In this month’s enews the majority of issues we report on are relevant to employers and individuals. Please contact us if you would like any further information on any of the articles.
Auto enrolment tool
Under Pensions Auto Enrolment employers must:
- ‘auto enrol’ eligible employees into a pension scheme
- make employer pension contributions for them, and
- make deductions of employee pension contributions from the employees pay.
Although the rules came into force from October 2012, they only impact on the largest employers from that date, as few employers have a workforce of more than 120,000. For those employers with a more modest number of employees the start dates vary by number of employees and PAYE reference.
The Pensions Regulator has released a tool which details the start date for auto enrolment. To access the tool and check the start date for a particular PAYE scheme please use the following link.
Internet link: Pensions regulator tool
Real Time Information
HMRC are issuing final reminders to employers to ‘act now’ in order to be ready to report PAYE under Real time Information (RTI).
HMRC have advised that they are writing to employers and pension providers to formally notify them that they must start reporting under RTI from the first payday on or after 6 April 2013.
The letters are being sent throughout February 2013 and are designed to prompt employers who have not yet taken action to get ready to send their PAYE to HMRC in real time.
Employers should have plans in place to update or acquire new RTI ready payroll software and/or have discussed the issue with their software provider, payroll bureau, or agent if they have one.
The letter includes a checklist which explains the key steps employers need to take before April 2013 to make sure they are ready for reporting PAYE in real time from 6 April 2013. More information is available on HMRC’s website.
Internet link: HMRC news
Paying HMRC by Bill Pay
The ICAEW has reported that HMRC are aware that there are problems with the Bank of Santander’s Bill Pay service which is used by many individuals to pay their self assessment tax liabilities by credit or debit card.
HMRC have issued a statement giving advice on other ways to pay and also confirming that payments made late because of this problem will not incur interest or penalties.
HMRC advised the ICAEW that:
‘The Bank of Santander is having problems with their Bill Pay service that customers use to pay their tax by credit card or debit card. We are working with them to sort this out.
There are other ways you can pay us. These are:
By Faster Payments. You can find out more at: http://www.hmrc.gov.uk/payinghmrc/selfassessment.htm#5
At your bank
At the Post Office
By Debit/Credit card
You can find out more about these other methods of payment at: http://www.hmrc.gov.uk/payinghmrc/selfassessment.htm
Please continue to try to pay us, but if your payment is late because of the problems Santander is experiencing you will not have to pay a penalty or interest for late payment.’
Internet link: ICAEW Tax Faculty
Tax rebate phishing scam
HMRC are warning taxpayers not to fall victim of scam emails sent by fraudsters. In 2012 taxpayers reported almost 80,000 tax rebate phishing emails and HMRC took action to close down 522 illegal sites.
The emails follow the same general format and promise a tax refund in exchange for personal, credit card or banking details. Those who respond risk opening their account to fraud and having details sold on to organised criminal gangs. The emails often link to a clone of HMRC’s website to make the email appear genuine.
Gareth Lloyd, Head of Digital Security for HMRC said:
‘HMRC does not email customers about tax refunds – we only ever contact customers who are genuinely due tax back in writing, by post.’
‘If anyone receives an email offering a tax rebate and claiming to be from HMRC, please send it to firstname.lastname@example.org before deleting it permanently. HMRC does everything it can to ensure customers are safe online and we are working closely with other law enforcement agencies to target the criminals behind this serious crime.’
HMRC also advise taxpayers to:
- Check the advice published at www.hmrc.gov.uk/security/index.htmwhere they can see if the email received is listed.
- Do not click on websites or links contained in suspicious emails or open attachments.
- Follow advice from www.getsafeonline.co.uk
- Anyone who has answered one of these emails should forward the email and disclosed details to email@example.com
- If you have reason to believe that you have been the victim of an email scam, report the matter to your bank/card issuer as soon as possible.
Internet link: Press release
HMRC report self assessment statistics
HMRC have reported that a record 9.61 million people submitted their self assessment tax return on time this year.
According to the HMRC statistics of the 10.34 million people in self assessment, 92.9% taxpayers met the return deadlines of 31 October 2012 for paper and 31 January 2013 for online returns.
Of the 9.61 million on time tax returns, 7.93 million (82.5 per cent) were sent online, which is a record number. The remaining 1.68 million (17.5%) were sent on paper.
Anyone who hasn’t yet sent their 2011/12 tax return to HMRC will have already incurred a £100 late filing penalty. To avoid any further penalties, they should send their return as soon as possible, as well as paying any outstanding liabilities for the 2011/12 tax year.
The penalties for late Self Assessment returns are:
- an initial £100 fixed penalty, which applies even if there is no tax to pay, or if the tax due is paid on time
- after three months, additional daily penalties of £10 per day, up to a maximum of £900
- after six months, a further penalty of 5% of the tax due or £300, whichever is greater; and
- after 12 months, another 5% or £300 charge, whichever is greater.
There are also additional penalties for paying the liability late of 5% of the tax unpaid at: 30 days; six months; and 12 months respectively.
Please do contact us if you would like any help in this area.
Internet link: HMRC press release
HMRC win furnished holiday lettings test case
HMRC have been successful in a test case which considered the tax reliefs available for Furnished Holiday Lettings (FHL). Provided that certain conditions are met, FHL are treated as a trade for both income and capital gains tax purposes, often allowing access to valuable reliefs.
However, the inheritance rules (IHT) are different. Business Property Relief can allow up to 100% relief on business assets but FHL are not automatically included. For many years, HMRC allowed relief but have changed their policy and taken a test case, which they have won.
This means IHT would be due on the full value of an FHL.
If you have concerns in this area and would like any advice please do get in touch.
Shared Parental Leave
Proposals to change the way parents can share maternity leave have been outlined as part of the Children and Families Bill.
The government plans to change the current arrangements which have been criticised by some employees as being ‘inflexible’.
The Bill also introduces the extension of the right to request flexible working to all employees not just parents and carers.
Under the new system:
- Employed mothers will still be entitled to 52 weeks of maternity leave regardless of the length of their employment.
- Mothers can choose to end their maternity leave after the initial two week recovery period; working parents can then decide how they want to share the remaining leave.
- Fathers will have a new right to take unpaid leave to attend two antenatal appointments.
- There will be new statutory payment for parents on shared parental leave with the same qualifying requirements that currently apply to statutory maternity and paternity pay.
- Those who have adopted a child will be entitled to the same pay and leave as birth parents.
Please be aware that these changes are proposal at present. We will keep you informed of developments.
Internet link: Press release
Tackling long term sickness absence
The government has announced proposals to introduce a new independent assessment and advisory service aimed at getting people back to work. The service will help businesses tackle long term sickness absence in the workplace.
The scheme is expected to save employers up to £160 million a year in statutory sick pay and increase economic output by up to £900 million a year.
The Minister for Welfare Reform, Lord Freud, said:
‘Long-term sickness absence is a burden to business, to the taxpayer and to the thousands of people who get trapped on benefits when they could actually work.’
‘So for the first time, all employers, big or small, will have access to a service that offers the early support they need to keep people in work and fulfil their aspirations.’
The independent occupational health assessment and advice service is expected to be up and running in 2014.
Internet link: Press release
Health and Safety reforms
The government has announced that they have made significant progress in reforming Health and Safety requirements. The government has been working towards implementing some of the recommendations made in the Löfstedt Report in 2011 and the Young Report in 2010.
Steps taken to date include:
- scrap or simplify more than half of health and safety legislation by 2014
- the clarification of Portable Appliance Testing (PAT) requirements and
- a reduction of one third in the number of inspections made by the Health and Safety Executive (HSE).
Professor Löfstedt said the government is ‘supporting a more risk-and evidence-based approach to health and safety‘.
Charities online Gift Aid service
HMRC have announced that claiming gift aid repayments will be quicker and easier for charities and sports clubs from April 2013.
HMRC are writing to 110,000 charities and Community Amateur Sports Clubs advising them that, from 22 April 2013, they can enrol to make repayment claims online, via the HMRC website using a new service, called Charities Online.
Charities will be able to get information on how to use the system from the HMRC website at www.hmrc.gov.uk/charitiesonline
Internet link: Press Release