2014 NIC Employment Allowance

The Chancellor announced the creation of a NICs Employment Allowance in the 2013 Budget. The implementation date for this is planned for 06th April 2014.

Businesses, Charities and Community Amateur Sports Clubs will be able to reduce their NICs bill by up to £2,000 per year. The Employment Allowance is to be set against an employer’s liability for secondary Class 1 National Insurance Contributions (NICs) only, not against other NICs such as primary (employee’s) Class 1, Class 1A or Class 1B contributions.

The greatest benefit of this allowance goes to small businesses, as it will reduce their National Insurance Contributions bill the most. Over 90% of the benefit of this allowance will go to small businesses with fewer than 50 employees.

This will also mean that businesses will be able to employ four adults or ten 18-20 year-olds full-time on the National Minimum Wage without paying any employer National Insurance contributions at all.

The claim process for eligible employers is very straightforward and is administered through the payroll;

• Employers will include a flag, within their Employer Payment Summary (EPS) submission via RTI, notifying HMRC that they are claiming the employment allowance.
• The employer then reduces their employers NIC liability until the £2,000 allowance is exhausted (up to a limit of their NI liability, i.e. without resulting in a refund position) on the actual EPS.

The Employment Allowance calculator allows you to see the effect of the Employment Allowance in 2014. For example, you can see the effect on your National Insurance Contributions bill of employing one additional person or you can look at the reduction to your current National Insurance Contributions payments. Simply follow the link to access the calculator;

http://www.employmentallowance.com/allowance-calculator/

Posted byKaren McDarbyinNICPayroll Software

Auto enrolment and BrightPay

You have probably heard about automatic enrolment by now. If you don't yet know what it is, or if you need a quick reminder, there is a very helpful guide to automatic enrolment at The Pensions Regulator website.

What is my Staging Date for Automatic Enrolment?

The staging date is when you must automatically enrol your employees into a qualifying pension scheme.

You can find out your staging date at the Pensions Regulator website link given above. If you have less than fifty employees, your staging date will be no earlier than 1st August 2015 (subject to very few exceptions).

If need be, you can postpone your obligations for a further three months from your staging date.

Will BrightPay support Automatic Enrolment?

The Pensions Regulator Automatic Enrolment guide suggests that supporting software should:

• enable you to assess your workforce (existing and new employees), monitor eligibility criteria, and enrol staff into a qualifying pension scheme 
• allow the postponement of auto enrolment for relevant employees 
• calculate pension contribution amounts 
• handle opt-ins and joining 
• handle opt-outs and refunds 
• support you in generating and issuing communications to your staff 
• keep records and provide reports 
• interoperate with some or all pension scheme provider systems for information/payment submissions 

BrightPay 2014/15 will support all of these requirements. We plan to initially provide interoperability with NEST, and will be working with other providers as time goes on.

If automatic enrolment is not relevant for you in 2014/15, the only changes you will notice in BrightPay are that you may be asked to enter your staging date, and that the completion of the date of birth field will be mandatory for all employees.

Will there be an additional charge for Automatic Enrolment functionality in BrightPay 2014/15?

No. We will continue to offer the same simple pricing model, including free support.

Please keep an eye on our blog for further updates on automatic enrolment and how it works in BrightPay.

If you have any more questions, please call or email us. We are confident that automatic enrolment will be easy with BrightPay.

Posted byPaul ByrneinAuto EnrolmentPayroll Software

HMRC January 31st Deadline - odd excuses!

If you miss the 31st January tax deadline…consider your excuse to HMRC

31 January deadline for online tax returns
You must send, and pay your tax liability, your online Self Assessment tax return for 2012-13 by Friday 31st January 2014. If your online tax return is late, you will have to pay a penalty.

Exception – Reasonable excuse for missing the deadline
If you miss the 31st January deadline you may not have to pay a penalty if you have a reasonable excuse. For example, there may have been an unexpected or unusual event, beyond your control, which meant you couldn’t send your return on time.

HMRC recently reflect on top 10 oddest excuses
HMRC recently revealed the 10 oddest excuses they received for submitting late tax returns, assume these are considered unreasonable….

The following bizarre, exotic and flimsy excuses have all been used by tardy taxpayers:
1. My pet goldfish died (self-employed builder)
2. I had a run-in with a cow (Midlands farmer)
3. After seeing a volcanic eruption on the news, I couldn’t concentrate on anything else (London woman)
4. My wife won’t give me my mail (self-employed trader)
5. My husband told me the deadline was 31 March, and I believed him (Leicester hairdresser)
6. I’ve been far too busy touring the country with my one-man play (Coventry writer)
7. My bad back means I can’t go upstairs. That’s where my tax return is (a working taxi driver)
8. I’ve been cruising round the world in my yacht, and only picking up post when I’m on dry land (South East man)
9. Our business doesn’t really do anything (Kent financial services firm)
10. I’ve been too busy submitting my clients’ tax returns (London accountant)

All of these people and businesses received a £100 penalty from HM Revenue and Customs (HMRC) for filing late. They appealed against the decision using these excuses, but were unsuccessful.

Read more at www.gov.uk >

Posted byKaren McDarbyinHMRCPayroll

Changes to UK Employer Payment booklets and letters

This message is to advise employers, agents and payroll providers of a significant change to Employer Payment booklets and letters.

The changes will affect the following documents:

• Employer Payment Booklet (P30BC) - when making a PAYE payment using a pay slip through the post or over a bank or post office counter
• Paying PAYE electronically (P30B) - letters issued to customers about paying electronically
• Paying PAYE (P30B Annual) - letters sent to customers who pay us only once a year using a pay slip

These documents will no longer carry the name, address or phone details of the issuing office. This will apply for:

• the remaining months of the 2013 to 2014 tax year
• the whole of the 2014 to 2015 tax year
• all future years

Each individual document gives guidance on making payments.

The pay slips within the booklet or attached to the P30B Annual letter contain addressed reply envelopes for sending the payment in the post.

The Paying PAYE electronically letter explains how to pay by electronic methods and carries the necessary details and information for making payment.

Posted byAnn TigheinPayroll Software

Employers facing increase in sick pay costs!!

From 6 April 2014, employers will no longer be able to recover payments made for Statutory Sick Pay (SSP). HMRC has made the decision to abolish the Percentage Threshold Scheme (PTS), which is the scheme in place to provide SSP compensation for employers.

Currently an employer is entitled to recover some of the SSP paid to their employees if the total SSP paid in a tax month is greater than a set percentage of their gross Class 1 NICs (employers’ and employees’) liability for that month

Although PTS is being abolished from April 2014, employers will still be able to make claims for reimbursement of SSP under PTS (paid for sickness periods up to 5 April 14) until the end of the 2015/16 tax year.

In addition, the associated SSP record-keeping requirements will also be abolished at the end of 2013/2014. However, employers will still be required to maintain records for PAYE purposes and to demonstrate they are meeting their SSP obligations.

The decision to abolish PTS was made as a result of an independent review which found that the current scheme does not support the proper management of sickness absence in the workplace.

The Government has therefore decided to reinvest the money in a new Health and Work Service (HWS), due to be introduced by the end of 2014. The aim of this service will be to:

• help employees who have been on sickness absence for four weeks or more to return to work,
• support employers to better manage sickness absence among their workforce,
• give GPs access to work-related health support for the patients.

Employers, who want to avoid being faced with increasing costs, need to look carefully at how they manage sickness absence in their workforce. The first point of action will be to implement, or review, the company sickness policy.

Posted byLaura MurphyinCompany HandbookContract of employmentNICPayroll Software

HMRC and their new call handling

HMRC have recently introduced a new way of handling calls on some of their helplines and they are looking for Employers to offer their feedback through a short survey.

The new system is called Intelligent Telephony Automation or ITA. HMRC say that this new technology will help improve the handling of calls, instead of being offered different options or pressing different buttons the system will recognise and react to what the customer says. The customer will be put onto the correct adviser for their question even if they have called an incorrect telephone number.

HMRC are also automating elements of the security process, based on the information that the customer provides the system, the adviser will know why they are calling and whether or not the customer has passed security. HMRC are hoping that this will speed up the time that advisers spend with customers and it will allow them to focus on the issue and the call could be completed a lot quicker.

This new system will prompt customers to say a few words and the reason for their call. It is designed to recognise key words or phrases such as Maternity/RTI/P45 and can forward the call onto the correct Adviser or ask further questions if required. HMRC say the system has been widely tested with all accents from all over the UK. The HMRC would like customers that have called the helpline and have used the ITA system to complete a short survey by Friday 29th November to give their feedback and to see if there are any ways that the system could be improved.

Posted byDenise CowleyinHMRC

Knowing your responsibilities as a UK employer re student loan deductions

With the increased amount of students entering the workplace owing close to £30000 (for tuition fees averaging £9000 a year along with living costs) it could be many years until a student debt is repaid. Once an employee has commenced employment student loan deductions will be taken at source from their pay and sent by their employer to HMRC so the sooner this begins the sooner the student loan is paid off.

When should an employer begin taking student loan deductions ?

1. When a receipt is received from HMRC of a start notice SL1 informing the employer from when they should start taking the student loan deduction.
2. The employee has a P45 from a previous employer and there is a yes ticked beside liable for student loan or any other mark at item 5 on the P45.
3. If the employee does not have a previous P45 they must complete a starter checklist (similar to a P46 form) one of the questions asks if the student has a student loan that has not been fully repaid and is not being repaid directly to the students loan company. If the employee answers yes student loan deductions are now due.

Where an employee does not provide a P45 to their new employer and a starter checklist is filled out the employee may not admit to having to pay a student loan so the preferred option to set up a new employee would be to receive the P45 from the previous employer or a start notice SL1 which they would receive from HMRC.

Posted byDenise CowleyinPayroll Software

110,000 UK parents silent on Child Benefit Claims

10% of 1.1m people affected by High Income Child Benefit Charge have still not contacted HMRC and could face losing the benefit and receive penalties.

Parents on individual salaries of £50,000 or higher were required to either opt out of receiving Child Benefit or register for Self Assessment by the October 5^th deadline, in order to avoid financial penalties. Families in which parents each earn less than £50,000 are likely to continue to receive child benefit without having to pay the money back.

Penalties will be raised on a case by case basis and depending on the circumstance, the penalty could be reduced to zero, however tax would still be applicable.

It must also be noted that eligibility for child benefit depends not just on earnings but on "adjusted net income". This includes all taxable net income, including rental income and investments. bonuses and benefits in kind.

Posted byAnn TigheinHMRC

2014 National Insurance: £2000 Employment Allowance

From 2014 every business, Charity and CASCs (Charities and Community Amateur Sport Clubs) will be entitled to an annual “employment allowance” of £2000 to reduce their liability for Class I secondary NICs.

It is expected that up to 1.25 million employers will benefit, with over 90 per cent of the benefit going to small businesses with fewer than 250 employees and it is envisaged that on average, employers with fewer than ten employees will see their employer NICs bill reduced by 80%.

To simply matters HMRC will introduce a new tick box on EPS referring to the employment allowance in the form of a “yes/no” indicator. 

To claim the allowance, the employer will have to signify his intention to claim by completing the yes/no indicator just once.  The employer will then offset the allowance against each monthly Class 1 secondary NICs payment that is due to be made to HMRC until the allowance is fully claimed or the tax year ends.

This  Employment Allowance will apply per employer regardless of how many PAYE schemes that employer chooses to operate.

Posted byAnn TigheinPayroll Software

BrightPay shortlisted for AccountingWeb Software Satisfaction Awards

We are delighted to let you all know that we have been shortlisted by AccountingWeb for their Software Satisfaction Awards – Payroll Category. We would like to say a big thank you to all of our BrightPay customers that gave such positive feedback which has resulted in us being shortlisted. Customer satisfaction is paramount to us here in BrightPay. We will strive to ensure the highest level of customer satisfaction both in our product and service at all times.

The winners will be announced on the 7^th November so wish us luck!

http://www.accountingweb.co.uk/article/software-satisfaction-awards-shortlists-revealed/548792

Posted byCaroline MaloneinAwardsPayroll Software