In this month’s enews we advise on several issues relevant to employers. We also report on the help available for those affected by floods.
Please contact us if you would like any further information.
The Government has announced further details of the Employment Allowance which is available from 6 April 2014. Eligible employers can reduce their employer Class 1 NICs by up to £2,000 each tax year.
The Employment Allowance can be claimed by a business or charity (including Community Amateur Sports Clubs) that pays employer Class 1 NICs on their employees’ or directors’ earnings.
However there are some circumstances which may limit the availability of the allowance:
- if a company belongs to a group of companies or a charity is part of a charities structure, only one company or charity can claim the allowance
- the £2,000 Employment Allowance can only be claimed against one PAYE scheme, even if the business has more than one PAYE scheme.
Not all businesses can claim the Employment Allowance and the government guidance gives the following details of excluded employers.
You cannot claim the Employment Allowance, for example if you:
- employ someone for personal, household or domestic work, such as a nanny, au pair, chauffeur, gardener or care support worker
- already claim the allowance through a connected company or charity
- are a public authority, this includes; local, district, town and parish councils
- carry out functions either wholly or mainly of a public nature (unless you have charitable status), for example:
- NHS services
- General Practitioner services
- the managing of housing stock owned by or for a local council
- providing a meals on wheels service for a local council
- refuse collection for a local council
- prison services
- collecting debt for a government department
If you would like any guidance on claiming the allowance please do get in touch. If we deal with your payroll we will ensure this matter is dealt with on your behalf.
Internet link: Gov.uk
Increases to NMW penalties and latest targets
The Government has announced that rogue employers who do not pay their workers the National Minimum Wage (NMW) will face an increased penalty of up to £20,000 as part of a Government crackdown.
Currently employers that break NMW law must pay the unpaid wages plus a financial penalty calculated as 50% of the total underpayment for all workers found to be underpaid. The maximum penalty an employer can face is £5,000.
The Government plans to increase the financial penalty percentage from 50% to 100% of the unpaid wages owed to workers. The maximum penalty will increase from £5,000 to £20,000. Regulations introducing these new limits are subject to Parliamentary approval and are expected to be enacted this month.
Major record labels involved in this year’s Brit Awards are among the latest targets of HMRC’s continued crackdown on unpaid internships.
HMRC have written to record labels and event companies warning them about the consequences for non-payment of the NMW for any unpaid interns they take on. HMRC intend to follow up these letters with compliance visits later in the year to ensure the rules are being followed.
Michelle Wyer, HMRC’s Assistant Director NMW, said:
‘Non-payment of the National Minimum Wage is not an option, it’s the law, and we’re letting the music industry know that we’ve got them in our sights. If they are not playing by the rules, now is the time to put things in order.
Last year we fined over around 800 employers, so our message is clear: if you are not paying your interns, but should be, come forward now and put things right to avoid a penalty.’
Internet link: Press release
Help for those affected by floods
The Prime Minister has announced a package of measures to help flood affected businesses get back on their feet. The package of measures includes:
- A Government Business Support Helpline providing comprehensive advice and support to businesses affected by floods. The helpline number is 0300 456 3565.
- A new Business Support Scheme to provide hardship funding for SME businesses in areas affected by the floods. Both businesses that have been flooded, and businesses that are in affected areas and have suffered significant loss of trade, will be able to apply for support. Eligible businesses will be able to claim for funding for things like immediate clean-up costs, materials, and exceptional costs to help them continue trading.
- Extra time for businesses to file accounts without any penalties.
- All affected businesses will be able to apply to their local authority to get business rate relief for 3 months.
- HMRC will also set up a new hotline for those who have been affected by flooding and may have difficulties in meeting their tax liabilities. HMRC will look to offer up to 3 months additional time to pay. This will cover all taxes owed to HMRC, including VAT, PAYE and corporation tax. The helpline number is 0800 904 79000800 904 7900.
Help is also available for communities affected. To read more about the help on offer visit the links below.
No penalties for some late Self Assessment returns
HMRC have announced that more than 10 million tax returns were filed on time meeting the 31 January deadline.
Approximately 8.5 million returns were filed online with the rest being paper filed. Perhaps not surprisingly the busiest day for tax return submission was 31 January when HMRC received over half a million returns.
For those failing to meet the deadline there is an automatic £100 late filing penalty regardless of whether the tax has been paid on time or indeed there is a refund due. Further penalties may also be imposed for continued failure to submit the return.
It has been widely reported that HMRC would not be charging penalties where returns were submitted before midnight on 15 February 2014. However this ‘reprieve’ only applies in limited circumstances as set out in the following HMRC statement:
‘We haven’t extended the Self Assessment deadline. Tax returns and any tax due must be received by HMRC by midnight tonight 31 January.
If someone has registered for our Online Service or existing customers have lost their User ID or password and realise they have left it too late we will allow a bit of extra time for this information to be received. This only applies to taxpayers who did the following between midnight on 21 January and midnight on 31 January 2014:
- enrolled for the Self Assessment online service, or
- requested a replacement user ID or password’
If you are one of the half a million people who have not yet submitted your self assessment return and you would like some help please do get in touch.
HMRC warning about phishing scams
HMRC are warning taxpayers to be wary of the latest in a long line of email phishing scams that claim to offer tax rebates in return for bank account details.
HMRC have received over 23,000 reports of phishing scam emails in the three months to the 31 January 2014 self assessment deadline which is a 47% increase on the same period in 2013.
HMRC have confirmed that it never contacts taxpayers via e-mail regarding a refund and advised anyone who receives an email claiming to be from HMRC:
- not to click on any links or attachments
- forward it to firstname.lastname@example.org and then
- delete it permanently.
HMRC have published advice and examples of typical fake emails at www.hmrc.gov.uk/security/index.htm.
Internet link: News
PAYE end of year approaching
HMRC are reminding employers that with the end of the 2013/14 tax year approaching they will soon need to make their final 2013/14 PAYE (RTI) submission.
For most employers, the final submission will be their final Full Payment Submission (FPS) which advises HMRC about the very last employee payments for 2013/14 and this needs to be made on or before 5 April 2014. Details of how to make the final submission can be found on the HMRC website using the link below.
If we deal with the payroll on your behalf we will ensure this matter is dealt with on a timely basis.
Internet link: HMRC news
Electronic messages to employers
HMRC have issued an electronic warning message to employers who have not submitted their Full Payment Submission (FPS) return(s) during the January tax month. The message is intended to be a reminder to employers and is not a penalty notice.
HMRC are advising employers who receive this message that they should check that they have sent all the submissions that are due for their PAYE scheme.
If employers have notified HMRC recently that their business has ceased, then they can ignore the electronic message and do not need to contact HMRC.
HMRC started issuing these messages in December 2013 and this following link sets out instances where an employer may receive a non-filing message, although they have filed on time and where not action is required.
Internet links: HMRC news
Employee travel disruption
From time to time and particularly with the current weather conditions, travel disruption can affect an employee’s ability to get to work on time, or in some cases at all. For situations ranging from public transport cancellations to severe weather, employers and employees should consider how this could impact on the workforce.
Acas provide some useful guidance on these issues.
Internet link: Acas