Copyright © 2024 Thesaurus Software Ltd T/A Bright Software Group.
3 Shortlands, Hammersmith, London, W6 8DA
[email protected] 0345 9390019Aug 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"
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
HMRC has provided a soft landing for late filing penalties for full payment submissions (FPS) under RTI since 2014/15, but that was due to end on 5 April 2016. Now, seven weeks into the 2016/17 tax year, HMRC has announced that the late filing penalty soft landing will be extended to April 2017. The fully automatic late filing penalty regime for RTI was supposed to come into force from 6th October 2014 for employers with 50 or more employees, and from 6th March 2015 for all other employers. In fact, the automatic function was disconnected, and HMRC decided to risk assess the issue of all RTI late filing penalties.
HMRC will continue with this risk-based approach until at least 5th April 2017. This means that only employers who have persistently filed their FPS late for several months will be issued with a penalty – which can be appealed.
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
Jun 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
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
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)
Copyright © 2024 Thesaurus Software Ltd T/A Bright Software Group.
3 Shortlands, Hammersmith, London, W6 8DA
[email protected] 0345 9390019