HMRC received 11,500 tweets from frustrated callers in the last year complaining about long waits

Citizens Advice reported that those who took to twitter to complain spent an average of 47 minutes waiting to speak to someone. The charity said it helped with 295,000 queries in the past 12 months which could have required people to contact HMRC. Official figures from HMRC suggest on average wait time of 10 minutes. Citizens Advice calculated that hanging on the line to HMRC for 47 minutes will, charged at the standard landline rate, cost consumers £4.66 in call charges.

Citizens Advice looked at complaints made to the @HMRCgovuk Twitter account between September last year and August after those seeking help from the charity reported not being able to get through to HMRC to resolve issues.

Citizens Advice chief executive Gillian Guy said: "People are paying the price for not getting through to HMRC. From fines for not completing a tax return in time to under or overpayments for tax credits, people can be left out of pocket because they cannot speak to HMRC on the phone.

"Work and caring responsibilities means not everyone will be able to wait for three quarters of an hour to ask HMRC a question.

"We have consistently raised this issue with the Government. But evidence from across the Citizens Advice service, and our new research, shows HMRC is still failing to provide a timely service.

"There is already a clear demand to be able to speak to HMRC. With the roll-out of Universal Credit and big changes to tax credits just around the corner this is only going to grow. HMRC needs to urgently address the problems many people are experiencing with phone lines."

Posted byBrian O'KeeffeinHMRC

Error 1046: Authentication Failure is the most common issue when trying to submit your Real Time Information to HMRC

Error 1046, one of the most common issues that you may face when processing payroll. The Error 1046 will state: The supplied user credentials failed validation for the requested service.

BrightPay does not check your User/Sender ID and Password as we don’t know what they should be. BrightPay sends this information to the Government Gateway. If you get this Error 1046 it means that the Government Gateway has rejected the submission.

Is the User/Sender ID and Password correct?

Ensure that you can access the HMRC website at http://www.gateway.gov.uk/ using your User ID and Password that you entered in BrightPay. If you are unable to log in you can call the HMRC Online Services Helpdesk on 0300 200 3600.

Is your password greater than 12 digits?

When you are entering your password into the HMRC website, only the first 12 digits will be accepted. However when entering your password into the software it recognises all digits and deems anything after the first 12 as being incorrect causing the Error 1046. If your password is longer than 12 digits, only use the first 12 in BrightPay.

Is your Government Gateway activated?

Once you have registered to use HMRC’s Government Gateway your new Activation Code will be sent via post within 7 days. Once received you can log into HMRC online using your User ID and Password and activate the service. You must do this within 28 days of the date shown on the Activation Code letter.

Double check the information you entered in BrightPay!

Ensure that your PAYE reference number, Accounts office reference and HMRC office name are entered correctly and match the details that HMRC have for you. Check the references don’t have 'Z' instead of '2' or '0' in place of 'O'. Ensure your email address is correct and matches the one you have registered with HMRC.

Posted byBrian O'KeeffeinHMRCOnline filingPayroll SoftwareRTI

Automatic Enrolment: Employer Duties and Director Exemptions

Who is subject to the legislation?

Automatic enrolment legislation affects all individuals who are classified as workers. The legislation will affect all workers between the ages of 16 and 74 who work or ordinary work in the UK. A worker can be either under a contract of employment (an employee) or be a personal services worker who has a contract to perform work or services personally and are not providing the work or services as part of their own business.

Who is a personal service worker?

A personal services worker cannot send a substitute or sub-contract the work unless they have a legitimate reason to do so (e.g. Illness). A personal service worker will have a “contract of service” to perform services personally as opposed to a sub-contractor having a “contract for service”. Various indictors will determine whether a contract is a “contract of service” or a “contract for service” and an employer must take all relevant considerations into account and make a reasonable judgement.

Should a director be considered a worker?

A director will be classified as a worker if he or she both works under a contract of employment and there is at least one other person working for the company under a contract of employment.

Employer Duties with respect to Directors.

A sole director could not be considered a worker even if he has a contract of employment.
If an additional director was to join the company under a “contract of service” contract then the company does not need to consider whether or not they are doing this work on behalf of their own business. A director who is not an employee is always exempt. The initial director is still not classed as a worker because there is no one else working for the company under a contract of employment.

If an additional personal service worker is hired under a contract of service who is not a director, then an employer duty will arise in respect of this worker.

If a worker now joins the company under a contract of employment (as an employee), then an employer duty will arise in respect of this employee and also in respect of the director who has a contract of employment. This is because there is now another person working for the company under a contract of employment.

If your company has received a letter from the pensions regular informing you of your staging date and you believe automatic enrolment duties do not apply to you because a director exemption applies then can contact them by emailing customersupport@autoenrol.tpr.gov.uk . Visit this page to find a pre-populated email www.tpr.gov.uk/employers/what-if-i-dont-have-any-staff.aspx. This pre-populated email will prompt you to inform them of what type of director exemption applies, what the letter code for the company is, the PAYE reference and the companies house number.

Posted byBrian O'KeeffeinAuto EnrolmentPayroll Software

Childcare Voucher Scheme Vs New Tax-Free Childcare Scheme

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.

Posted byBrian O'KeeffeinHMRC

Correcting Payroll Errors

Correcting Payroll Errors using Full Payment Submission (FPS)

If a mistake has been made with an employee’s pay or deductions it can corrected by using your next Full Payment Submission (FPS) to update your year-to-date figures.

Correcting Payroll Errors using an Additional Full Payment Submission (FPS)

An additional FPS can also be sent to correct year-to-date figures providing it is sent before your next FPS is due. In the case of an additional FPS the same pay date should be used.

If an employee has been underpaid you can either send an additional FPS, on or before you pay your employee the additional amount or by the 19th of the tax month after you sent your original FPS. HMRC will include the correction in that month’s PAYE bill.

Correcting errors in an employee’s National Insurance deductions

Both FPS’s and additional FPS’s can be used to correct mistakes to National Insurance deductions.

If an employee has underpaid their national insurance in a particular month, only the equivalent of their following month’s national insurance liability can be taken from them the following month. The remainder must be recovered in another month. Pay any underpayment to HMRC straight away.

Example: Your employee underpaid by €80 in January. In February the employee’s national insurance is €60. This means you can only recover up to €60 towards their underpayment that month. The remainder will need to be recovered the following month.

If the underpayment was in a previous tax year

An Earlier Year Update (EYU) should be sent to HMRC stating the difference between what you originally deducted and the correct amount. The EYU will inform HMRC if you’ve deducted or repaid the difference to the employee. Once more if you have deducted too little you can’t recover more than the National Insurance due that month.

Correcting an employee’s student loan repayments

Both FPS’s and additional FPS’s can be used to correct mistakes once the difference has been repaid or deducted to the employee. Once more if you have deducted too little you can’t recover more than the student loan deductions due that month. 

If the mistake was in a previous tax year

If you have deducted too little you do not need to do anything. The employee can contact the Student Loans Company to see how it affects them. If you have deducted too much refund your employee and you can correct your year-to-date figures using an FPS on or before 19th April otherwise use an EYU.

Posted byBrian O'KeeffeinPayroll SoftwareRTI