eNews – September 2014
In this month’s enews we report on a variety of issues including an update for employers on payroll penalties and NMW increases. We are also including guidance on the introduction of the VAT Mini One Stop Shop for digital services.
We are amending the timing of enews following a review of the product. Enews will be published during the first week of the month, rather than at the end of the month. So please watch out for the next issue early in October.
Please do get in touch if you would like more detail on any of the articles.
RTI penalties for small employers delayed
HMRC have confirmed that employers with fewer than 50 employees will face automated in-year penalties for late real-time PAYE returns from 6 March 2015 which is later than had originally been anticipated. Those who employ 50 or more people will face penalties from 6 October 2014. HMRC will send electronic messages to all employers shortly to let them know when the penalties will apply to them, based on the number of employees shown in the department’s records.
Level of penalties
For the purposes above, an employer who, during a tax month, fails to make a return on or before the filing date will be liable to a penalty as follows:
- 1-9 employees – £100
- 10-49 employees – £200
- 50-249 employees – £300 and
- 250 or more employees – £400.
Ruth Owen, HMRC Director-General for Personal Tax, said:
‘Real Time Information is working well. Our most recent figures show that over 95% of PAYE schemes making payments to individuals are successfully reporting in real time, and 70% say that it is easy to do.’
‘We know from our experience of rolling out of RTI that to ensure a smooth transition for our customers it’s best to introduce changes in stages. This will allow us to update our systems and enhance our guidance and customer support as needed. We know that those who have had most difficulty adjusting to real-time reporting have been small businesses, so this staged approach means they have a little more time to comply with the new arrangements before facing a penalty. ‘
If you would like any help with payroll matters please do get in touch.
Internet link: Press release
VAT for digital businesses and the Mini One Stop Shop
The one-stop VAT service starts from 1 January 2015 for businesses supplying what are collectively known as ‘digital services’ in the EU. The effect of the measures are that a business will not have to account and pay VAT separately in each country where they do business which would otherwise be the case following a change in the place of supply rule.
Digital services essentially means broadcasting, telecoms and e-services including those selling apps, e-books, streaming services (e.g. sports/film/tv/music), dating services and journals, newspapers and magazines that are subscribed to electronically and smartphone games.
Change of place of supply
From 1 January 2015 the place of supply for VAT purposes for a EU business selling digital services will change. Currently, intra-EU supplies of digital services to non-business customers are subject to VAT in the member state where the supplier belongs.
From 1 January 2015 this changes, so that the VAT is due where the customer who receives the service lives or is located. This will ensure that UK consumers of these services will pay UK VAT no matter where the supplier of those services belongs.
In order that UK businesses supplying digital services do not have to register for VAT in every EU member state where they have customers, an optional VAT ‘Mini One Stop Shop’ (MOSS) online service has been set up by HMRC. Other EU member states will be building their own systems.
Sally Beggs, Deputy Director Indirect Tax, HMRC, said:
‘The VAT MOSS will save digital services suppliers from having to register for VAT in every Member State where they do business, removing a significant administrative burden. Businesses with their main operation or headquarters in the UK will register with HMRC to use the service.’
Businesses will be able to register for VAT MOSS from 20 October 2014. The service will be available to use from 1 January 2015.
If this affects your business and you would like more detailed information or guidance on the matter please do not hesitate to contact us.
Internet links: HMRC MOSS News story
National Minimum Wage rises
The National Minimum Wage (NMW) is a minimum amount per hour that most workers in the UK are entitled to be paid. NMW rates increases come into effect on 1 October 2014:
- the main rate for workers aged 21 and over will increase to £6.50 (currently £6.31)
- the 18-20 rate will increase to £5.13 from £5.03
- the 16-17 rate for workers above school leaving age but under 18 will increase to £3.79 from £3.72
- the apprentice rate will increase from £2.68 to £2.73 per hour.
It is important to note that these rates, which are in force from 1 October 2014, apply to pay reference periods beginning on or after that date.
Penalties
Penalties may be levied on employers where HMRC believe underpayments have occurred and HMRC now have the power to ‘name and shame’ non-compliant employers.
Most workers in the UK over school leaving age are entitled to be paid at least the NMW for details of exceptions see the Acas website.
If you have any queries on the NMW please do get in touch.
Internet link: Acas
Fuel Advisory rates
New company car advisory fuel rates have been published which took effect from 1 September 2014. HMRC’s website states:
‘These rates apply to all journeys on or after 1 September 2014 until further notice. For one month from the date of change, employers may use either the previous or new current rates, as they choose. Employers may therefore make or require supplementary payments if they so wish, but are under no obligation to do either.’
The advisory fuel rates for journeys undertaken on or after 1 September 2014 are:
| Engine size | Petrol |
| 1400cc or less | 14p |
| 1401cc – 2000cc | 16p |
| Over 2000cc | 24p |
| Engine size | LPG |
| 1400cc or less | 9p |
| 1401cc – 2000cc | 11p |
| Over 2000cc | 16p |
| Engine size | Diesel |
| 1600cc or less | 11p |
| 1601cc – 2000cc | 13p |
| Over 2000cc | 17p |
Other points to be aware of about the advisory fuel rates:
Please note that not all of the rates have been amended, so care must be taken to apply the correct rate.
- Employers do not need a dispensation to use these rates.
- Employees driving employer provided cars are not entitled to use these rates to claim tax relief if employers reimburse them at lower rates. Such claims should be based on the actual costs incurred.
- The advisory rates are not binding where an employer can demonstrate that the cost of business travel in employer provided cars is higher than the guideline mileage rates. The higher cost would need to be agreed with HMRC under a dispensation.
If you would like to discuss your car policy, please contact us.
Internet link: HMRC advisory fuel rates
Autumn Statement date announced and have your say
The government has announced that the Autumn Statement 2014 will take place on 3 December.
The government is seeking views of businesses, charities and members of the public, as to what they would like to see included in the Autumn Statement 2014. To have your say email autumnstatementrepresentations@hmtreasury.gsi.gov.uk
We will keep you informed of announcements.
Internet link: News