Category Archives: Payroll

The Apprenticeship Levy

shutterstock_305418650The new apprenticeship levy will have its challenges but have you considered the benefits of this new legislation when it comes into effect in April 2017?

The Government have already made their mark by abolishing the employers’ National Insurance Contribution (NIC) for apprentices under the age of 25 back in April 2016. This new levy is part of their commitment to increase the quality and quantity of apprenticeships available in England  in order to reach their goal of 3 million by 2020.

The Levy will be payable on payroll bills of over £3 million per year at 0.5%. This will affect many businesses, who perhaps haven’t even considered apprenticeships for some time.

All employers will receive an allowance of £15,000 to be offset against the payment of the levy.  This levy “pot” is then to be used on apprenticeship training and assessments from an approved provider only.

The Government will top up levy contributions by 10%.

The payments for apprentices studying English and Maths will be paid direct to the providers and not taken from the levy payments.

This is essentially another tax. However, businesses can benefit from this by utilising the levy to upskill existing team members. There is a huge employment demand upon us with nearly 21,000 people due to retire in the next few years.

Don’t waste this opportunity – look into your options now and prepare.

If you’re not sure whether the levy will affect you and want advice on this or other payroll matters, please contact Julie Mason at julie.mason@pmm.co.uk or call 01254 679131.

 

HMRC to take tax debts from pay packets

HMRC tax debts from pay packets

HMRC are set to take tax debts from high earners’ pay packets, under new powers that come into force later this week. This measure was discussed in the 2013 budget and implemented through secondary legislation. It means that HMRC will be able to collect up to £17,000 a year of tax debts directly from pay packets, which is a significant increase from the current limit of £3,000.

The change is expected to raise £115m in the 2015-16 tax year and has been overshadowed by new HMRC powers to recover debts directly from bank accounts. Despite receiving intense criticism, HMRC continues to defend its crackdown. The matter may end up being decided by the next government, as the May general election is likely to result in a reduced Finance Bill.

It should be noted that this proposal has been introduced on a sliding scale, consequently only individuals earning more than £90,000 would face a £17,000 deduction and this will not affect those earning less than £30,000, who will still be subject to the £3,000 limit. HMRC have also issued a guarantee that it would not take more than half the salary of those concerned. This new measure has caused less controversy than the plans to deduct the money straight from bank accounts, as it spreads the payments over the year via a PAYE coding notice.

Experience would suggest that once HMRC start interfering with your PAYE code number it can easily get confusing therefore those affected should seek advice and also take care to ensure it is removed from the code for the following year.

For advice on this, or any other tax issues, contact Jane Parry jane.parry@pmm.co.uk or any member of the tax team.

SME Finance Update: Payroll and Employment News April 2014

2014-04-09 16.32.37

The PM+M payroll team – hard at work!

There are 4 key things you and your business need to be aware of this April:

1. Employment Allowance

Don’t miss your chance to claim the new Employment Allowance – The Government have introduced the new tax cut for businesses and charities and could take up to £2,000 off your employer National Insurance Contributions (NICs) from 6th April 2014.

The allowance will be available to eligible businesses and charities, regardless of size and can be claimed back through your payroll processes by notifying HMRC you are claiming this on your RTI submissions.  Claims can be made up to 4 years from the date the allowance applies.

The Employment allowance is only applicable to employer class 1 NICs and cannot be used against Class 1A, Class B NICs or offset against late payment penalties or interest.

There is only one allowance per employer, no matter how many PAYE schemes you operate. If you operate more than one company, you can choose which scheme takes advantage of the allowance.

The new Employment Allowance is intended to be an incentive for Job creation and assist in the recovery of the private sector. Although, you may spend this saving how you please.

The allowance will give the employer the opportunity to employ someone with a starting salary of up to £22,400 without paying any employer NICs at all.

2. Student Loan Deductions

The repayment threshold has risen from 6th April 2014 in line with the Retail Price Index.  Therefore a Plan 1 loan is repaid at 9% of NIC’able pay above the threshold being £16,910 per annum. (Or £1,409.16 per month or £325.19 a week.)

3. Statutory Sick Pay – Percentage threshold Scheme

From the 6th April 2014 the percentage threshold scheme has been abolished and the recovery of Statutory Sick pay (SSP) will no longer apply.

Unfortunately this change does not affect an employer’s responsibility to Pay SSP and retain SSP records to show they are meeting employer obligations, but records may now be kept in a way that suits the employer.

4. New Absence Rates for 2014/15

Statutory Sick Pay (SSP) – £87.55 per week

Statutory Maternity Pay (SMP) – Higher Rate: 90% of average weekly earnings for the first 6 weeks

Statutory Maternity Pay (SMP) – Lower Rate: the lower of £138.18 per week or 90% of average weekly earnings

Statutory Adoption Pay (SAP) – Lower of £138.18 per week or 90% of average weekly earnings

Ordinary Statutory Paternity pay (OSPP) – Lower of £138.18 per week or 90% of average weekly earnings for a maximum of two weeks.

If you have any questions or would like further information please drop me (Julie Mason) an email: julie.mason@pmm.co.uk or call: 01254 604311.

I’d love to hear your feedback on our April update, so feel free to leave a quick comment at the bottom of this post.  And, if you found this information useful you can use the social sharing icons to share this post on social media platforms.

We’ll be back soon with another payroll and employment news update.

Julie Mason – Payroll Services Manager, PM+M Accountants

The future is bright…………the future is e-Payslips

Have you considered going green with your employees’ payslips?

Not only would you be helping the environment, but it is a more cost effective and secure way of supplying your employees with their payslips.

If you currently hand deliver payslips, consider not having to walk around the building handing payslips out, not having a collection of them building up in your drawer.  Your time can be better spent focusing on your business.  Similarly, if you post them, think of the regular postage cost and the risk of things going astray occasionally.

ePayslips are a brilliant solution to all of this.  Simply opt for ePayslips and these can be uploaded to a secure portal for your employees to retrieve electronically.  The service is easy to use, secure, cost effective and eco-friendly.

ePayslips will be available at each pay frequency on the published date, that you, the employer specify.  Employees will have their own employee ID and PIN.  The ePayslips website will retain historical payslips within the employee’s record and these will be stored there for future viewing and printing.  ePayslips also has an employer view which will enable you to get an overview of ePayslip information held on the internet.

Make it your own – you can personalise the payslips to your business and can add your company logo.

ePayslip on the go……. Employees are now able to view their ePayslips on a mobile device.

 

Make your life easier and call our Payroll Team to set up on 01254 604311.

Julie Mason – Payroll Services Manager

How much do you really know about the Construction Industry Scheme?

Are you a contractor or an employer?

Do you have time to check your subcontractor’s status with HMRC?

Are you struggling to keep up with providing statements?

Then there’s the monthly returns to be sumitted to HMRC by the 19th of each month, not to mention the fines if it’s late!

The construction industry tax regulations are only relevant when all 3 of the below elements are present:

  1. Construction Operations
  2. Self Employed Subcontractor (or Subcontractor Company or partnership)
  3. Contractor

One of the main points to consider is whether an individual subcontractor is really self-employed. If you get this wrong, it could become very costly.

If the indicators below are present then the individual is likely to be an employee:

  1. Set Hours
  2. Timesheets
  3. Paid an hourly rate
  4. No substitute allowed
  5. Contractor controls the individual
  6. Contractor pays for all the individual’s tools and equipment

Furthermore if there is a mutual obligation in that there is an on-going obligation to offer work on a regular and continuing basis by the contractor to the individual and there is an obligation for the individual to accept, carry out and perform all the work offered then the individual is highly likely to be an EMPLOYEE.

An individual is regarded as a self employed subcontractor if, under the contract, he is under a duty to the contractor to carry out the operations, or to furnish his own labour and some or all of the below apply:

  1. No Timesheet
  2. Flexibility
  3. Minimal control by the Contractor
  4. A substitute may be sent in an individual’s place
  5. The individual is paid on completion of work
  6. The individual provides and pays for his own tools

Once you have determined if the individual is a true subcontractor, you then have to check their status with HM Revenue and Customs by verifying their personal details and UTR number.  HM Revenue and Customs will then confirm how you should tax the subcontractor.

All of this can take time that might be better used running your business.  Add on to this the risks of getting it wrong and incurring penalties and it makes outsourcing your CIS returns to us an easy decision.

Let us prepare your subcontractor returns – we will provide the subcontractors with statements each time they carry out work for you and we will submit your electronic returns to HM Revenue and Customs by the 19th of the following month.  Saving you time, hassle and money and giving you peace of mind.

For more information contact Julie Mason on Julie.mason@pmm.co.uk or 01254 604311

Real Time Information and its Effect on SME’s – Video Blog

Real Time Information is a new initiative introduced by HMRC in April 2013 to help streamline the process of payroll for all businesses. In this blog our Payroll manager Julie Mason explains what it means for SME’s and what you should be doing now to prepare.

Key points from the video are:

  • If you have less than 50 employees, DON’T PANIC. The RTI compliance deadline has recently been extended to 6th April 2014 for smaller employers.
  • Even though the deadline has been extended, look at putting proceedures into place now. Keep on top of your employee data and PAYE liability payments and prepare for the changes well in advance.
  • Look at outsourcing your payroll function if you feel it is going to be too difficult to keep on top of.

How are you finding the transistion to RTI? Have you encountered any issues, and what would be your top tips for overcoming them? Leave a comment below, we’d love to hear from you!

Run My Business to Offer Hosted Online Accounting Packages

Our Run My Business service will soon be offering a cloud accounting solution.

This secure online package will enable clients to access and record sales and expenses online from work, home or on the go and will provide valuable real-time information to enable them to focus on growing their business.

If you would like more information about this solution, or would like to speak to someone about our Run My Business service, visit our website or call 01254 679131.

Forms P11D for the Year to 5th April 2013

Employers will need to submit 2012/13 P11ds to HMRC by 6th July 2013.

The rules surrounding employee benefits are complex and it is very easy to miss reporting a benefit –
leading to incorrect P11ds and, possibly even, penalties.

HMRC are increasing their activity in the form of visits to examine employers’ documentation which
supports the treatment of expenses and benefits on P11ds. In particular, an Inspector will ask to see:

· Petty cash vouchers, purchase ledgers and expenses claim forms.
· Mileage records.
· Details of client and or staff entertainment events.
· Where fuel is provided for owner/user vehicles – records of reimbursement of fuel expenses.
· Analysis of directors’ loan accounts

The Inspector will target the documentation as a source of establishing additional tax and national
insurance liabilities.

You need to be sure that your records are robust enough to support your payments of tax free
expenses, claims that no private fuel or private use of vehicles should be charged and that no benefits
arise to employees through client entertaining.

You also need to make sure you have reported all benefits and not omitted any.

If you would like assistance in completing P11d’s, or advice on benefits and expenses issues,
dispensations or PAYE settlement agreements, please contact your usual tax adviser at PM+M or
contact Julie Walsh on 01254 604312, or email julie.walsh@pmm.co.uk

Our new improved fee protection insurance for 2013/14 covers our costs in supporting you through
PAYE visits by HMRC. If you are interested in fee protection insurance to cover our fees and protect
you from the costs of dealing with such visits, do contact Julie Walsh.

 

Are you Ready for RTI?

From October 2012, HMRC began implementing a radical change in how payroll information must be reported to them.

Real Time Information (RTI) is aimed at improving the operation of PAYE by closing the “tax gap”, improving the customer experience and reducing costs to HMRC. Whether it will reduce or increase costs for
employers remains to be seen.

If you currently process your payroll inhouse, you will need to make some changes to accommodate RTI. Accounting software will need updating, data – including a monthly Employer Payment Summary – will have to be submitted to HMRC each time you run a payroll, and to avoid submission failures (which could incur costs) information you submit for employees must be correct each time.

What you need to be thinking about:
• What will be the impact on your business processes?
• What do you need to do to prepare?
• When should you start preparing?
• What extra resource will be required?
• Who do you need to involve, e.g. payroll software provider/IT department, BACS approved software service, HR, finance, employees, bureau/agent?

RTI may help to streamline HMRC’s systems, but it could wreak havoc for SMEs as the sheer frequency with which the information must be sent through to HMRC could prove hugely time-consuming and disruptive to employers who have not got their systems set up.

Many businesses are still not prepared for this change, if you are one of them, we are hosting a series of workshops that may be beneficial. For more information, click here.

Alternatively, if you would like further information on how the introduction of RTI may affect your business, please contact our specialist payroll team on 01254 679131.