In this month’s enews we update you on the changes to payroll reporting procedures for Real Time Information.
Please do get in touch if you would like more information on any of the articles.
Real Time Information – get ready
In April 2013 HMRC are introducing a new way of reporting PAYE information, known as Real Time Information (RTI).
‘Real Time Information’ means that employers, or their agents, will tell HMRC about employees’ pay and deductions on or before the time they are paid to the employees as part of their payroll process. Payroll software will be used to collect the necessary information and send it to HMRC electronically.
It had previously been announced that most employers will be legally required to report payroll information in ‘real time’ from April 2013, with all employers doing so before October 2013. HMRC will advise employers when they need to start reporting under RTI.
HMRC are currently trialling the RTI using a pilot scheme for a small number of employers. According to the latest press release:
The pilot is….. ‘on track and going well. It is early days and we are cautiously optimistic.’
‘HMRC also remain on track for all micro, small and medium-sized employers and most large employers and payroll bureaux to begin sending payroll information to HMRC in real time in April 2013, and for all employers to be routinely reporting PAYE in real time from October 2013.’
‘HMRC will be contacting some of the largest employers and payroll bureau shortly to discuss opportunities for them to start reporting PAYE in real time early to avoid end-of-year reporting for 2012/13.’
It appears that many employers will need to be ready for RTI from April 2013. If you would like any further information regarding RTI or would like help with your payroll please do get in touch.
Internet link: HMRC RTI news
Six new taskforces launched by HMRC
HMRC have announced that they have launched six new taskforces which will target traders who do not pay the right amount of tax. The taskforces will tackle:
- Indoor and outdoor markets in London
- Taxi firms in Yorkshire and East Midlands
- Property rentals in East Anglia, London, Yorkshire and the North East
- Restaurants in the Midlands
HMRC Taskforces are specialist teams which look into specific high risk trade sectors in targeted areas of the UK. The teams will visit businesses and examine their records and carry out other checks and investigations.
David Gauke, the Exchequer Secretary, said:
‘HMRC is on target to collect more than £50m as a result of the taskforces launched in 2011/12.’
‘We have made it clear that we will not tolerate tax evasion – everyone needs to pay the taxes they owe in full. We are determined to crack down on the minority who choose to break the rules. It is not fair that at a time when most hard-working people are paying the right tax, others are trying to get out of paying what they should.’
HMRC’s Mike Eland, Director General Enforcement and Compliance, said:
‘These six new taskforces will bring together specialists from across HMRC to tackle tax dodgers. If you have paid all your taxes you have nothing to worry about. But deliberately evading tax you should be paying can land you with not only a heavy fine but possibly a criminal prosecution as well.’
‘This is not an empty threat – HMRC can and will track you down if you choose to break the rules.’
Internet link: Press release
Working beyond state pension age
The Office for National Statistics has published a report looking at those working beyond state pension age. The report, ‘Older Workers in the Labour Market – 2012’ includes some interesting statistics:
- The number of people of state pension age and above in employment has nearly doubled over the past two decades, from 753,000 in 1993 to 1.4 million in 2011.
- Older workers are far more likely to be self-employed than their younger counterparts: 32% compared with 13%.
- Around two-thirds of the older workers are part-time but they are generally doing this shorter role with the same employer. Eight in every 10 of older workers have been with their employer for five years or more.
- Men working later in life tend to stay on in higher skill roles while women tend to stay on in lower skill roles.
- Just over a half (51%) of older workers are in small organisations of fewer than 25 employees.
To read more access the link below.
Internet link: Office for National Statistics
End of Employment Settlement
The CBI have commented on the Business Secretary, Vince Cable’s plans to introduce simplified settlement agreements, designed to enable employers and employees to agree mutually acceptable terms for ending employment.
Neil Carberry, CBI Director for Employment & Skills, said:
‘Today’s announcement will simplify the process of ending an employment relationship in a way which is acceptable to both sides.’
‘Simplified settlement agreements will give firms the confidence to have a frank conversation about ending employment on fair terms, without the fear of a drawn-out and costly tribunal claim.’
‘The CBI has long taken the view that simpler and more legally certain settlement agreements would be more effective for employees and businesses, especially smaller firms.’
Internet link: Press release
P11D deadline looming – avoid rejections
HMRC are reminding employers that the forms P11D, P9D and P11D(b) which detail expenses and benefits provided to employees for the tax year 2011/12 are due for submission to HMRC by 6 July 2012.
HMRC are warning employers to ensure the forms meet their quality standards.
HMRC are advising:
‘HMRC will reject P11Ds that don’t meet the standard. This means:
- for online submissions you’ll need to correct any problems before being able to file successfully
- for paper forms we’ll return the forms to you and you’ll need to correct and re-send them.’
‘If you have already told us you don’t need to complete P11D, P11D(b) or P9D then you don’t need to take any further action.’
‘If you have already made a nil P35 return but ticked the ‘P11D(b) to follow’ box you should file it now.’
‘If you need to make an adjustment to the Class 1A National Insurance contributions on the P11D(b), remember not to complete Box C. You should tick the checkbox and then complete Section 4 of the form P11D(b).’
For further guidance on the correct completion of the forms and how to avoid rejections please use the links below.
Please do contact us if you require any help with the completion of the forms.
Internet links: HMRC P11D quality standard HMRC guidance on completing form P11D(b)
No cap on reliefs for charitable giving
Following representation from interested parties the government has announced that it no longer intends to proceed with the proposed capping of some tax reliefs including charitable giving.
Plans to cap tax relief on charitable donations have been scrapped by Chancellor George Osborne in a reversal of one of the measures announced in the Budget.
The cap, which was designed to limit relief at £50,000 or 25% of income, was proposed in the Budget but resulted in protests from charities who were concerned that they could lose a significant proportion of their income.
The government has confirmed that it will be pressing ahead with the cap on income tax reliefs for wealthy people which do not relate to charitable donations.
Since the Budget announcement, the Treasury has been holding discussions with charities and major donors to discuss the scale of impact which they believed the cap could have on charitable giving.
John Low, Chief Executive of the Charities Aid Foundation, said:
‘We are delighted that the Government has responded to the challenging calls from philanthropists and charities across the country and taken the bold decision to exempt charitable donations from the cap on tax relief.’
‘We realise the Government is responding to truly exceptional financial circumstances and is having to make tough decisions about public finances. We acknowledge and welcome the Chancellor’s decision to do the right thing and exempt charity donations from the cap. We thank Ministers for the support they have shown to charities large and small, which are so vital to the health of our country.’
Internet links: BBC news CAF press release
No VAT increase on pasties
In the Budget it was announced that the government proposed to charge standard rated VAT on certain hot food items such as pasties.
After campaigns by interested parties the government has now decided not to proceed with this change. The letter from David Gauke, the Exchequer Secretary, details the government’s revised approach.
The letter also details the government’s proposal to charge 5% VAT on static caravans rather than the original intention of 20% standard rated VAT.
VAT is a complex issue, if you would like any help in this area please do get in touch.
Internet link: Letter