New UK Tax-Free Childcare scheme due to launch in autumn 2015.

1. The scheme will launch in autumn 2015

You’ll be able to open an online account, which you can pay into to cover the cost of childcare with a registered provider. This will be done through the government website, GOV.UK.

2. For every 80p you or someone else pays in, the government will top up an extra 20p

This is equivalent of the tax most people pay - 20% - which gives the scheme its name, ‘tax-free’. The government will top up the account with 20% of childcare costs up to a total of £10,000 - the equivalent of up to £2,000 support per child per year.

3. The scheme will be available for children up to the age of 12

It will also be available for children with disabilities up to the age of 16, as their childcare costs can stay high throughout their teenage years.

4. To qualify, parents will have to be in work, earning just over an average of £50 a week and not more than £150,000 per year

The scheme is designed to be flexible for parents if, for example, they want to get back to work after the birth of a child or work part-time.

5. Any eligible working family can use the Tax-Free Childcare scheme - it doesn’t rely on employers offering it

Tax-Free Childcare doesn’t rely on employers offering the scheme, unlike the current scheme Employer-Supported Childcare. Any working family can use the Tax-Free Childcare scheme, provided they meet the scheme’s eligibility requirements.

6. The scheme will also be available for parents who are self-employed

Self-employed parents will be able to get support with childcare costs in Tax-Free Childcare, unlike the current scheme (Employer-Supported Childcare) which is not available to self-employed parents. To support newly self-employed parents, the government is introducing a ‘start-up’ period. During this, self-employed parents won’t have to earn the minimum income level, £50 a week.

The scheme will also be available to parents on paid sick leave and paid and unpaid statutory maternity, paternity and adoption leave.

7. If you currently receive Employer-Supported Childcare then you can continue to do so

You do not have to switch to Tax-Free Childcare if you do not wish to. Employer-Supported Childcare will continue to run. Parents won’t be able to register for Employer-Supported Childcare after Tax-Free Childcare is introduced in autumn 2015, but those already registered by this date will be able to continue using it for as long as their employer offers it. However, Tax-Free Childcare will be open to more than twice as many parents as Employer-Supported Childcare.

Employers’ workplace nurseries won’t be affected by the introduction of Tax-Free Childcare.

8. Parents and others can pay money into their childcare account as and when they like

This gives you the flexibility to pay in more in some months, and less at other times. This means you can build up a balance in your account to use at times when you need more childcare than usual, for example, over the summer holidays.

It’s also not just the parents who can pay into the account - if grandparents, other family members or employers want to pay in, then they can.

9. The process will be as simple as possible for parents

The process will be light-touch and as easy as possible for you. For example, parents won’t have to report any change of circumstances to HMRC; there will be a single log-in service where parents can view accounts for all of their children at once.

10. You’ll be able to withdraw money from the account if you want to

If your circumstances change or you no longer want to pay into the account, then you’ll be able to withdraw the money you have built up. If you do, the government will withdraw its corresponding contribution.

Posted byAnn TigheinPayroll

HMRC's employment allowance calculator

Through the new Employment Allowance employers can reduce the amount of NIC they pay for their employees by up to £2,000.

An online calculator is now available for employers to see the effect the new Employment Allowance could have on their National Insurance Contributions bill.

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

The new Employment Allowance can be claimed from 6 April 2014. You are not required to pay any employer National Insurance Contributions if you pay less than £2,000 a year.

It is estimated up to 1.25 million businesses and charities will benefit from Employment Allowance, with 450,000 businesses and charities not required to pay any Employer NIC at all.

Eligibility

Employment Allowance is for nearly all employers that pay Class 1 National Insurance contributions on their employees’ and directors’ earnings. This includes:

 • Businesses
 • Charities
 • Community Amateur Sports Clubs

Posted byLorraine McEvoyinNICPayroll

Draft rules on shared parental leave and pay published - UK

Government calls for employer responses to new regime

The government has published its draft regulations for shared parental leave and pay, with finalised rules scheduled to come into force on the 1st of October 2014. However, law experts are already warning that the proposed rules “look terribly complicated for both employers and employees”. The draft regulations outline new entitlements for mums and dads, or their partners, to receive 'statutory shared parental pay' from their employers.

The proposals detail the conditions that parents must meet to qualify for these payments. They also allow flexibility for parents to change their requirements after their initial claim.This secondary legislation is part of a radical government overhaul of the existing maternity and paternity regime and it will support the primary legislation known as the Children and Families Act once it receives Royal Assent. The rules will allow both parents to share up to 50 weeks' leave, which can be taken at the same time, or separately. Mums will be able to cut short maternity leave and, provided they give at least eight weeks' notice, can make up to three requests to share their maternity leave with their partner after having their child. But if an employer does not agree to discontinuous periods of leave the employee will have to take the leave continuously. Policy makers at the Department for Business Innovation and Skills (Bis) have urged employers, and other stakeholders, to respond to the draft rules, saying they want to make the new system of shared parental leave and pay “as simple to use as possible”.Bis has indicated it intends the changes to take effect for babies born on or after 5 April 2015.

But in response to the publication of the draft, Pattie Walsh, London head of employment at DLA Piper, said: "The much trailed overhaul of the UK's existing maternity and paternity regime has now had some flesh put on the bones with the publication of a series of draft regulations. "The government's aim to allow parents to share a period of parental leave is a laudable one. However, at first blush at least, the regulations which will implement the system look terribly complicated - for both employers and employees. They are due to come into force in October 2014, leaving employers with a relatively short time to prepare new policies and procedures, and will apply to employees expecting a baby on or after 5 April 2015.And she added: "Surprisingly, it appears that only employees with 26 weeks' service will qualify for the right to take shared parental leave in any event."

Bright Contracts – Employment contracts and handbooks.
BrightPay – Payroll & Auto Enrolment Software

Posted byCaroline MaloneinPayroll

Child Maintenance Service - new self service website for the UK

A new service launched this month makes it easier for businesses to meet their legal obligation to deduct child maintenance from employee’s wages. The Child Maintenance Service Employer Self Service replaces the old paper-based system with a new free online portal.

Using the self service website you can:

  • View the amounts you are due to deduct for specific employees
  • Complete an online schedule that details your actual deductions and the total payment
  • View schedules and payments you have made previously

The Department for Work and Pensions (DWP) has set up a dedicated team of 25 staff to deal with any enquiries from employers regarding child maintenance, thus providing a better service for them through a single point of contact.

Work & Pensions Minister Steve Webb said “This new online service will reduce the time and effort needed for employers who have to deduct child maintenance for their staff and will be particularly helpful to small businesses. We are replacing the outdated child maintenance system with a more efficient streamlined service to better support parents and employers.”

Further information can be found at www.gov.uk/child-maintenance-for-employers

Posted byAudrey MooneyinPayroll

Incentive for UK employers to employ individuals under the age of 21

Abolition of Employers National Insurance Contributions for Under-21s

From 6th April 2015 employers will no longer be required to pay Class 1 secondary National Insurance Contributions (NICs) on earnings up to the upper earning limit (UEL), for employees under the age of 21. The upper earning limit in 2015-16 is expected to be £813 per week (£42,285 per annum); employer NIC will be liable as normal beyond this limit. The saving to the employer will be £500 where an employee earns £12,000 per annum and £1,000 where an employee earns £16,000 per annum.

The aim of the policy is to encourage employers to employ individuals under the age of 21. Under current law, employers are liable to Class 1 secondary NICs on all earnings paid to employees over the age of 16 provided their earnings exceed the secondary threshold which is currently £148 per week.

This move follows the introduction of the Employment 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.

Posted byAudrey MooneyinHMRCPayroll

2014/15 Student Loan thresholds increase from 06th April 2014

For any employee for which you have been instructed to apply the student loan deduction, you will see an increase to net pay directly resulting from the change to the Student Loan thresholds with effect from 06th April 2014.

With effect from 06th April 2014 the student loan threshold increases to;

The deduction rate remains at 9%

Employees should direct all queries to the Student Loan Company;

Web www.slc.co.uk
Tel 0845 300 50 90
(open Mon-Fri from 8.00am to 8.00pm and between 9.00am and 4.00pm on Sat - Sun)

Posted byKaren McDarbyinPayroll

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

UNIVERSAL CREDIT – GOOD NEWS FOR UK EMPLOYERS

Universal Credit is a new single monthly payment for people on low incomes or out of work. It aims to ensure that people are better off working that claiming benefits.

This means that they would not lose all their benefits if they take up employment and are receiving a low income and their Universal Credit would only reduce gradually as their income increases.

WHAT WILL THIS MEAN FOR EMPLOYERS

Employers will benefit from this in a number of ways.

It will be easier to fill jobs either short time or with irregular hours.

It will mean that more flexible working hours can be put in place for existing employees without needing to recruit new employees and the expense that would incur.

Employers will be able to access people registered on Universal Jobmatch  and thereby fill vacancies more quickly.

Universal Credit Payments are linked to the amount an employed Universal Credit claimant has earned. Since RTI (Real Time Information) was introduced HMRC already has the required information on each employee.

Universal Credit is being rolled out gradually and a national roll out will occur from October 2013.

Between April 2013 and 2017 Universal Credit will replace Income based Jobseekers Allowance, Income-related Employment and Support Allowance, Income Support, Working Tax Credit, Child Tax Credit and Housing Benefit. By 2017 it will be paid to everyone who has the right to receive it.

Posted byGerri McGinleyinPayroll

Married couples in UK to receive £200 tax break

The Prime Minister has proposed married couples should get breaks worth up to £200 a year.

However the allowance will not be available to couples that include higher rate taxpayers – in which one spouse is paid £42,285 from 2015/16 – this could be a double blow for higher earners, particularly in the wake of the child benefit cuts on families with one earner on more than 60,000 a year.

The proposal, will also let people transfer £1,000 of their personal tax allowance to their spouse or civil partner.

The measure will come into force in April 2015 if passed by parliament, just one month before the next national election and is expected to benefit around 4 million couples including same-sex couples in civil partnerships. From next year, same-sex couples will be able to marry under a new law passed by parliament in July.

Posted byLorraine McEvoyinPayroll

UK - Holiday pay should reflect overtime payments

A recent judgment has bent the rules under the Working Time Regulations and moved the UK closer to EU law

Calculating the correct amount of holiday pay owed to an employee under the Working Time Regulations 1998 has historically proven to be a tricky task for employers. The regulations require employers to identify an employee’s ‘normal working hours’ and a ‘week’s pay’ when calculating holiday pay and specifically say that non-contractual hours of work should be ignored. In practice, this isn’t as easy as it sounds.

A 2011 case, Williams v British Airways, shed some light on the situation. The European court held the regulations should be interpreted in the spirit of European working time law and that holiday pay should be calculated with reference to both basic pay and any other pay “intrinsically linked” to the work, such as overtime. Now those principles have been tested for the first time in the case Neal v Freightliner [2013]

Neal worked a 35-hour week at Freightliner’s depot in Birmingham. His contract required him to work 7-hour shifts, and also stated that he may have to work overtime when necessary. His shifts and working hours were determined by a roster system. He regularly worked up to nine hours each day and occasionally up to 12 hours to cover for his colleagues. He received enhanced pay premiums when working over and above his contractual seven hours a day. Neal believed he had to work the significant hours set out in the rosters and felt his holiday pay should reflect the actual pay he received rather than his basic salary alone.

The employment tribunal, applying the Williams case, highlighted that the Working Time Regulations do not adequately implement European law on working time. The tribunal held that hours worked by Neal over and above his contractual seven hours were “intrinsically linked” to his performance of his role, and it was irrelevant whether the overtime was voluntary or not.

It rejected the employer’s argument that workers might be encouraged to undertake paid overtime to manipulate the level of their holiday pay, concluding that, in practice, employers control the levels of overtime offered and accepted by their staff.

Neal had been underpaid in respect of his holiday pay entitlement and the parties arranged an out of court settlement.

This decision could be tested by the higher courts but, for the time being, any paid overtime (whether voluntary or not) should now be considered alongside other premiums in employers’ holiday pay calculations.  In effect, these calculations are moving towards being based on workers’ average earnings in the 12 weeks leading up to their holiday.    

Employers should review their overtime arrangements to ensure they have sufficient control over them, and can avoid abuse and manipulation of holiday pay. As an added complication, this decision relates to the four weeks’ holiday pay that workers are entitled to under European law.  It does not apply to the additional 1.6 weeks’ holiday that workers receive under UK law.  So it seems likely that the judgment will be appealed to clear up the confusion and avoid a situation where there are different rules for different weeks of a worker’s holiday. As always, if in doubt, employers should seek legal advice when calculating holiday pay to avoid receiving a costly and time-intensive tribunal claim. 

Posted byAlan KellyinPayroll