Copyright © 2024 Thesaurus Software Ltd T/A Bright Software Group.
3 Shortlands, Hammersmith, London, W6 8DA
[email protected] 0345 9390019Jun 2016
2
During the 2016-17 tax year, HMRC has decided to continue their approach of the 3 day easement and the risk-based approach to charging penalties. Employers will not incur penalties for delays up to three days in filing PAYE information to HMRC. This is due to a review of this approach that was implemented in the 2015-16 tax year which showed a large reduction in returns being filed late.
Employers are required to file their PAYE information to HMRC on or before each payment date, which is the statutory filing date, unless the circumstances set out in the 'sending an FPS after payday guidance' are met. The three day easement is not an extension to the statutory filing date. No late filing penalties will be charged for late filing up to three days after the statutory filing date. However, employers who consistently are filing their returns for up to the three days after the statutory filing date will be monitored by HMRC and may be issued with a penalty.
HMRC will continue to monitor the situation and will review their approach if necessary for the tax year 2017-18, focusing on employers who are constantly filing late and failing to meet the statutory deadlines.
May 2016
16
The deadline for renewing tax credits is the 31st July and for the periods of June and July the tax credits helplines are very busy. Payments will be stopped if tax credits are not renewed by the deadline of 31st July. HMRC are asking employers to encourage their employees to renew their claim for tax credits as soon as possible and using the online method.
Renewing online is easy and is less time consuming, any employee can do this once they have received their renewal pack. The renewal packs are being sent out by HMRC from April to June. It only takes on average 6 minutes to renew using the online method. In 2015 around 750,000 renewed their tax credits using the online service. Employees need to report any changes in their circumstances, example, changes to working hours, income etc. Anyone that cannot renew online can seek support through the tax credits helpline.
Employers can help encourage their employees to renew their tax credits by a number of methods:
• Asking their employees to check their renewal packs and to ensure all data is correct and up to date and renewing online
• By ensuring all the employees payment details and personal details through payroll have been reported to HMRC by Real Time Information
• Employers could include a note on the employees' payslips from April to July mentioning renewing tax credits and the deadline date
• If there is a business/company newsletter that it can be mentioned regarding renewing tax credits and the deadline date
May 2016
4
As automatic enrolment is a requirement that all employers must comply with and with compliance rates of all sizes of employers remaining high (in the high nineties) there are a number of employers that are not complying. According to The Pensions Regulator's (TPR) latest quarterly compliance and enforcement bulletin the amount of Escalating Penalty Notices that are issued is rising.
An Escalating Penalty Notice (EPN) can be issued by The Pensions Regulator to help employer compliance with their automatic enrolment duties and is one of the statutory powers of the TPR. Employers risk a fine that increases daily if they do not regard a 28 day warning notice. On an EPN the date is specified that the employer must comply with certain duties or can be penalised with a fine that increases daily. For employers with 1 to 4 employees the fine is £50 per day and for employers with 5 to 49 employees the fine is £500 per day. If an employer ignores the EPN it may lead to additional costs that could have been avoided.
The Pensions Regulator's Press Release for the First Quarter of 2016 shows the headline figures below and can be found at http://www.thepensionsregulator.gov.uk/doc-library/research-analysis.aspx#s16191
• 3,057 Compliance Notices issued - totalling 7,834 to date
• 806 Fixed Penalty Notices issued - totalling 2,234 from 2012 to date
• 96 Escalating Penalty Notices issued this quarter - totalling 127 to date
Apr 2016
11
There has been an increase from 6th April 2016 in the weekly rate of Statutory Redundancy Pay by £4 from £475 in 2015-16 to £479 in 2016-17. This increase is due to The Employment Rights (Increase of Limits) Order 2016. The maximum compensatory award has also been increased from £78,335 to £78,962.
These increases are only in England, Scotland and Wales. Northern Ireland is governed by different legislation and any revisions on limits by The Employment Rights (Increase of Limits) Order (Northern Ireland) 2016 came into effect on 14th February 2016.
The rates for England, Scotland and Wales displayed on GOV.UK are currently the old rates and this information should be updated soon.
Apr 2016
11
Single-director companies will not be eligible to claim the National Insurance Contributions Employment Allowance for the new tax year 2016-17. The employment allowance for the new tax year 2016-17 will be £3,000, an increase from £2,000 from 2015-16.
Employment Allowance Guidance to changes from 6th April 2016:
• If the only employee is a director of a limited company and paid wages above the Secondary Threshold for Class 1 National Insurance contributions the Employment Allowance will no longer be eligible for claiming. The Secondary Threshold is £156 per week for 2016-17.
• If there is a limited company with a number of employees and a director is one of these employees where the director is the only employee to be paid over the Secondary Threshold, the limited company can no longer claim the Employment Allowance.
For 2016-17 if you are not eligible to claim the Employment Allowance you must not claim it and ensure that the full amount of employer Class 1 National Insurance contributions are paid.
If throughout the 2016-17 tax year the circumstances of the limited company change where more than one employee or director is paid wages above the Secondary Threshold, the company will be able to claim the Employment Allowance for the full tax year. Such companies include where:
1. All employees are directors where they both are paid wages above the Secondary Threshold
2. The directors that are employed are husband and wife and both are paid wages above the Secondary Threshold
3. If seasonal employees are employed and one or more employees are paid wages above the Secondary Threshold in a week
4. If the employee is the only UK based worker of an international company and is paid wages above the Secondary Threshold in a week and meets the other eligibility criteria.
Basically the eligibility to claim the Employment Allowance is determined on if the additional employee is paid wages above the Secondary Threshold of £156 in 2016-17 or directors must be paid above the Annual Secondary Threshold of £8,112 or on a pro-rata basis if the directorship commenced after the start of the tax year.
Mar 2016
31
The main points to be noted by employers from Budget 2016 announced by Chancellor George Osborne are:
• The personal tax allowance will increase by £500 from £11,000 to £11,500 from April 2017
• The higher rate tax threshold will increase to £45,000 from April 2017
• Termination payments over £30,000 which are subject to income tax currently from April 2018 will be subject to Employer National Insurance Contributions (NICs)
• Class 2 National Insurance Contributions for self-employed people will be scrapped from April 2018
• The range of benefits that are subject to income tax and National Insurance Contributions are going to be examined by the government with the aim of limiting the range of benefits subject to income tax and NIC. It is the view of the government that such benefits such as the pension saving, childcare and schemes such as the Cycle to Work will still continue to benefit from the relief of income tax and NIC when provided through salary sacrifice agreements.
• A new discount rate for employers contribution to the unfunded public service pension schemes is set at 2.8% and in 2019-20 employers will have to pay higher contributions into the scheme as a result.
• The rate of tax on loans to directors and participators will increase by 7.5% to 32.5% in April 2016.
Mar 2016
17
Penalties from HMRC will be issued if any late filing of a Full Payment Submission (FPS) from 6th April 2016 onwards.
Currently there is a 3 day relaxation for filing a late Full Payment Submission which is detailed per the HMRC website GOV.UK https://www.gov.uk/guidance/what-happens-if-you-dont-report-payroll-information-on-time
"HMRC won’t charge a penalty if:
• your FPS is late but all reported payments on the FPS are within 3 days of your employees’ payday (this applies from 6 March 2015 to 5 April 2016)"
The other circumstances where HMRC will not issue a penalty for late submission of an FPS are when:
• you’re a new employer and you sent your first FPS within 30 days of paying an employee
• it’s your first failure in the tax year to send a report on time (this doesn’t apply to employers who register with HMRC as an annual scheme or have fewer than 50 employees for the tax year 2014 to 2015)
Mar 2016
17
The Low Pay Commission's (LPC) recommendations for the rates of the minimum wage for employees under 25 and apprentices has been accepted by the Government and this take effects from 1st October 2016.
These include:
21-24 year olds £6.95 per hour an increase of 3.7%
Youth Development Rate - 18-20 year olds £5.55 per hour an increase of 4.7%
16-17 Year Old Rate £4.00 per hour
Apprentice Rate £3.40 per hour an increase of 3%
The Government has introduced the National Living Wage of £7.20 per hour for employees over 25 which takes effect on 1st April 2016.
Feb 2016
10
In the Finance Bill 2016 legislation will be introduced for the new Apprenticeship Levy which will take effect from 6 April 2017. Currently draft legislation has been published to introduced this new levy.
The new Apprenticeship Levy will be paid by employers and will help fund new apprenticeships in the future. This levy of 0.5% will be charged on employers’ paybills which will be based on the total employee earnings subject to Class 1 secondary NICs. The levy will be payable through Pay As You Earn (PAYE) and will be payable alongside income tax and National Insurance.
An annual allowance of €15,000 will be made available to each employer to offset against their levy payment, which calculates that the Levy will only be payable on paybills on over £3 million in that tax year. Similar to the Employment Allowance Claim, an employer who operates multiple payroll schemes will only be able to claim one annual allowance for this levy.
Jan 2016
22
From 6th April 2016 contracting out of the additional State Pension on a defined benefit basis will cease. Employees will no longer be able to use a contracted-out salary related occupational scheme to contract out of the State Scheme and will be automatically put back into the State pension scheme. The rebate of 1.4% for employers and 3.4% for employees will also end at 5th April 2016.
With the new State Pension being introduced there will a few changes in what and how you report to HMRC:
• Employers will no longer have to report on the Full Payment Submissions to HMRC the Employers Contracting-out Number (ECON) and the Scheme Contracted-out Number (SCON)
• A requirement to report National Insurance earnings between Primary Threshold (PT) and Upper Earnings Limit (UEL), as was required prior to 2009
• It is not necessary to report the information of seperating the National Insurance (NI) earnings between the Primary Threshold (PT) and Upper Accruals Point (UAP) and UAP to Upper Earnings Limit (UEL).
• From the start of the new tax year employers will be no longer be allowed to use your Contracted-out Salary Related (COSR) occupational pension scheme to contract out employees out of the new State Pension scheme.
• The form P60 will change as there will be one less column to complete on the form.
HMRC systems will be all updated to reflect these changes from 6th April 2016 onwards and the UAP field will be removed from the Full Payment Submission (FPS) and Earlier Year Update (EYU).
Regarding the National Insurance Categories for the 2016-17 tax year the Standard Insurance tables/categories A,B,J,M,P,Q,R,T,Y and Z will replace the contracted-out National Insurance tables/categories of D,E,I,K,L,N,O and V.
Copyright © 2024 Thesaurus Software Ltd T/A Bright Software Group.
3 Shortlands, Hammersmith, London, W6 8DA
[email protected] 0345 9390019