The personal tax account (PTA) can be used to check your tax records and manage your details with HMRC online, without having to contact HMRC by phone or post.
- reviewing your PAYE coding notices & details of employment income
- filing self assessment returns
- obtaining state pension forecasts
- managing tax credits and child benefit payments
- making marriage allowance transfers
- advising HMRC about a change of address
- reviewing & updating details of benefits in kind you receive from your employer, e.g. medical insurance, company cars
- checking your National Insurance record
With the introduction of in-year dynamic coding, the PTA service is particularly helpful for employees. It’s important that HMRC has the correct employment information and estimate of total income for a tax year, to ensure that only appropriate tax codes are issued and the right amount of tax is paid by employees. Employees can check the details of their total estimated income and apply for any adjustments through their PTA, without having to call HMRC.
If we can be of assistance with any matters relating to taxation, including self assessment and PAYE, please do not hesitate to contact us.
Posted in Payroll, Personal tax
Tagged benefits in kind, Child Benefit, company cars, marriage allowance, medical insurance, National Insurance, PAYE, personal tax account, state pension, tax credits
From the start of the new tax year, payslips must show the total number of variable hours a worker has worked, meaning that it will no longer be acceptable to just show a total £ pay figure in some circumstances.
The guidance from ACAS is as follows:
‘From April 2019, a payslip must show the total number of variable hours a worker has worked. This is only required when workers get a different wage depending on the hours they have worked. This might be because they have worked overtime, the number of hours they work changes in each pay period, or the rate they get for working certain hours is different.
The payslip only needs to show the hours that actually vary. For example, if a worker is salaried to work for 20 hours in a pay period but also works 4 hours of overtime, only the additional 4 hours must be recorded.
These hours can be shown as a single total or they can be broken down.’
We suggest employers look at how their current payslip format can be amended to incorporate the extra data and stay within the new legal requirements.
If we can be of assistance with this, or any other aspect of payroll, please do get in touch. We offer a cloud based payroll solution which incorporates a secure, self-service employee portal, ensuring GDPR compliance.
Minimum workplace pension contribution rates are set to increase from April.
Current contribution rates:
Contributions rates from 6 April 2019:
Employers will need to inform their workers of the increase and ensure that they collect and pay across the new pension contribution amounts.
This is the last of the planned phased increases announced when auto enrolment was introduced. There has been some chatter about possible future changes to the auto enrolment system. This includes the possible removal of the lower earnings limit in the calculation of ‘qualifying earnings’ on which pension contributions are based and the reduction of the age trigger for auto enrolment which is currently 22. We’ll keep you posted!
Contact us today if we can be of assistance with any aspect of auto enrolment. We offer affordable and bespoke payroll solutions for any size of business.
Some employers may wish to give their employees a small gift or throw a staff party at this festive time of year. But what are the tax implications?
Small gifts to employees
Gifts can be classed as ‘trivial benefits’ and therefore exempt from tax as long as HMRC guidelines are adhered to:
- the cost of providing the benefit must not exceed £50 per employee
- the benefit must not be in cash form (including cash vouchers)
- the benefit must not be a reward for work or performance
- the employee must not be contractually entitled to the benefit
- the benefit must not be part of a salary sacrifice arrangement
One of the main conditions of tax exemption is that the cost of providing the gift or benefit must not exceed £50, including VAT. On occasions where an employer provides a benefit to a group of employees and the precise cost per person cannot be established, the average cost per employee can be used.
Where the gift consists of more than one item, e.g. a bottle of wine and a box of chocolates, then the total cost of the gifts is the cost of providing the benefit.
It should be noted that if the cost of the benefit exceeds £50 then the full cost becomes taxable, not just the amount exceeding £50.
The rules are different where the employer is a ‘close’ company and the benefit is provided to an individual who is a director, an office holder or a member of their household or their family. In this case, the exemption is capped at a total cost of £300 in a tax year.
HMRC guidelines for providing tax exempt parties / social functions for employees are basically that:
- the cost of the event must not exceed £150 per head
- the party / social function must be an annual event
- the party / social function must be open to all employees
Multiple annual parties / social events can be tax exempt as long as the combined cost of the events does not exceed the £150 per head limit.
If you’d like further information or advice on this, then please do contact us or refer to HMRC’s detailed guidance.
Do you have employment contracts in place for your employees? Do you have a staff handbook outlining your company’s policies and procedures?
If the answer is no, or if your contracts aren’t up to date, then we are pleased to be able to offer a new service to help you meet your legal obligations in this area.
Most employees are legally entitled to a written statement of the main terms and conditions of their employment, such as pay, working hours and holiday entitlement, within two calendar months of starting work. https://www.gov.uk/employment-contracts-and-conditions/written-statement-of-employment-particulars
Additional information regarding general conditions of employment, such as sick leave, pensions, grievance procedures, etc. can be provided in a staff handbook. The handbook allows you to outline your policies and procedures in more detail and provides all parties with clear guidelines should any issues arise.
Not having these documents in place can leave employers exposed to disputes over pay and conditions resulting in disgruntled employees, difficulties in recruiting and potentially expensive employment tribunal claims.
How we can help
We can now provide you with up-to-date, legally compliant employment contracts and staff handbooks at an affordable price.
Our fee structure for this new service is as follows:
12 months subscription, to include 4 employee contracts plus staff handbook with unlimited updates to cover any changes in employment law – £160
Additional contracts – £40 each
For more information please contact us.
By April ’19 businesses with taxable turnover above the VAT threshold (currently £85,000) must keep digital records for VAT purposes and provide their VAT return information to HMRC using ‘functional compatible software’. This means a ‘software program or set of compatible software programs which can connect to HMRC systems via an Application Programming Interface (API)’. This must be capable of:
- keeping records in digital form as specified by the new rules
- preserving digital records in digital form
- creating a VAT return from the digital records held in compatible software and submitting this data to HMRC digitally
- providing HMRC with VAT data on a voluntary basis
- receiving, via the API platform, information from HMRC to ascertain compliance.
Spreadsheets & incompatible software packages are initially permitted for keeping records, but must be used in association with ‘bridging’ software that will submit the required information to HMRC in the correct digital format.
We recommend that you take the following to steps to ensure you are ready for Making Tax Digital:
- establish if the April ’19 deadline applies to your business
- assess whether your current accounting system is compatible for MTD
One of the easiest ways of making sure you comply with HMRC’s MTD regime is to consider keeping your business accounting records digitally on cloud accounting software. There are several advantages to this –
- as your records are held online, you can access them anywhere at any time and on any device
- you can see a clear picture of your financial position in real-time & access a wealth of financial reports
- you can create & send digital invoices on the go, meaning your customers receive them in an instant
- you can get daily bank feeds sent directly to your software
- the reassurance of MTD compatible filing that matches HMRC requirements
- you can post expenses from photos of your receipts on your phone
How we can help
- we can provide digital software packages
- we can offer training & advice on XERO and Kashflow software packages
- we can offer bespoke bookkeeping & VAT services
- we can offer VAT filing for those on spreadsheet or non-MTD compatible software.
Please contact us for more information.
We’re here to help
With a new tax year fast approaching there are some key changes to be aware of:
- the tax free personal allowance will increase to £11,850 and the new emergency tax code will be 1185L.
- the National Living Wage NLW (for those aged 25 & over) will increase from £7.50 to £7.83.
- the National Minimum Wage NMW will increase as follows:
Employees aged 21-24 – from £7.05 to £7.38
Employees aged 18-20- from £5.60 to £5.90
Employees aged under 18- from £4.05 to £4.20
Apprentices aged under 19, or aged over 19 in the first year of their apprenticeship – from £3.50 to £3.70
- the minimum contribution rates for workplace pension schemes will increase to 5%, with a minimum of 2% employer contribution. (eg. employer 2%, employee 3% contribution)
- Statutory Sick Pay will increase from £89.35 per week to £92.05 per week.
- Statutory Maternity, Paternity, Adoption and Shared Parental Pay will increase from £140.98 per week to £145.18 per week.
the repayment threshold for student loans will increase as follows:
Plan type 1 loans from £17,775 to £18,330
Plan type 2 loans from £21,000 to £25,000
Please do not hesitate to contact us if we can help you meet your payroll and workplace pension duties.
Posted in Payroll
Tagged Auto Enrolment, national living wage, national minimum wage, NLW, NMW, PAYE, SMP, SSP, student loans, tax, workplace pensions