Copyright © 2024 Thesaurus Software Ltd T/A Bright Software Group.
3 Shortlands, Hammersmith, London, W6 8DA
[email protected] 0345 9390019Aug 2016
17
The current National Minimum Wage was introduced on 1st October 2015 and will change on 1st October 2016. The current rates are:
• Workers aged 21 and over: £6.70 an hour
• Development rate for workers aged 18-20: £5.30 an hour
• Young workers rate for workers aged 16-17: £3.87 an hour
• Apprentices under 19, or over 19 and in first year of the apprenticeship: £3.30 an hour
197 employers have failed to pay their employees the National Minimum Wage. These employer details have been published, this list is the largest list to date. These employers range across a number of industries such as hairdressers, hotels, football clubs and care homes.
A total liability of £465,291 was owed by the 197 employers to their employees and The Department for Business, Energy and Industrial Strategy have confirmed that all these monies have been repaid to the employees. Since the scheme was introduced in October 2013, a total of 687 employers details have been published and a total liability of £3.5 million.
The onus is on the employer to ensure the correct rate of pay is paid to the relevant employee, depending on their circumstances. The National Living Wage was introduced on 1st April 2016, for employees aged 25 and over, which is £7.20 per hour. The National Living Wage will be enforced equally along with the National Minimum Wage!
Aug 2016
3
Employment Intermediaries that have the contract with the client have to send a report to HMRC periodically. The report contains the details of all workers they place with clients where the intermediary does not operate Pay As You Earn (PAYE) on the workers' payments. The Intermediary can decide how frequently they send this report to HMRC - they have several options available including sending these reports weekly or monthly. But the report has to be send to HMRC at least once every 3 months.
From next week, 5th August 2016, penalties will start to apply for late filing of these reports. The report for the first 3 months - 6th April to 5th July 2016 - will be due for filing on 5th August 2016. The amount per penalty depends on the amount of infringements in the prior 12 month period. The penalties are £250 for the first infringement, £500 for the second and £1,000 for the third and other charges will apply for further infractions. If a report is submitted late, but is after 12 months since the last report was late it will be only deemed as the first offence.
If a report sent is incorrect or is missing any information, penalties may occur. These penalties are determined on a case by case basis. If the incorrect report is replaced by a corrected report before the deadline approaches without being prompted by HMRC, this will be taken into consideration if a penalty has to be paid. Where reports are consistently late or are failed to be submitted a penalty of up to £600 per day that the report is late may apply.
Jul 2016
14
Recently new National Insurance Numbers have been issued with the prefix of KC by Jobcentre Plus (on behalf of the Department for Work and Pensions). These National Insurance numbers are valid. Unfortunately there have been issues with these NINOs with the KC prefix as HMRC has not included the KC prefix as a valid prefix on their list of valid prefixes to software developers. So currently HMRC's systems do not recognise the prefix KC and most payroll softwares will not recognise it either. You may not be able to enter the National Insurance number into your payroll software as it may not be recognised and even if you can your Full Payment Submission may be rejected by HMRC due to the prefix not being recognised by HMRC.
HMRC have issued a message regarding the problem "We are aware that a small number of National Insurance numbers with prefix 'KC' were issued recently and that these are causing some problems for our customers."
If you have an employee with a NINO with a KC prefix you should take the following steps when entering their details in your payroll software for the moment, as your RTI returns will successfully submit to HMRC:
• Do not enter the NINO for the employee - this field should be left empty
• The employee's address has to be entered, the first two lines minimum requirement
• You do not need to request a new NINO as the NINO with the KC prefix is valid.
Per HMRC " We are working hard to resolve this issue quickly and will provide more information shortly"
Jul 2016
1
If you’re an employer and provide expenses or benefits to employees or directors, you may need to tell HM Revenue and Customs (HMRC) and pay tax and National Insurance on them. The means of reporting these details to HMRC is on a P11D or P9D form and P11D(b) form.The P11D is a statutory form required by HMRC from UK based employers detailing the cash equivalents of benefits and expenses that they have provided during the tax year to their directors, and employees earning at the rate of more than £8,500 per year (inclusive of any BIK amount). Your P11D(b) tells HMRC how much Class 1A National Insurance you need to pay on all the expenses and benefits you’ve provided.
Examples of expenses and benefits include:
• company cars
• health insurance
• travel and entertainment expenses
• childcare
The deadline for reporting these details to HMRC for the tax year 2015-16 is before the 7th July 2016, so have to be received by HMRC on or before the 6th July 2016. Recent communication from HMRC's Software Developer Support Team stressed that - “Where employers fail to submit their P11D and P11D (b) returns employees may have incorrect tax codes (and tax bills) and any delays beyond 19 July might result in the employer being charged a penalty.” The charge per month is £100 for every 50 or part-batch of 50 employees provided with benefits. Per the HMRC’s CWG5 booklet Class 1A National Insurance Contributions on Benefits in Kind the filing date for the return is the 6th of July but if the return is late the penalties start to be calculated but it will only be enforced if the returns are still outstanding at 19th July. This “grace period” does not apply to the employer’s obligation to ensure that employees employed on 5 April receive their P11D / P9D by 6 July. So:
• Copy to HMRC – by 19 July at the latest
• Copy to employees – by 6 July
BrightPay can produce a P11D for sending to HMRC after year end which includes your Class 1A NICs declaration and details of the expenses and benefits provided including cash equivalents.
Jun 2016
29
A declaration of compliance needs to be completed and submitted to the Pensions Regulator within five months of the staging date. A Declaration of Compliance is the employer informing The Pension Regulator that they have met their automatic enrolment duties. For example, if the staging date is 1 July 2016, you must submit your declaration of compliance to the pension regulator no later than 31 November 2016. This deadline can be also called your registration deadline. If your registration deadline falls on a Saturday, Sunday or public holiday, you can provide your registration on the next working day. If you’ve postponed automatic enrolment for any of your staff, you mustn’t submit your registration until after the postponement period has ended.
If you do not submit your declaration of compliance in time you may be fined. It is a legal duty that the declaration of compliance is fully completed with the correct information and submitted on time.
Should you be experiencing any issues regarding your automatic enrolment process or collecting the relevant information for your Declaration of Compliance contact The Pension Regulator immediately. The Pension Regulator's website has a help section: http://www.thepensionsregulator.gov.uk/automatic-enrolment-registration-questions.aspx.
Jun 2016
29
An employer who wanted to bring their staging date forward had previously to give The Pensions Regulator (TPR) notice of one month. Employers are no longer required to give The Pensions Regulator one month's notice. If an employer wants to bring forward their staging date now they will still have to notify the Pensions Regulator but only will have to do so at any time on or before their new staging date.
But employers who do have employees for automatic enrolment need to agree the date with the Pensions Regulator and like all staging dates it has to be the 1st day of the month. Employers with no employees for automatic enrolment can bring forward their staging date to a date of their choice and also complete their declaration of compliance at the same time thus fulfilling their automatic enrolment duties as an employer. The requirement for employers with no employees for automatic enrolment to set up a pension scheme is no longer required. They only need to do this once they have an employee for automatic enrolment purposes.
Jun 2016
17
HMRC claims it is offering its best customer service in years presently. This is a reaction from a report that the National Audit Office published in May 2016 stating that the quality of customer service HMRC provides has deteriorated over an 18 month period in 2014 and 2015. In this period some people calling HMRC were waiting up to an hour, treble the average call waiting time, costing taxpayers the equivalent of £97 million last year.
HMRC says it has achieved improvements to customer service by:
• recruiting more than 3,000 additional advisers who can work outside normal office hours;
• introducing more flexible working to deal with large fluctuations in customer demand throughout the year, underpinned by a new telephone system that enables HMRC to move calls around the country in response to demand;
• launching online services that enable customers to manage their tax affairs when and where they want, including by smartphone, with online support such as webchats.
HMRC have also indicated that they may make the following changes that were in Chancellor George Osborne’s 2016 budget, including:
• the introduction of a seven-day service by April 2017, with extended hours and Sunday opening on main phone lines, as well as online support services such as webchats;
• the recruitment of more than 800 new staff into the customer services teams, to reduce call answering times and further increase the flexibility to respond to demand;
• a new secure email service – operated through customers’ online tax accounts.
Ruth Owen, HMRC’s director general for customer services, said: “Over the past six months we’ve consistently answered calls in an average of six minutes, and have launched new online tax accounts and webchat for everyone, enabling customers to manage their tax affairs wherever and whenever they want. There’s never been a better or more convenient service for our customers.”
Research conducted by CIPP has shown that HMRC's response times in recent months have improved.
Jun 2016
17
Every quarter UK Visas and Immigration and Immigration Enforcement publish a report showing the number of fines issued to employers in each region of the UK for employing illegal employees. Over £21 million fines were issued in the second half of 2015. The total amount of illegal employees in that same period was 1,820, the area with the most illegal employees was in the London and South East region.
Employers can face fines and criminal prosecution for hiring illegal employees, the maximum fine having increased from £10,000 to £20,000 in May 2014 for illegally hiring an immigrant. Employers are advised to ensure they know what the correct work checks are and ensure these checks are being made.
On GOV.UK the UK Visas and Immigration and Immigration Enforcement have An employer’s guide to right to work checks which details:
• what a right to work check is
• why you need to do right to work checks
• whose documents you should check
• how to carry out checks
• when to carry out initial checks, follow-up checks and what happens under TUPE what documents are acceptable.
Jun 2016
2
For the new tax year 2016-17 HMRC have introduced a new exemption that removes the liability of income tax for certain low valued Benefits in Kind ('Trivial BiKs')
Currently this is subject to Parliamentary approval and will be part of the new legislation Finance Bill 2016. Draft guidance on the new exemption has been published on GOV.UK and will be included in HMRC's Employment Income Manual later in the tax year. Previous treatment of Trivial BiKs was that employers could agree with HMRC that particular BiKs could be treated as trivial and did not need to be returned to HMRC at the end of the tax year and this no longer applies.
General conditions that a 'trivial BiK' must meet in order to qualify are:
• A. the BiK must not be cash or a cash-voucher
• B. the BiK must cost £50 or less
• C. the BiK must not be provided as part of a salary sacrifice or other contractual agreement
• D. the BiK must not be provided in recognition of services performed by the employee as part of their employment, or in anticipation of such services
In a tax year for an employee there is no limit on the amount of BiKs that can be provided where all the conditions are met, unless Condition E applies (see below)
Close Companies
Condition E applies an annual £300 cap where a trivial BiK (that meets conditions A to D) is provided by an employer that is a close company to an employee that is:
• a director or other office-holder in the company member of the family or household of a director or office-holder of the close company
Jun 2016
2
For company cars HMRC has issued details regarding the latest Advisory Fuel Rates. From the date of change employers may use the old rates or new rates for one month. Employers are under no obligation to make supplementary payments to reflect the new rates but can do so if they wish. Hybrid cars are treated as either petrol or diesel cars for this purpose for the fuel rates.
Details can be seen at https://www.gov.uk/government/publications/advisory-fuel-rates/advisory-fuel-rates-from-1-march-2016
Copyright © 2024 Thesaurus Software Ltd T/A Bright Software Group.
3 Shortlands, Hammersmith, London, W6 8DA
[email protected] 0345 9390019