The Low Incomes Tax Reform Group (LITRG) is reminding students who have been working over the summer to make sure they have not overpaid tax and, if they have, to claim a refund from HMRC. Students are more likely to overpay tax as they usually only work – or earn more – at certain times […]
HMRC have updated guidance on how to allocate the apprenticeship levy allowance across multiple PAYE schemes and/or connected companies and charities. Pay Apprenticeship Levy explains when the apprenticeship levy needs to be paid and how to report payments. The guidance has been updated at the section about ‘how to allocate your allowance’. The apprenticeship levy […]
The Low Incomes Tax Reform Group (LITRG) has published a technical news article about opting out of a workplace pension. Low income workers who have been put into a workplace pension under the auto-enrolment programme resulting in less take-home pay may be considering opting out. The LITRG explains the longer-term consequences of opting out so […]
If pension savings are more than the annual allowance, unused annual allowances from previous years can be brought forward. The annual allowance is the limit on the amount of pension savings that can be made to all pension schemes in a tax year before tax has to be paid on them. Pension savings over the […]
The World Cup, which starts today, is a great opportunity for businesses around the world to capitalise from employees’ national pride. However, the tournament features many games during work hours, causing workers to have to potentially miss games, which can cause staff to feel unmotivated. It is therefore important to set clear rules for you […]
The subject of classifying food and drink expenditure is a tricky area, not helped by HMRC’s vague guidance on the matter. There are VAT and corporation tax consequences depending on what classification you use so it is important to get it right. Generally, food and drink expenses incurred by a business can be categorised into […]
The process for administering and agreeing PSA has changed to reduce the burden for employers. From 6 April 2018, a PSA will be agreed between the employer and HMRC and will remain in place for subsequent tax years unless changed or cancelled by the employer or HMRC. This means that employers will no longer have […]
With the school summer holidays approaching, many businesses will look to employ young workers to help meet seasonal demands and to provide valuable work experience. Young workers have additional rights which must be followed strictly: Children below age 13 cannot work. Children aged 13 to 15 can only work part time. Children aged 16 or […]
With summer approaching, it is important to consider the affect of hot weather on the working conditions of your employees. Whilst there is no legal upper limit to temperature in the workplace, it must remain ‘reasonable’. What is considered reasonable must be judged against your particular work environment. The risks of high temperature must be […]
The tax treatment of termination payments changed from 6 April 2018 and further changes will come into effect in 2019. Pay In Lieu of Notice Employers now need to pay Income Tax and Class 1 National Insurance Contributions (NICs) on an element of all termination payments from 6 April 2018, whether or not they are […]
If you are planning to go on maternity leave from your employment, it is important to be aware of the dates which affect how much statutory maternity pay you will receive. The basic rules of pay are 90% of you average weekly earnings for the first 6 weeks and then the statutory figure of £145.18 […]
Employment law has developed to acknowledge that some individuals are not self-employed or employed, but are “workers” with some limited employment rights. In tax law there are still only two statuses: employed or self-employed. If an individual is a worker for employment law they are likely, but not necessarily, they will be self-employed for tax […]
Making sure your people feel valued is vitally important. People who feel valued tend to be more committed to their employers and also tend to go the extra mile, when necessary. One of the most important duties of any manager is to ensure that their team members feel that their work is appreciated. To ensure […]
Investing more in your pension on or before 5 April 2018 that payment can be taken into consideration in computing your 2017/18 liability and hence you might be able to claim to reduce your payments on account, if you make them. The maximum pension contribution is generally £40,000 each tax year, although this depends on […]
For most taxpayers the maximum pension contribution is £40,000 each tax year, although this depends on their earnings. This limit covers both contributions by the individual and their employer. Note that the unused allowance for a particular tax year may be carried forward for three years and can be added to the relief for the […]
Reforms to NICs will now take effect from April 2019 including abolition of Class 2. This had been previously announced to be from April 2018. This information is courtesy of 2020 As with all of our tax tips and web pages this information is necessarily summarised and of a general nature. If you would like […]
It is long established that training costs learning new skills is not tax deductible for self-employed. This is because costs of learning new skills is deemed by HMRC to be capital not revenue expense. The government are now consulting on extending the scope of tax relief currently available for work-related training costs. As with all […]
The rules for salary sacrifice arrangements changed with effect from 6 April 2017 and HMRC have updated their guidance for employers. Apart from 5 exceptions the amount assessed as employment income for new salary sacrifice arrangements is now the greater of the salary foregone and the taxable benefit as set out in the tax legislation. […]
The government are undertaking a consultation on shifting the burden in IR35 cases to private sector employers in the same way as has already been done for employers in the public sector. Please see our previous blog about shifting IR35 to public sector bodies here. As with all of our tax tips and web pages […]
As we have previously mentioned here, auto-enrolment of staff in workplace pension schemes now applies to even the smallest of employers, although there are exclusions. The current minimum contributions are 2%, with at least 1% from the employer. These are scheduled to increase to 5%, at least 2% from the employer, from 6 April 2018. […]
From April 2018 there will be no benefit-in-kind liability if you are charge your electric cars at your employer’s premises. As with all of our tax tips and web pages this information is necessarily summarised and of a general nature. If you would like detailed specific advice please contact us.
The general rule is that if the entertainment is provided only for directors (or partners) of a business the VAT incurred is not input tax. This is because the goods or services are not deemed used for a business purpose. The VAT therefore cannot be reclaimed on the VAT return. However, where directors and partners […]
On the first Monday in November each year, the voluntary living wage is increased. From 6 November 2017, the voluntary UK living wage has increased from £8.45 to £8.75 per hour. The London living wage has increased from £9.75 to £10.20 per hour. The annual November increases to the voluntary living wage do not affect […]
An employer can provide a gift to it’s employees over the festive period without it being a benefit in kind provided that it meets the following criteria: the cost of providing the benefit does not exceed £50 (or the average cost per employee if a benefit is provided to a group of employees and it […]
The Government’s Autumn Budget Day will be on 22 November 2017. There are reports that this may include: A reduction in the annual pension allowance from £40,000 to £30,000 as well as the tapered annual allowance for higher earners being reduced from £150,000 to £120,000. Pension tax relief could be cut for older workers to […]
For anyone in employment, you might have noticed a tax code on your payslip, most commonly 1150L. But what does this actually mean? Your tax code determines the allocation of your personal allowance against your income from that job. If you only have one job you will likely have 1150L tax code which means the […]
The queues when trying to contact HMRC by phone are often very long so this can be a frustrating and time consuming process. Most departments now offer a WebChat service where you can communicate with an advisor online. This method also has the advantage of being able to save your conversation so that you have […]
Auto enrolment does not apply if a company is not considered an employer by The Pension Regulator. Reasons for not being an employer include: Director only company, none of the directors have an employment contract No longer employ any staff Ceased trading, Although you will not have any auto enrolment duties you must inform The […]
From the 1 October 2017 all new employers will immediately have legal duties due to Auto Enrolment. These duties will apply from the first day an employee starts working for you. Please visit The Pension Regulator website to find out about your duties as a new employer. If you fail to comply with these duties then […]
Working parents can start applying for two new Government childcare schemes that are now launched. This new scheme is designed for working families, including the self-employed, in the UK. For every £8 you pay in, the government will add an extra £2, up to £2,000 per child, or £4,000 per year for disabled children under […]
This is a reminder that from 6 April 2016, benefits are exempt from tax and NICs if all the following conditions are satisfied: · the cost of providing the benefit does not exceed £50; · the benefit is not cash or a cash voucher; · the employee is not entitled to the benefit as part […]
From 6 April 2017 HMRC will be updating tax codes on a much more regular basis. For some employees this could mean a new tax code every month. The aim of this change is to ensure employees pay the correct tax, or benefit from tax relief and refunds, during the tax year. If we prepare […]
The House of Commons Work and Pensions Committee has recently published a report calling on the Government to close the loopholes that allow “bogus” self-employment practices, which burden the welfare state but reduce the tax contributions needed to sustain it. This follows the Matthew Taylor inquiry which took evidence during February and March 2017 from […]
HMRC have recently updated their toolkit dealing with the reporting of expenses and benefits provided to employees and directors in the light of significant recent changes in this area. HMRC toolkits are designed to help minimise the risk of errors in returns and computations and their use, although voluntary, will be taken into consideration in […]
A scheme using Employee Benefit Trusts (EBTs) as a means of remunerating directors and staff whilst avoiding tax has been defeated by HMRC in a recent Supreme Court case. Such schemes had been used by many employers to avoid PAYE and national insurance contributions (NICs) and involved complicated trust structures and “loans” to the employees. […]
From 5 April 2017 HMRC has introduced an apprenticeship levy. The levy is charged at 0.5% of the businesses total payroll cost and applies to all businesses operating payroll. Each business receives a £15,000 allowance each tax year which means that they do not have to pay the levy until 0.5% of their payroll […]
The current minimum pension contributions for employees inside Auto Enrolment are 2%, with the employer being required to contribute at least 1%. From 6 April 2018 the minimum contributions will increase to 5%, with the employer required to contribute at least 2%. This will increase further to 8% from 6 April 2019 onwards, […]
All National Minimum Wage / National Living Wage rates revised from 1 April 2017. This is in addition to the rise on 1 October 2016. The new rates from 1 April 2017 will be: Year 25 and over £7.50 0 21 to 24 £7.05 18 to 20 £5.60 Under 18 £4.05 Apprentice £3.50 Some tips […]
Philip Hammond has announced that the planned national insurance rise for the self employed has been scrapped at least for the current parliament. He has said he will announce how extra funds will be raised in the autumn statement. Meanwhile Theresa May has said the government await the Taylor report on the future of employment. […]
There has been much lobbying from the small business sector to reduce business rates. The Chancellor stated that 600,000 small businesses currently benefit from small business rates relief. He announced that no small business that is coming out of small business rates relief will pay more than £600 more in business rates this year than […]
The chancellor also announced that the new tax-free childcare scheme is due to start in 2017. The scheme will provide up to £2,000 a year in childcare support for each child under 12 where the parents save in a special account. If they save £8,000 the government will top up the account with 20% to […]
Salary sacrifice arrangements are where employees give up some part of their salary in return for an employer provided benefit. These are often tax efficient as the benefit chosen is often a no or low tax benefit in kind. We posted more details on salary sacrifice as a FAQ here. Changes announced in 2016 Budget […]
These are the suggested reimbursement rates for employees’ private mileage using their company car from 1 December 2016. Where there has been a change the previous rate is shown in brackets. Engine Size Petrol Diesel LPG 1400cc or less 11p 7p 1600cc or less 9p 1401cc to 2000cc 14p (13p) 9p […]
New tax-free childcare accounts were announced in 2014 to replace the employer-provided childcare voucher scheme. Introduction has been delayed by legal disputes with organisations involved in administering the existing scheme, but the new accounts will at last be introduced on a trial basis in early 2017. The new scheme will then be rolled out across […]
Paying for directors and staff entertainment generally creates a taxable benefit on the individual. However annual parties can be paid for tax free. The criteria includes there being a cap on costs of £150 per head. This can include food, drink, travel and accommodation. The total cost of the party including VAT, is divided by […]
The current UK Living Wage is £8.45 an hour The current London Living Wage is £9.75 an hour These are voluntary rates – more information at http://www.livingwage.org.uk/ The current National Living Wage (legal minimum for most workers) is £7.20 per hour. All current legal minimum wage rates are here.
The crux of the recently highly publicised Uber case is the question of who is supplying the end client. Uber argued it was the drivers supplying the end client: Client buys service (transport) from driver; driver buys service from Uber (logistics). (Uber just an agent) The Employment Tribunal found that it was Uber supplying the […]
Ever since 6 April 2015 employment agencies and other intermediaries have been required to make quarterly reports of payments made directly to workers or via partnerships, LLPs and companies where no tax has been deducted from the payments. These requirements apply if you supply a person rather than supply a service. If your client needs […]
Employers can now give employees small gifts costing up to £50 without fear of a tax bill. This could be for an anniversary, a birthday or because the sun is shining – anything as long as it is not a reward for services. We originally blogged back in December 2015. The main rules for gifts […]
The new National Minimum Wage rates apply from 1 October 2016. Details of new NMW rates on Gov.UK. The new rates from 1 October 2016 are: 21 – 24 year olds – NMW will increase from £6.70 to £6.95 per hour 18 – 20 year olds – NMW will increase from £5.30 to £5.55 per […]
HMRC have taken to naming and shaming those not paying the full national minimum wage. If you are a sole trader, partnership or any kind of company with shares, or operating a social enterprise with a profit motive, then you cannot avoid NMW by classifying your workers as voluntary. The latest rates (from 1.4.16) are: […]
If an employee address changes then you should encourage them to inform HMRC of this. This can be done at www.gov.uk/tell-hmrc-change-of-details. This helps to ensure that the tax they pay is accurate.
From April 2016 there will be 2 student loan plan types known as Plan 1 and Plan 2. Each plan will have a different threshold before loan repayments are made. For the tax year beginning 6 April 2016, the thresholds will be £17,495 for Plan 1 and £21,000 for Plan 2. HMRC […]
A reminder that the employment allowance will be £3000 this coming year (2016/17) up from £2000. However for the first time, single person employers will not be eligible for the employment allowance this year. David Wilsdon
From 6 April 2016 PAYE legislation is changing. If you intend or already payroll benefits and expenses you must register them with HMRC using the online Payrolling Benefits in Kind (PBIK) service. If you use this service and payroll benefits and expenses you won’t have to report them on a P11D. If you do not […]
The Auto Enrolment staging dates for many businesses is approaching. Below summarises the key points you should be aware of. Key points Your staging date is when the Automatic Enrolment duties come into force for your business. You’ll need to identify what your duties are for each member of staff on your staging date or […]
Under RTI the end of year form P35 was replaced by the Final Full Payment (FPS) submission. Send your final FPS on or before your employees’ last payday of the tax year (5 April) instead of the old 19 April deadline. Remember to put ‘Yes’ in the ‘Final submission for year’ field in your payroll […]
The Government announced at Autumn Statement 2015 that the current two year temporary reporting relaxation will end as planned on 5 April 2016. The relaxation permitted employers who at 5 April 2014 employed no more than 9 employees, to report their PAYE information for the tax month ‘on or before’ the last payday in the […]
A reminder that from April 2016, the national living wage will be £7.20 an hour for workers aged 25 and older. The minimum wage will still apply for workers aged 24 and under. For full details of all national minimum wage (NMW) rates check https://www.gov.uk/national-minimum-wage-rates Note that all workers including interns generally have to be […]
For the past two tax years (2014-15 and 2015-16) most employers have been able to reduce their employers national insurance bill by £2000. We have applied this to all clients that we prepare payroll for. For the next tax year (2016-17) the employment allowance increases to £3000. However there will be a restriction which prevents […]
The government intend to legislate that trivial benefits in kind, where the cost to the employer is no more than £50, will not need to be reported in future and will be exempt from tax. HM Revenue and Customs raised concerns that some directors of family companies might abuse the new rules and have insisted […]
The minimum pension contributions under Auto Enrolment were set to increase in October 2017 and October 2018. These dates have been pushed back to April 2018 and April 2019. Full details are: Until 5 April 2018 – 2% total of which at least 1% from the employer From 6 April 2018 – 5% total of […]
You can ask HMRC Clearances Team to confirm the tax and NICs implications of a salary sacrifice arrangement once it is in place. However, this is not a requirement. HMRC would want to see: evidence of the variation of terms and conditions (if there is a written contract) payslips before and after the variation […]
Single person companies will not be able to claim the employment allowance from April 2016. The employment allowance is a reduction of employers national insurance of up to £3,000. It is not yet clear whether taking on a new employee, perhaps part time or short term, will be sufficient to reinstate the allowance.
We routinely get a dispensation in place for our payroll clients. This is a notice from HMRC that removes the requirement for the employer to report certain expenses at the end of the tax year on forms P11D or P9D. In order to have the dispensation in place HMRC require that your company has systems […]
The adult National Minimum Wage (NMW) rate is currently £6.70. From 1 April 2016 a new National Living Wage (NLW) for workers aged 25 and above will come into force which will initially be set at £7.20. For employee aged 21 to 24 the NMW will still apply.
A further consultation taking place this summer is into the simplification of the tax and national insurance treatment of termination payments. There is a widespread but mistaken belief among employees and employers that the first £30,000 of any pay-off is not subject to income tax and NICs. This often leads to difficulties when employees discover […]
An area of your business which may need some clarification is when you are calculating holiday entitlement of your employees. An important thing to note is that employees cannot be paid “holiday pay” on top of normal pay. Instead, holiday has to actually be taken off work. In effect, the employee is effectively paid as […]
The most radical announcement by the Chancellor on 8th July was a significant reduction in the amount the government plans to spend on tax credits and other State benefits. At the same time he announced that there would a new national living wage to be paid by employers, rising to £9 an hour by 2020. […]
Always be suspicious of any email mentioning a refund from a “tax credit office agent”. Look out for links to fake version of the GOV.UK website. Never provide details or similarly sensitive information on the basis of an email request. HMRC’s director general of benefits and credits, Nick Lodge, HMRC, said the department never asks […]
In his March 2014 Budget, the Chancellor announced that there would be significant changes to allow individuals to have greater access to their pension funds from 2015. The proposed changes have been consulted on during the summer and the Treasury have now published the outcome, together with draft pensions legislation, enabling the new flexible regime […]
HMRC have announced that the start date for RTI late filing penalties for PAYE schemes with fewer than 50 employees has been postponed until 6 March 2015. The start date had originally been scheduled for 6 October 2014. HMRC have said that the extra time will give smaller employers, who appear to be experiencing the […]
Earlier this year, HMRC announced that the RTI penalties for late returns of payroll information (RTI) would start from October 2014 instead of April 2014. If you operate your own payroll, make sure that your RTI submissions are made on time to avoid an automatic penalty. Remember that the RTI submission should normally be made […]
Anyone with an open enquiry (or appeal) concerning a tax avoidance scheme may be issued with follower notices and accelerated payment notices under new legislation in Finance Act 2014. It is understood that 43,000 payment notices will be issued by HMRC (33,000 to individuals and 10,000 to corporates) and will cover about £7.1 billion of […]
The Office of Tax Simplification is seeking to make the current tax rules for dealing with travelling and subsistence claims clearer for both employees and employers. As a result, the treasury are consulting on possible changes to the rules and the way that such expenses are reported. The government intends for any new rules to […]
Relocation packages provided by an employer will not normally be liable to tax provided that the employee’s relocation is permanent.
Changes in the Finance Act 2014 have tightened up the rules for “self-employed” workers supplying their services through UK agencies, employment businesses and other intermediaries. From 6 April 2015 the agency must decide whether the way in which the worker does their work is subject to (or to a right of) supervision, direction or control […]