On 8 April 2015, HMRC updated its Starter Checklist.
An employer can use this Starter Checklist to gather the information they need to operate PAYE for a new employee. The checklist will help an employer to complete the necessary information related to a starter that must be shown on the first Full Payment Submission submitted covering a starter’s first payment of wages.
Where a starter does not have a form P45 issued by a previous employer to give their new employer before their first payday, the starter’s information given in the Starter Checklist will inform the new employer what PAYE tax code they should use for the starter’s first payday. The Starter Checklist replaces form P46 (no longer in use) which a starter was obliged to complete in the absence of a P45 from a previous employer.
The starter checklist can be completed online and then the finished form can be downloaded, saved, and printed out. Alternatively, a black and white copy of the Starter Checklist can be printed from the online Checklist. This could then be given the starter to fill out.
Do not send a printed copy of the starter checklist to HMRC; it’s for the employer’s internal use only. Where a Starter Checklist is completed, employers are advised to keep the form for the current and previous three tax years.
Important note: Employers are supposed to verify the information provided on a P45 or Starter Checklist. A birth certificate, photo driving license, passport, and utility bills, can all be used as part of verifying an employee’s name, date of birth, current gender, address, NI number, etc.
A complete list of all tax changes that took place on April 6 has been published on the gov.uk website.
Acting as a useful checklist, the following tax changes came into effect on Monday 6 April 2015:
- Individuals over the age of 55 have flexible access to their defined contribution pension savings
- The Income Tax Personal Allowance increases to £10,600
- The higher rate income tax threshold increases to £42,385
- The new Marriage Allowance comes into effect
- The starting rate of savings income tax reduces from 10% to 0% for savings up to £5,000
- The cash ISA limit increases to £15,240
- Child Trust Funds can now be transferred into Junior ISAs
- Spouses can now inherit their deceased partner’s ISAbenefits
- If an individual dies before the age of 75, they can now pass on their unused defined contribution pension savings free of income tax
- Beneficiaries of individuals who die under the age of 75 with a joint life or guaranteed term annuity can now receive any future payments from such policies free of income tax
- Employers will no longer have to pay employer NICs for employees under the age of 21
- Class 2 NICs for the self-employed can now be collected through Self-Assessment
- The Employment Allowance extends to include people employing care and support workers to look after themselves or family members
- A new annual remittance basis charge of £90,000 is introduced for non-domiciled individuals who have been resident in the UK in at least 17 of the last 20 years, and the charge paid by non-domiciled individuals who have been resident in the UK in at least 12 of the last 14 years has increased from £50,000 to £60,000
- Non-UK resident individuals, trusts, personal representatives and narrowly controlled companies are now subject to Capital Gains Tax on gains accruing on the disposal of UK residential property
- Capital Gains Tax annual exemption amount has increased to £11,100
- The Capital Gains Tax charge on disposals of properties liable to ATED extends to cover residential properties worth £1 million – £2 million
- The requirement that 70% of Seed Enterprise Investment Scheme money must be spent before EIS or VCT funding can be raised is removed
- The Fuel Benefit Charge multiplier for both cars and vans increases by RPI
- The Van Benefit Charge increases by RPI – in 2015-16 the Van Benefit Charge rate paid by zero emission vans is 20% of the rate paid by conventionally fuelled vans
- Tax Credit payments are stopped in-year where, due to a change in circumstances, a claimant has already received their full annual entitlement
HMRC has published webinars, emails and videos on the Construction Industry Scheme which show how the scheme works, taking on and paying subcontractors and how to meet your tax obligations.
You can get business emails from HMRC on the Construction Industry Scheme (CIS).
The next live webinar is on 8th May 2015 from 9am to 10am where you can ask questions during the presentation and get answers from the HMRC host. You will need to register and log in at least 5 minutes before the webinar is due to start.
With effect from 6th April 2015, the Employment Allowance has now been extended to include individuals who employ personal carers and support workers. Such individuals who were previously excluded from claiming the allowance in tax year 2014-15, will now be entitled to deduct up to £2,000 per annum from their liability to pay secondary Class 1 Employer National Insurance contributions (NICs).
The new measure is intended to support individuals who need to purchase care for themselves or others.
To check eligibility and for further information about the Employment Allowance, simply go to Employment Allowance Eligibility.
Shared parental leave has now officially come into effect, meaning parents whose babies are born, or whose children are adopted, on or after 5th April 2015 will now be able to share a 50-week pot of leave.
285,000 working couples a year are expected to be eligible for shared parental leave, according to the Department for Business Innovation and Skills.
How does it work?
· Eligible couples will be able to share parental leave if the mother opts to end her maternity leave and pay early
· Both parents can be off work at the same time or can take turns to take time off to look after the child.
· The leave can be taken in discontinuous blocks if required and each parent is permitted to submit three separate notices to book this
Statutory shared parental pay will be paid at the rate of £139.58 a week or 90% of average weekly earnings, whichever is lower
Who is eligible?
To qualify for Statutory Shared Parental Pay, one parent must be an employee and must pass the continuity of employment test (they must have worked for the same employer for at least 26 weeks at the end of the 15th week before the week in which the child arrives), whilst the other must meet the employment and earnings test (must have worked for at least 26 weeks in the 66 weeks leading up to the due date and have earned above the maternity allowance threshold of £30 week in 13 of those weeks).
Eligibility can be checked using GOV.UK’s quick and easy online tool.
BrightPay 2015/16 has full support for Shared Parental Leave and Statutory Shared Parental Pay (ShPP). For assistance with recording shared parental leave and processing ShPP in BrightPay, please view our dedicated support topic on Statutory Shared Parental Pay.
Employers are not to be issued automatic penalties for late submissions of up to 3 days .
HMRC have announced that they will not penalise employers for filing delays of up to 3 days. They have decided that late payment fees will continue to be risk assessed rather than automatic.
It is important to note that this does not mean that there is any change to the deadlines. FPS submissions must still be submitted on or before the payment date.
Any employer that was issued a late filing penalty between 6 October 2014 and 5 January 2015, and they were less than three days late can appeal online against the penalty.
Any employer with fewer than 50 employees are reminded that PAYE late filing penalties will apply to them from the 6th of March.
HMRC have advised that they will review the operation of the changes to the PAYE penalties by the 5th of April 2016.
Monday 6 April 02:00 – 18:00
Due to a scheduled upgrade you will experience a delay in receiving your online acknowledgement to PAYE End of Year submissions made using HMRC and commercial software between 02:00 and 18:00 on Monday 6 April. Your acknowledgement will be sent once the service is restored. Please do not attempt to resubmit your submission. HMRC apologises for any inconvenience this may cause.
The Childcare Voucher Scheme is a UK government initiative aimed at helping working parents to benefit from tax efficiencies in order to save money on childcare. The scheme is offered by many employers as a salary sacrifice scheme and implemented through the employer’s payroll. This means that parents who are in the scheme are able to sacrifice part of their salary (Tax and National Insurance free) in order to obtain childcare vouchers of an equal amount up to specified limits.
The employer also saves money because the amount each parent sacrifices from their salary is exempt from employers’ National Insurance Contributions. Employers can offer the scheme themselves or by using one of the voucher companies to do the administration for them. The fees these companies charge should be less than the savings the employer makes on National Insurance. Employers may also benefit from having a happier workforce and seeing a reduction in staff turnover.
Basic rate taxpayers can pay for up to £243 of childcare with vouchers each month. This can lead to an annual Tax and NI saving of up to £930 per parent. Higher rate tax payers can pay up to £121 per month and top rate tax players can pay up to £108 per month. The higher and top rate restrictions only apply to those who joined the scheme on or after 6 April 2011.
These vouchers can be used for any nursery, playgroup, nanny, childcare or au pair who is an Ofsted registered provider. These vouchers can be saved up by parents but are non-refundable.
New Tax-Free Childcare Scheme from Autumn 2015
From Autumn 2015 Tax-Free childcare will be available to nearly 2 million households to help with the cost of childcare, enabling more parents to go out to work. Unlike the childcare voucher scheme the new Tax-Free childcare scheme will not be available to parents who have a stay at home partner. The new Tax-free childcare scheme will give a 20% tax break to cover annual childcare costs of up to £10,000, providing savings of up to £2,000 per child.
Parents will be able to register and open an online account for the new Tax-Free childcare scheme by going to the GOV.UK website. Parents and others can then pay money into their childcare account as and when they like. They will also be able to withdraw money if they want.
The scheme will be available for children up to age of 12 (or children with disabilities up to the age of 17). 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. Any eligible working family can use the Tax-Free childcare scheme as it does not rely on employers offering it. Unlike the current scheme, self-employed parents can use the Tax-Free childcare scheme.
Parents who sign up to the current childcare voucher scheme will be able to remain in the scheme and will not be disadvantaged by the proposed 2015 changes. However after Autumn 2015 the childcare voucher scheme will no longer be available for new entrants. The new arrangement will not provide any National Insurance savings for employers (currently worth up to 12% for basic-rate taxpayers).
Parents who sign up to the current childcare voucher scheme will be able to remain in the scheme. However, if they move to a new employer after Autumn 2015, they will be considered to have left the current scheme and be forced to switch to the new arrangements.
In general families with high childcare costs will be better off under the Tax-Free childcare scheme while families with low childcare costs will be better off remaining under the Childcare Voucher Scheme.