Do You Employ Any Scottish Nationals? – If So Read This

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A Scottish rate of income tax (yet to be announced) will apply from 6 April 2016, allowing the Scottish Parliament to reduce the basic, higher and additional rates by up to 10% or increase them by any amount without limit. The Scottish rate will be administered by HMRC as part of the UK income tax system.

Employers will need to prepare now and ensure they understand the Scottish rate before it is implemented. Individuals with interests inside and outside Scotland may wish to determine beforehand whether or not they will be treated as Scottish taxpayers. Employers who employ Scottish taxpayers will need to ensure they have adequate arrangements in place to be able to correctly process the P.A.Y.E. for these taxpayers.

By early 2016 we are advised that HMRC will issue P.A.Y.E. ‘S’ codes for 2016-17, identifying employees and pensioners who should be treated as Scottish taxpayers. These S codes will have to be processed correctly by the employer under RTI.

Whether an individual is treated as a Scottish taxpayer in any one year in which they are UK resident will depend on whether or not they meet any one of three conditions. The first two conditions, centre on connections with Scotland or another part of the UK. The third condition relates to an MP, MEP or MSP.

Clearly this is a big change both for Employers and Scottish employees. Employers affected need to take steps to ensure their payroll software deals with this issue.

Green & Co can offer further advice and can also provide payroll services at a competitive price.

Please contact us for additional information if required.

Please note: This article is a commentary on general principles and should not be interpreted as advice for your specific situation.

Photo credit: freedigitalphotos.net

Free SAGE Seminar: RTI & Auto Enrolment

 

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Seminar Agenda:

9:00 – 9:30am Registration, coffee and biscuits

9:30 – 9:45am Introduction and welcome

9:45 – 10:45am Presentation by James Sponder of Sage

10:45 – 11am Q&A session

11:00am Finish

Come along and discover how to get the most out of your Sage package. Reserve your place on this free seminar by phoning 01633 871122, or email katie.williams@greenandco.com

For further information relating to the workshop, contact Jane Wootton on 01633 833507, or email jane@greenandco.com

Real Time Information (RTI) Penalties

The penalties for late filing PAYE under RTI have been kept the same for tax years 2012/2013 (pilot scheme) and 2013/2014, while RTI integrated in to businesses’ everyday activities. However, from October 2014, the penalty regime for late RTI returns will become effective. Late filing penalties will apply from 6th October 2014, and late payment penalties will apply from 6th April 2015.

Late filing penalties will apply on a monthly basis, where payment information is not received as expected on an Full Payment Submission (FPS), or where you haven’t informed the HMRC that no employees have been paid by sending an Employer Payment Summary (EPS). This will be dependent on the number of employees within the PAYE scheme, however, no penalty will apply for the first month in each tax year that returns are filed late, (this does not apply to employers operating annual schemes).

Number of Employees

Amount of monthly filing penalty per PAYE scheme

1 to 9

£100

10 to 49

£200

50 to 249

£300

250 or more

£400

Additional penalties can be incurred for returns over three months late. Currently, this amount is set at 5% of the tax and NICs that should have been shown on the late return.

All penalties are due for payment 30 days from the date of the penalty notice. Penalties not paid on time will attract interest.

HMRC agrees that if there is a reasonable excuse for the return being late, and that the return has been filed as soon as you reasonable could, then the penalty does not have to be paid.

If you think you have a reasonable excuse, or disagree with the amount of the penalty, you can make an appeal. This can be done online using HMRC’s Online Service, or in writing.

If you would like any help with reporting under RTI, please contact Green & Co on 01633 871122.

Please note: This article is a commentary on general principles and should not be interpreted as advice for your specific situation.

National Insurance cuts for Employers

In an attempt to promote job creation, it was announced in the Budget 2013, that firms based in the UK would be entitled to a £2,000 allowance towards employer National Insurance Contributions (NIC).  This Employment allowance will come into effect in April 2014 and is estimated to take 450,000 of the UK’s smallest businesses out of paying employer NICs.

For most employers, NIC’s are an additional levy of employment, charged at 13.8% of most pay. This allowance will diminish or reduce the burden on small businesses and hopefully encourage further employment.

George Osbourne announced that “For the person who’s set up their own business, and is thinking about taking on their first employee – a huge barrier will be removed. They can hire someone on £22,000, or four people on the minimum wage, and pay no jobs tax.”

It was described as the largest cut in the budget and the government expects only one third of all employers to have to make NIC when it comes into effect.

According to HM Revenue & Customs, the allowance will be claimed as part of the payroll process through RTI. However, a decision has not been made on how it will be implemented and legislation is expected to be introduced later on in the year.

Real Time Information: Free Sage Workshop

Date: Tuesday 5th March 2013

Time: Registration from 09.00

Place: Green Meadow Golf Club, Treherbert Road,  Cwmbran, Gwent NP44 2BZ

Green Meadow Gold Club

PAYROLL REPORTING IS CHANGING – ARE YOU READY?

HMRC are introducing a new way of reporting PAYE called REAL TIME INFORMATION or RTI.

What does this mean for your business?

Green and Co invite you to a free seminar informing you of how these changes will affect you!

We are delighted to have secured the services of Andrew Gibb from Sage to run this workshop on our behalf.

Agenda

09.00 – 09.30 Registration, coffee and biscuits

09.30 – 09.45 Introduction and Welcome

09.45 – 10.45 Presentation by Andrew Gibb of Sage

10.45 – 11.00 Q and A session

11.00 Finish

This seminar will help you understand the following:

  • What is RTI?
  • When does it come into effect?
  • What will it mean for your business?
  • What do you need to do to get ready?
  • How will you process Sage 50 Payroll in the future?

Andrew and our own in-house team will be available at the end of the session to answer any queries.

Come along and prepare yourself for the changes. Reserve your place on this free workshop by phoning 01633 871122 or email katie.williams@greenandco.com

For further information relating to the workshop contact Jane Wootton on 01633 833509 or email jane@greenandco.com

Further Sage events

More workshops will be taking place in 2013… look out for our blogs!!!

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P.A.Y.E – Are You Real Time Ready?

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All employers, commencing April 2013, will be required to inform HMRC every time that an employee is paid. This is being phased in over a six month period and all employers will be obligated to comply by October 2013. This is as opposed to the current system, in which HMRC are informed of an employee’s earnings on a yearly basis. The new system is to be known as ‘Real Time Information’ (RTI). Operationally, this is a radical and ambitious change that HMRC are implementing and they are hoping that this will bring the P.A.Y.E system in sync with modern working life. They also intend that RTI will work in accordance the forthcoming ‘Universal Credit’ benefit system. Can anyone say, ‘Big Brother’?

An employer will not be able to make an RTI submission to HMRC without providing the employee’s forename, surname, gender and date of birth. The full address is also mandatory for new starters but not existing employees. National Insurance Numbers are also requested. Employers must submit details to HMRC of the Tax and NI treatment of wages paid each time a payment is made, as well as the number of hours an employee has worked during that period.

Of course, all this means that manual payroll can no longer be undertaken and you will need to use either payroll software or, if you have nine or fewer employees, HMRC’s Basic PAYE Tools. Therefore it is strongly recommended that you start to review your Payroll procedures now so that you have sufficient information to comply when RTI is implemented. You will also need to get to grips with all the guidance on the HMRC website or speak to your payroll provider if you have one.  

Prior to RTI going live you will need to ensure that all your employee data is present and correct, talk to your payroll software providers about the upcoming changes and check with your BACS supplier if there is anything that needs doing in respect of payments. And finally, good luck!

If you have any queries please contact the Tax Department at Green and Co.

Please note: This article is a commentary on general principles and should not be interpreted as advice for your specific situation.

Image courtesy of amenic181 at FreeDigitalPhotos.net