From 2014 every business, Charity and CASCs (Charities and Community Amateur Sport Clubs) will be entitled to an annual “employment allowance” of £2000 to reduce their liability for Class I secondary NICs.
It is expected that up to 1.25 million employers will benefit, with over 90 per cent of the benefit going to small businesses with fewer than 250 employees and it is envisaged that on average, employers with fewer than ten employees will see their employer NICs bill reduced by 80%.
To simply matters HMRC will introduce a new tick box on EPS referring to the employment allowance in the form of a “yes/no” indicator.
To claim the allowance, the employer will have to signify his intention to claim by completing the yes/no indicator just once. The employer will then offset the allowance against each monthly Class 1 secondary NICs payment that is due to be made to HMRC until the allowance is fully claimed or the tax year ends.
This Employment Allowance will apply per employer regardless of how many PAYE schemes that employer chooses to operate.
We are delighted to let you all know that we have been shortlisted by AccountingWeb for their Software Satisfaction Awards – Payroll Category. We would like to say a big thank you to all of our BrightPay customers that gave such positive feedback which has resulted in us being shortlisted. Customer satisfaction is paramount to us here in BrightPay. We will strive to ensure the highest level of customer satisfaction both in our product and service at all times.
The winners will be announced on the 7th November so wish us luck!
From this week HMRC will start to send four types of new messages to employers to help them keep their PAYE up-to-date.
These messages will take two formats:
1. The first three are generic electronic messages to warn the employer that their PAYE submissions and payments appear to have fallen into arrears.
2. The fourth one will be a letter, telling an employer that HMRC are cancelling a PAYE scheme that has been inactive for 120 days.
The electronic messages are not penalty notices and therefore an employer should not appeal against them. These messages do not replace the existing compliance communications, which will continue as now.
The aim of these messages is to help employers comply with their PAYE obligations and in particular get their businesses to submit and pay their PAYE to HMRC on time. This will help them get ready for 6 April 2014 when in-year penalties for late reporting and late payment will replace the current end-of-year PAYE penalties. HMRC wants to receive payments and returns on time; it does not want to charge penalties.
The messages warn that the employer may incur penalties in future, even if they have done nothing wrong for 2013-14 (for example if they are a smaller employer taking advantage of the current relaxation for ‘on or before’ reporting). If this is the case the employer does not need to contact HMRC but they should be preparing for 2014-15.
HMRC will update the wording of these messages in April 2014.
Where any of these conditions apply your employer scheme will be cancelled and a letter issued to your business address to advise you of the action taken. Once the scheme has been cancelled you will not be able to submit any PAYE submissions in Real Time. If your scheme should not have been cancelled the letter covers who you should contact in HMRC to request that your scheme is reopened.
The Mayor of London, Boris Johnson, has proposed that season tickets for commuters be considered as a salary sacrifice to give tax relief to those who have to travel to work. He has suggested that they be treated the same as the current Child Care Voucher or Cycle to Work Scheme. The employer would buy the season ticket and deduct the cost from the employee’s pay before tax is deducted. Therefore the employee would have the benefit of the ticket but pay tax on a lesser amount.
At the moment this is only a proposal and has been forwarded to the Chancellor for consultation.
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.
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.