may be sent to staff by post or email, but the information must be sent in writing and must be sent individually. A third party such as an accountant or financial adviser may send the letters on the employers behalf, but it remains the employers responsibility to make sure the right information gets to the right member of staff at the right time.

To see The Pensions Regulators full guidance on providing information to employees click here

This is the seventh instalment in a series of articles regarding auto enrolment as detailed on our Employer Action Plan. Previous instalments detailed below:

1 – Know your staging date

2 -

3 -

4 –

5-

6-

For more information on pensions or to discuss your auto enrolment action plan please contact us.

 

 

Filed under: Auto enrolment, Business

Employer provided beneficial loans – limit increase

Posted by: edwinsmith on June 24th, 2014

The exemption threshold for employer provided beneficial loans which do not attract a tax charge is rising from 6 April 2014 from £5,000 to £10,000. The limit applies to the combined value of all outstanding loans during the tax year. This means that provided the total of all outstanding loans to an employee (or their relative) during the year is less than £10,000 there is no benefit in kind charge on the employee and hence no reporting requirements on form P11D at the end of the tax year.

If the exemption threshold is exceeded then a benefit in kind charge arises. If no interest is charged or at a rate lower than the official average rate of interest set by HMRC, then the value of the benefit is calculated using the official average rate of interest (less any lower rate of interest charged to the employee). The official average rate of interest for 2014/15 has reduced from 4% in 2013/14 to 3.25%.

If you would like to discuss loans to employees including directors please contact us.

Filed under: Business, Employers, National insurance, PAYE

Review your pension arrangements

Posted by: edwinsmith on June 14th, 2014

Once you have carried out an initial assessment of your staff you will know which employees are eligible for auto enrolment.

If you have staff to auto enrol you will need to ensure that you have an appropriate pension scheme in place and then agree with your pension scheme provider what information they will need from you and when you will need to deliver it, in order to auto enrol your staff on time.

If you already have a pension scheme

You will need to ensure that it meets the criteria of an auto enrolment scheme.  You should also check that the scheme is good quality, for example it provides value for money and protects your staff’s savings. Click here for The Pensions Regulators guide on selecting a good quality pension scheme.

If you operate a defined benefit pension scheme you should contact the trustees to check whether your scheme qualifies.

If you operate a defined contribution pension scheme it may be used if it meets the criteria regarding minimum levels of contribution.  There are two main ways to check if a scheme may be used:

  1.  if it requires minimum contributions based on qualifying earnings, or
  2.  the employer self-certifies that it requires contributions in accordance with one of three sets of contributions.

For more detailed guidance on the above criteria and to see how the criteria apply to occupational pension schemes and personal pension schemes, The Pensions Regulator have published a tool on their website.Click here to launch the DC Qualifying schemes tool.

If your scheme qualifies or you are able to certify, you can continue to use it for existing members. If you want to use the scheme to automatically enrol your eligible jobholders from your staging date, then the scheme also needs to meet the automatic enrolment criteria.

To be used for automatic enrolment, the scheme:

  1. must not require the worker's consent to join
  2. must not require the worker to provide any information or make any choices to join or remain a member, eg submit an application form or choose a type of fund
  3. must allow a worker to join it from their first day of employment.

If your scheme doesn't qualify, or if it qualifies but doesn't meet the automatic enrolment criteria, it may be possible to amend the terms of the policy. To explore this option, contact your scheme provider.

If you do not have a qualifying scheme

If you can't amend the terms of the policy or you do not have a qualifying scheme, you will need to choose a new scheme that can be used for automatic enrolment from your staging date.

A financial advisor can assist you with finding a pension scheme provider.  When making enquiries and choosing a provider, you should consider the legal requirements of auto enrolment and the quality of the scheme.  Click here to see The Pensions Regulator advice on finding a provider including a list of questions to ask potential providers

It is important that the scheme you choose delivers good outcomes for its members. Click here for The Pensions Regulators guide on selecting a good quality pension scheme.

This is the sixth instalment in a series of articles regarding auto enrolment as detailed on our Employer Action Plan. Previous instalments detailed below:

1 – Know your staging date

2 -

3 -

4 –

5-

For more information on pensions or to discuss your auto enrolment action plan please contact us.

 

Filed under: Auto enrolment, Business

Withdrawal of renewals basis for residential let property

Posted by: edwinsmith on June 10th, 2014

The renewals basis which allowed for tax relief on white goods, furniture and soft furnishings for residential let property has been withdrawn from 6 April 2013 for income tax and 1 April 2013 for corporation tax.

This relief was one of the extra statutory concessions that have been available for some time but HMRC are now withdrawing these concessions.

The withdrawal of the renewals basis concession is causing some concern to tax advisers and tax payers but we have detailed below what we believe will be the affect of the withdrawal of this concession.

This will not affect furnished residential let property where the wear and tear allowance (10% statutory allowance) is available as detailed in our online article tax-relief-on-wear-and-tear-of-furniture-let-property for fully furnished lettings.

However the withdrawal of the renewal basis will affect unfurnished residential lettings. Capital allowances are not allowable against income from unfurnished residential lettings. Therefore the costs of replacing any free standing equipment (such as a fridge freezer) in an unfurnished residential property will not be deductible as an expense.

Where white goods are fitted such as integrated hobs and ovens then these will be recognised as part of the entirety of the property and so would be deductible as a repair when replaced.

Small items such crockery, rugs i.e. low cost furnishings would be tax deductible from income from unfurnished residential lettings.

For full details on HMRC updated guidance on repairs concerning furnished, part furnished and unfurnished lettings see HMRC - Property businesses deductions - repairs and renewals.

Please contact us for further advice tax implications of income from let properties.

Filed under: Company, Individuals, Self Assessment, Tax

Dates and deadlines June 2014

Posted by: edwinsmith on June 1st, 2014

Upcoming deadlines for businesses and individuals:

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

5 June: End of month 2 for PAYE (RTI). All FPS (Full Payment Submissions) due if taking advantage of concession where still available.

7 June: Online VAT return due to be filed and electronic payment of VAT due to be cleared into HMRC bank: quarter ended 30 April 2014.

11 June: Direct debit VAT payment will be taken: quarter ended 30 April 2014.

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

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

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

30 June : Company tax return CT600 due to HMRC: years ending 30 June 2013.

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

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

1 July : Corporation tax payment for company not within the instalment regulations: years ending 30 September 2013.

6 July : P11ds and P11d(b) due for submission to HMRC by this date: Tax year 2013/14.

Filed under: Business, Dates and deadlines, Employers, Individuals, PAYE
« Previous Page — Next Page »