Jun 2021
21
Avoid penalties & pay HMRC within 90 seconds (even on weekends)
The late payment of income tax, National Insurance Contributions (NIC), student loan deductions and income tax due under the Construction Industry Scheme (CIS) can lead to penalties for employers and contractors of all sizes. With so much to think of when running a business, forgetting to pay your PAYE bill on time each period, can end up costing you.
Penalties for overdue payments:
Your bill must be paid by the 22nd of the next tax month if you pay monthly or by the 22nd after the end of the quarter if you pay quarterly. It can be easy to forget to pay on time, especially if you pay by card online, by Bacs or by cash or cheque at your bank, as with these methods you will need to allow 3 business days for your payment to process. If you are paying by direct debit for the first time you will need to give 5 business days for your payment to process and once set up, this method takes 3 business days to process. The waiting time for payments to process means payment deadlines can easily be missed, especially when weekends and bank holidays need to be considered.
What steps can you take to insure you don’t miss payments to HMRC?
Choose a payroll software that displays amounts due and keeps track of payments to HMRC
Your payroll software should facilitate the recording of payments made to HMRC. BrightPay is a payroll software which has a HRMC Payments tab from which you can view a detailed summary of your tax, NIC and student loan liabilities for the current period. From here you can also add any CIS deductions, tax refunds from HMRC or any funding from HMRC which may apply. Your amount due to HMRC will be displayed, and once a payment has been made, you can enter the amount paid and payment date.
Having this function in the payroll software serves as a reminder to payroll processers to send their payments to HMRC.
Pay HMRC directly from your payroll software - within 90 seconds
As mentioned above, certain methods of making payment to HMRC can take between 3 to 5 business days to process. If the deadline falls on a weekend or bank holiday you must make sure your payment reaches HMRC on the last working day before it. The only method of payment that can guarantee same day payment to HMRC, even on the weekend or bank holidays, is when you make payment by Faster Payments.
New to BrightPay this year is an integration with payments platform Modulr. Since March, our customers have been using this integration to pay their employees directly from the payroll software. Now, we have added a feature which allows you to pay HMRC directly from the payroll software through Modulr, using the Faster Payments method. This means that with a few simple clicks within the payroll software, you can have your payments sent and received by HMRC in under two minutes. The simplicity and convenience of using this method over others means that payments can be made at the eleventh hour, without having to worry about penalties for overdue payments.
Book a free BrightPay demo today and learn how BrightPay can help you avoid penalties, stay compliant and make running payroll as easy as possible.
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Feb 2021
1
Changes to the Kickstart Scheme
The Kickstart Scheme was introduced by the Department for Work and Pensions for employers in September 2020. This new scheme has created over 120,000 jobs since September 2020 for employees aged between 16 and 24 years old. It is helping young people start their careers as they have been some of the people hardest hit due to economic conditions from the global pandemic.
This scheme allows an employer or group of employers to create new placements for young people and apply for funding from the scheme. The 6 month placements are open to those currently claiming Universal Credit and in danger of long term unemployment. The job placements will allow the participants to gain experience and skills that will assist them in finding employment when they have completed the scheme.
There was a condition previously that an employer had to have a minimum of 30 job placements in order to qualify under this scheme but from 3rd February this threshold will be removed and employers will be able to apply to the Kickstart Scheme without this condition. The closing date for new applicants under this scheme was 28th January, but for employers who want to partake in this scheme they can contact one of the 600 gateway organisations that have been set up such as a Local Authority or Chamber of Commerce. The Department for Work and Pensions welcomes existing gateways continuing to apply to add more employers and job placements. There is £2 billion available under this scheme and the scheme will run until December 2021.
Under the Kickstart Scheme funding for 25 hours per week for 100% of the relevant National Minimum Wage category in addition to employer National Insurance contributions and employer minimum automatic enrolment pension contributions is available per participant. Funding of £1,500 for setup, support and training costs per placement is also paid. This scheme is available to employers in England, Scotland and Wales.
The job placements must:
- Be a minimum of 25 hours per week, for 6 months
- Pay at least the National Minimum Wage or National Living Wage for the person’s age category
- Only require basic training
Every application ought to include how the employer will aid the participants grow their skills and experience.
Development options could include:
- Providing support to the participants to seek long-term work, including career advice and setting goals
- Support with CV and interview preparations
- Developing their skills in the workplace such as timekeeping, attendance and teamwork
Related Articles:
- What is the Kickstart Scheme?
- Chancellor announces furlough bonus scheme and more in Summer Statement
- Get ready for April: IR35 rule changes in full-effect
Feb 2017
10
Higher rate Scottish Taxpayers to pay more
The new tax year will see thousands of Scots having to pay more in income tax compared to their British counterparts earning the same salary.
This follows the announcement that the wage at which Scots will start to pay the 40p income tax rate will remain frozen at £43,000 in tax year 2017-18. For the rest of the UK, this threshold will increase to £45,000 when the new tax year commences in April.
As a result, it is estimated that approximately 370,000 higher rate taxpayers in Scotland will pay up to £400 more than people earning the same in the rest of the UK.
Under devolved powers, Scotland is able to vary the rates of Scottish income tax (SRIT) by up to 10% from those set by the government in Whitehall.
Dec 2014
14
Tax thresholds raised in Autumn Statement
More than 130,000 people will escape the higher rate of tax, as it rises in line with inflation for the first time in five years.
The higher rate threshold – where taxpayers pay a 40 per cent rate – will jump from £41,865 to £42,385 next year, George Osborne announced in the Autumn Statement.
The £100 rise to the personal allowance was also passed on in full to higher rate tax payers.
Mr Osborne said the increase to the higher tax rate threshold was a “down-payment” on the government’s promise to raise it to £50,000 by the end of the decade.
The Chancellor also revealed an increase in the personal allowance – the amount of money that can be earned tax-free every year – to £10,600 from next April, £100 more than the £10,500 expected.
It has also been announced that business who employ apprentices under the age of 25 will no longer have to pay national insurance contributions for them.
Among the other measure announced was an extension of the £2,000 Employment Allowance to carers, freezing Universal Credit work allowances for another year and cutting tax credits when overpayments are certain.
Mar 2014
25
Employers yet to file RTI Returns
HMRC has announced more than 12,950 employers in the south east are being urged to send their employees’ Pay As You Earn (PAYE) information in real time or face penalties.
For example a total of 405 employers in Portsmouth are yet to file PAYE returns in real time. Employers who have not used the system were recently sent an email from HMRC, telling them to complete it by the end of March.
As mentioned in previous blogs, RTI should be the standard for the majority of employers now but there are those who are still struggling to achieve compliance.
Last June HMRC released a statement saying they “appreciated that many employers” (over 600,000 at that specific time) “are still getting used to this new way of reporting” and provided a reminder of the PAYE payment position for reporting for compliance with RTI.
With Auto Enrolment now being phased in, the pressure on employers to comply with the law and HMRC’s RTI is growing.
Feb 2014
6
2014/15 Budget Summary for UK Employers
There are a number of 2014-15 Budget measures which will affect the payroll for employers.
As a general rule, effective from 05th April 2014, unless an amended code notification has been received on a form P9 (T), employers should amend 2013-14 codes as follows:
- Tax codes ‘L’ suffix codes – increase by 56; code 944L becomes 1000L
- The PAYE threshold with effect from 6 April 2014 is raised to £192 per week (£833 per month)
- The code for emergency use with effect from 6 April 2014 is 1000L
National Insurance contribution thresholds 2014-15
| Weekly Lower Earnings Limit (LEL) | 111 |
| Weekly Primary Threshold (PT) | 153 |
| Weekly Secondary Threshold (ST) | 153 |
| Upper Earnings/Profits Limit (UEL/UPL) | 805 (41,865 per year) |
| Small Earnings Exception (SEE) | 5885 |
| Lower Profits Limit (LPL) | 7,956 (per year) |
| Employment Allowance | 2,000 (per year, per employer) |
Statutory Payment Changes 2014/15
Statutory Adoption Pay: Earnings threshold £111.00, Statutory Payment Changes 2014/15
Statutory Adoption Pay: Earnings threshold £111.00, Standard Rate £138.18
Statutory Maternity Pay: Earnings threshold £111.00, Standard rate £138.18
Statutory Paternity Pay: Earnings threshold £111.00, Ordinary Statutory Paternity Pay (Standard Rate) £138.18, Additional Statutory Paternity Pay (Standard Rate) £138.18
Statutory Sick Pay: Earnings threshold £111.00, Standard rate £87.55
- The SSP rate will take effect from 6 April 2014.
- The SMP, SAP, OSPP and ASPP rates will take effect for payment weeks beginning on or after the 1st Sunday in April which is also 6 April 2014.
- There are no changes to the rules and rates for the recovery of SMP, SAP, OSPP and ASPP for 2014-15.
- The Percentage Threshold Scheme for recovery of SSP will be abolished from 6th April 2014.
National Insurance: £2,000 employment allowance
The Government will introduce an allowance of £2,000 per year for all businesses and charities to be offset against their employer Class 1 secondary NICs liability from April 2014.
Exemption threshold for employer provided beneficial loans
Legislation will be introduced in Finance Bill 2014 to increase the exempt threshold for employment-related loans from £5,000 to £10,000 with effect from 6 April 2014.
Jul 2013
18
First Quarterly PAYE Payment
Some Brightpay advise on your First Quarterly PAYE Payment which is due 19/22 July 2013
Paying by Cheque:The cheque must be received by last working day (excluding weekends and bank holidays) on or before 19th July for 1st PAYE Quarter.
Electronically: Payment must have cleared HMRC bank account by last working day (excluding weekend and bank holidays) on or before 22nd July.
Amount Payable:
Amount payable is the total amount on an employer’s FPS and EPS for the quarter including any corrections or adjustments submitted on or before 19th of July 2013.
Any amended or corrected FPS and EPS received after 19th July (1st Quarter) will be taken into account in calculating your payment for Quarter 2.
You should also use an EPS to tell HMRC if you have no FPS to send as, without it, HMRC will instead calculate what they believe is due and expect you to pay this in full.
Checking your 2013/14 PAYE position:
An employer can use the HMRC online PAYE Liabilities & Payments Viewer (also known as the Business Tax Dashboard) to confirm the real time submissions that HMRC have received and to see both what the employer owes and what they have paid.
Please be aware that the Viewer might not show the most up-to-date position for:
Amount employer owes to HMRC - the Viewer’s ‘Amount due in period’ figure is updated on the 6th and 20th of each month, based on all submissions received to those dates. Any submissions made between these dates will not be reflected until the next update.
What an employer has paid HMRC – there is a slight delay in the payment information reaching the Viewer. Any very recent payments an employer has made may not be shown.
Please note that, even if the employer is a quarterly payer, HMRC will still raise monthly charges. The charges will either be based on the reports the employer has submitted, or where HMRC have estimated what the employer owes. These charges will be reflected on the Viewer, and will be shown as outstanding even if they are not yet due for payment.
Check out your HMRC Payments Record in Brightpay.
Bright Contracts – Employment Contracts and Handbooks.
BrightPay – Payroll & Auto Enrolment Software.
May 2013
7
2012-13 P35 deadline is fast approaching
Your 2012-13 Employer Annual Return is due by 19 May 2013. Send it as soon as possible to avoid a late filing penalty.
Click here for further details.
Bright Contracts – Employment Contracts and Handbooks.
BrightPay – Payroll & Auto Enrolment Software.
Apr 2013
22
HMRC clarifies RTI NI number issues
HMRC has been forced to issue a clarification about national insurance number verification requests after being contacted by worried employers trying to meet the Real Time Information (RTI) requirements.
The employers have been receiving rejections in response to their requests. This, says HMRC, is correct. They are being rejected because the employers are sending their requests in before they have made their first full payment submission (FPS).
“You cannot send a national insurance number verification request (NVR) until you have started to send PAYE information in real time,” HMRC advises. “Wait two weeks after sending your first FPS before sending an NVR.”
It points employers to its guidance, Making Sure You Use the Correct National Insurance Number
HMRC also says that it has been receiving phone calls from employees trying to find out what their NI number is after being told by their employer that they must have one for when the employer submits the RTI returns.
Although HMRC does want employers to provide correct NI numbers in their PAYE submissions, it stresses that there will be occasions when an NI number is not available. For example, the employee will not have been allocated one if they are under 16 years old.
Again, it points employers towards the NI guidance to make it clear that they should leave the NI number field blank and not be tempted to fill it in with a dummy or incorrect number.
Bright Contracts – Employment Contracts and Handbooks.
BrightPay – Payroll & Auto Enrolment Software.
Apr 2013
17
Minimum Wage to be Increased by the Government
The rate for 18 to 20-year-olds will rise by 5p to £5.03, and by 4p to £3.72 for 16 and 17-year-olds.
Ministers said they had rejected a recommendation from the Low Pay Commission that the rate for apprentices should be frozen, announcing a 3p an increase to £2.68 an hour.
Business Secretary Vince Cable said: "The independent Low Pay Commission plays a crucial role in advising the Government when setting the national minimum wage every year. It balances wages of low paid workers against employment prospects if the rate was set too high.
"We are accepting its recommendations for the adult and youth rate increases, which I am confident strikes this balance. However, there is worrying evidence that a significant number of employers are not paying apprentices the relevant minimum wage rate.
"Apprenticeships are at the heart of our goal to support a stronger economy, and so it is important to continue to make them attractive to young people.
"Therefore, I am not taking forward the LPC's recommendation to freeze the apprenticeship rate due to non-compliance, but instead am raising it in line with the youth rates. We are working on a series of tough new measures to ensure we tackle non-compliance issues across the board."
Tim Thomas of the manufacturers' organisation the EEF, commented: "Today's announcement strikes a delicate balance between the need for an element of pay progression and the limitations employers face in accommodating pay rises.
"The modest increase in the apprenticeship rate is unlikely to negatively affect apprenticeship recruitment and of much greater importance is the raising of apprenticeships standards, better information and advice to students and ensuring that apprenticeships are truly employer-led and employer-driven."
TUC general secretary Frances O'Grady said: "Boosting the incomes of the low paid goes straight into the economy and wage-led growth must be part of the recovery so we would have liked to have seen minimum wage rates go up further today, even if the Government has rightly rejected calls for a freeze.
"But we are pleased that ministers have increased the apprenticeship rate. This sends a positive signal about the importance of apprentices.
"We will continue to press ministers for more action to ensure the minimum wage is properly enforced - particularly for apprentices where there is considerable evidence that many miss out. It is time to get tough with wage-cheat employers who break this law.
"We will continue to urge the many employers who can afford it to implement a full living wage for their staff."
The rate for 18 to 20-year-olds will rise by 5p to £5.03, and by 4p to £3.72 for 16 and 17-year-olds.
Ministers said they had rejected a recommendation from the Low Pay Commission that the rate for apprentices should be frozen, announcing a 3p an increase to £2.68 an hour.
Business Secretary Vince Cable said: "The independent Low Pay Commission plays a crucial role in advising the Government when setting the national minimum wage every year. It balances wages of low paid workers against employment prospects if the rate was set too high.
"We are accepting its recommendations for the adult and youth rate increases, which I am confident strikes this balance. However, there is worrying evidence that a significant number of employers are not paying apprentices the relevant minimum wage rate.
"Apprenticeships are at the heart of our goal to support a stronger economy, and so it is important to continue to make them attractive to young people.
"Therefore, I am not taking forward the LPC's recommendation to freeze the apprenticeship rate due to non-compliance, but instead am raising it in line with the youth rates. We are working on a series of tough new measures to ensure we tackle non-compliance issues across the board."
Tim Thomas of the manufacturers' organisation the EEF, commented: "Today's announcement strikes a delicate balance between the need for an element of pay progression and the limitations employers face in accommodating pay rises.
"The modest increase in the apprenticeship rate is unlikely to negatively affect apprenticeship recruitment and of much greater importance is the raising of apprenticeships standards, better information and advice to students and ensuring that apprenticeships are truly employer-led and employer-driven."
TUC general secretary Frances O'Grady said: "Boosting the incomes of the low paid goes straight into the economy and wage-led growth must be part of the recovery so we would have liked to have seen minimum wage rates go up further today, even if the Government has rightly rejected calls for a freeze.
"But we are pleased that ministers have increased the apprenticeship rate. This sends a positive signal about the importance of apprentices.
"We will continue to press ministers for more action to ensure the minimum wage is properly enforced - particularly for apprentices where there is considerable evidence that many miss out. It is time to get tough with wage-cheat employers who break this law.
"We will continue to urge the many employers who can afford it to implement a full living wage for their staff."
The rate for 18 to 20-year-olds will rise by 5p to £5.03, and by 4p to £3.72 for 16 and 17-year-olds.
Ministers said they had rejected a recommendation from the Low Pay Commission that the rate for apprentices should be frozen, announcing a 3p an increase to £2.68 an hour.
Business Secretary Vince Cable said: "The independent Low Pay Commission plays a crucial role in advising the Government when setting the national minimum wage every year. It balances wages of low paid workers against employment prospects if the rate was set too high.
"We are accepting its recommendations for the adult and youth rate increases, which I am confident strikes this balance. However, there is worrying evidence that a significant number of employers are not paying apprentices the relevant minimum wage rate.
"Apprenticeships are at the heart of our goal to support a stronger economy, and so it is important to continue to make them attractive to young people.
"Therefore, I am not taking forward the LPC's recommendation to freeze the apprenticeship rate due to non-compliance, but instead am raising it in line with the youth rates. We are working on a series of tough new measures to ensure we tackle non-compliance issues across the board."
Tim Thomas of the manufacturers' organisation the EEF, commented: "Today's announcement strikes a delicate balance between the need for an element of pay progression and the limitations employers face in accommodating pay rises.
"The modest increase in the apprenticeship rate is unlikely to negatively affect apprenticeship recruitment and of much greater importance is the raising of apprenticeships standards, better information and advice to students and ensuring that apprenticeships are truly employer-led and employer-driven."
TUC general secretary Frances O'Grady said: "Boosting the incomes of the low paid goes straight into the economy and wage-led growth must be part of the recovery so we would have liked to have seen minimum wage rates go up further today, even if the Government has rightly rejected calls for a freeze.
"But we are pleased that ministers have increased the apprenticeship rate. This sends a positive signal about the importance of apprentices.
"We will continue to press ministers for more action to ensure the minimum wage is properly enforced - particularly for apprentices where there is considerable evidence that many miss out. It is time to get tough with wage-cheat employers who break this law.
"We will continue to urge the many employers who can afford it to implement a full living wage for their staff."
Bright Contracts – Employment Contracts and Handbooks.
BrightPay – Payroll & Auto Enrolment Software.
