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Auto Enrolment – Develop an initial plan

Posted by: edwinsmith on April 30th, 2014

Once an employer knows their staging date, it is a good idea to develop an initial plan in order to understand the preparation tasks which must be carried out, when the tasks should be completed and who will implement them.

To save time and the ensure the registration deadline is not missed, employers can also log in to automatic enrolment registration online and start providing some of the information required as and when it is received.  Such as the name and address of the employer, the PAYE reference number, pension scheme reference and the address.

In order to be fully prepared for auto enrolment, employers must complete a number of tasks, including:

  1. Assessing the workforce
  2. Reviewing internal processes and testing software to ensure it will support automatic enrolment
  3. Reviewing existing pension arrangements and setting up a scheme if necessary
  4. Communicating with staff on how they will be affected by auto enrolment.

The time required to complete each task will vary depending on the size of the workforce and the existing arrangements that are in place.  Scheduling a target date for the completion of each task will ensure that employers allow sufficient time to be fully prepared for auto enrolment before their staging date.

Employers will need to involve key people in the planning process, such as the person who runs payroll, your HR administrator and your accountant as they will be carrying out some of the day-to-day activities once automatic enrolment is up and running.

The Pensions Regulator have produced a quick guide to preparing for automatic enrolment (PDF, 12 pages) leaflet summarising the preparations needed and to help develop initial plans.

This is the third 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 -

For more information on pensions or for help making an initial plan please contact us.

Filed under: Auto enrolment, Employers, Individuals

HMRC – Second incomes campaign

Posted by: edwinsmith on April 28th, 2014

HMRC have introduced another campaign that targets individuals who supplement there main source of income (usually employment) with an additional income from working for themselves that has not previously been declared and taxed .

This would be classed as a second income for the purposes of this campaign and would include income from activities such as:

  1. Consultancy fees –training, property plans etc.
  2. Organising parties and events
  3. Providing services like taxi driving, hairdressing or fitness training
  4. Making and selling craft items
  5. Buying and selling goods eg market stalls, car boot sales, eBay trading etc

The purpose of the campaign is to provide an incentive for individuals to make a voluntary disclosure of a second income in order to obtain best possible terms from HMRC.

If HMRC discover by their own means an undisclosed second income then penalties incurred by the individual may be higher and the individual could face criminal prosecution.

An individual will have 4 months (from the date of HMRC receiving notification) to calculate and pay the tax owed but if more time is needed to pay then a call to the HMRC help line (0300 123 0945) should be made.

HMRC can be notified by completing D01 - Second incomes campaign notification form  and follow instructions on submission of form (either online or post).

Once acknowledgement has been received by HMRC then complete D02 Second incomes campaign disclosure form and follow instructions on submission of form (either online or post).

Full details of campaign including a helpful video on what is deemed a second income can be found at HMRC second incomes campaign.

Please contact us if you require any assistance or advice concerning the second incomes campaign.

 

Filed under: HMRC campaigns, Individuals, Self Assessment, Tax

Auto Enrolment – Nominate a contact

Posted by: edwinsmith on April 22nd, 2014

In order to help employers manage their auto enrolment responsibilities, the Pensions Regulator will send regular emails to a nominated contact at key stages along the process.

Employers can nominate up to 2 contacts.  The primary contact must be the most senior person in the organisation, for example the CEO or managing director.  The secondary contact is optional and would typically be the person who will manage or implement the auto enrolment process, for example HR manager or payroll accountant.

The process of nomination is a simple form whch can be completed on the Pensions Regulator website including the name, job title and contact details for each nominee.   You will also need either the employers PAYE reference number or the unique code included on the letter each employer should receive when their staging date is less than 12 months away.

Please note that nominating a contact does not mean that the employer is registered for auto enrolment.  The full responsibility for complying with duties remains with the employing organisation – not the nominated contact.

To nominate a contact on the pensions regulator website click here.

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

First instalment – Know your staging date

For further advice on pensions and payroll please contact us

Filed under: Auto enrolment, Employers

Tax codes and Class 2 NIC underpayments

Posted by: edwinsmith on April 16th, 2014

Some taxpayers will have received tax codes for 2014/15 which contain a reduction to their personal allowances for class 2 national insurance underpayments. Relevant taxpayers should have received correspondence from HMRC last year regarding the outstanding liabilities asking for payment. Taxpayers were advised that if payment was not subsequently made, then the collection would be made via a salary, pension or other PAYE income by making an appropriate adjustment by the PAYE code.

There is still the opportunity to make payment and if the debt is paid, HMRC will amend the tax code.

An individual can contact the HMRC National Insurance contribution helpline on telephone: 0300 200 3505 for information on how to make a payment.

If you need any additional advice then please contact us.

 

Filed under: National insurance, PAYE, Tax

New timetable for RTI penalties and interest

Posted by: edwinsmith on April 8th, 2014

New timetable for RTI penalties and interest

When PAYE (RTI) legislation was introduced from 6 April last year the proposed automatic penalty and interest charges were delayed for one year in order that Employers would be provided time to adapt to the changes involved with online filing of Real Time Information.

There have been some problems in the first year of RTI and HMRC have recently announced that the introduction of the automatic penalties and interest will be phased in over the coming tax year. This is after consultation and feed back from Employers etc concerning the operation of RTI.

The time table for these changes will be:

  1. April 2014 – ‘in-year’ interest on any ‘in-year’ payments not made by due date (see below);
  2. October 2014 – automatic ‘in-year’ late filing penalty; and
  3. April 2015 – automatic ‘in-year’ late payment penalties.

 

Interest from 2014/15

‘In year’ interest will affect Employers on any late payments (see below) in 2014/15, starting from the first payment date of 19 May 2014. HMRC will issue a late payment interest charge notice when the employer has paid the outstanding PAYE in full.

Charge 2014-15 Interest charged from dates below to date payment made in full
PAYE tax and Class 1 NIC charges  and Construction Industry Scheme payments 19th of relevant month/quarter for all cheque payments and 22nd of relevant month/quarter for all electronic payments
Earlier Year Update 19 April for all cheque payments and  22 April for all electronic payments
Penalties Relevant due date of the penalty charge
Class 1A NIC charges 19 July for all cheque payments and  22 July for all electronic payments
Class 1B NIC charges 19 October for all cheque payments and 22 October for all electronic payments

 

For further details see HMRC help sheet PAYE/NIC etc Interest - Helpsheet

We will detail the late filing penalties due to be introduced in October 2014 nearer this date.

Please contact us for further advice.

Filed under: Employers, National insurance, PAYE

Private Residence Relief (Capital Gains Tax) – Reduction in final period exemption

Posted by: edwinsmith on April 4th, 2014

A change announced in the 2013 Autumn Statement and to be introduced in 2014 Finance Bill will be to reduce the final period for which Private Residence relief can be given for capital gains tax.

Previously as long as the property has been your only or main home at some point during your period of ownership, the last three years (36 months) have always qualified for relief even if you did not live there in that period.

From 6 April 2014 the final period exemption will be reduced from 36 months to 18 months.

In recognition that a person moving into a care home may take longer to decide to dispose of their former home, the period will remain a 36 month final period for this group of people.

This measure will not have effect where contracts for the sale of the property are exchanged on or before 5 April 2014 and completed on or before 5 April 2015.

In addition to the above change we understand HMRC are apparently reviewing the tax payer’s ability, with one or more homes, to nominate which property is to be to be treated as the main home. You are entitled to private residence relief on one home. It’s possible that after consultation HMRC may decide to remove a tax payer’s ability to nominate a property from next year.

For further details on the Private Residence relief for capital gains see our previous article which is subject to above changes - Private residence relief from capital gains tax.

If you require any further tax advice on capital gains tax in respect of selling a property and private residence relief please contact us.

Filed under: Capital Gains Tax, Self Assessment, Tax

Dates and deadlines: April 2014

Posted by: edwinsmith on April 1st, 2014

Dates and deadlines: April 2014

1 April: Corporation tax payment for a company not within the instalment regulations: year ending 30 June 2013.

Reduction in main rate of corporation tax to 21%.

5 April: End of month 12 for PAYE (RTI). All FPS (Full Payment Submissions) due if taking advantage of concession. This concession ends on this date for employers with less than 50 Employees.

2013/14 tax year end.

6 April: Start of new tax year 2014/15.

Start of new PAYE (RTI) reporting concession for existing employers with less than 10 employees.

7 April: Online VAT return due to be filed and electronic payment of VAT due to be cleared into HMRC bank: quarter ended 28 February 2014.

10 April: Direct debit VAT payment will be taken: quarter ended 28 February 2014.

14 April: Submission of forms CT61 together with payment of tax due: quarter ended 31 March 2014

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

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

Final EPS submission including Employer end of tax year 2013/14 declarations should be submitted to avoid late filing penalty.

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

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

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

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

1 May : Corporation tax payment for company not within the instalment regulations: years ending 31 July 2013.

 

Filed under: Business, Company, Dates and deadlines, Employers, National insurance, PAYE, Self Assessment, Tax, VAT

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
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