In this month’s enews we report on a variety of issues including an update for employers on payroll and NMW increases. We also report on the implementation of Universal Credit and the latest crackdown by HMRC utilising card payment transactions.
Please do get in touch if you would like more detail on any of the articles.
Advisory fuel rates for company cars
New company car advisory fuel rates have been published which took effect from 1 September 2013. HMRC’s website states:
‘These rates apply to all journeys on or after 1 September 2013 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 2013 are:
Engine size Petrol LPG 1400cc or less 15p 10p 1401cc – 2000cc 18p (17p) 11p (12p) Over 2000cc 26p (25p) 16p (18p)
Engine size Diesel 1600cc or less 12p 1601cc – 2000cc 15p (14p) Over 2000cc 18p
Please note that not all of the rates have been amended, so care must be taken to apply the correct rate. The amounts for the previous quarter are shown in brackets where the rate has been amended.
Other points to be aware of about the advisory fuel rates:
- 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
Data payment crackdown
HMRC have announced that for the first time they now have access to information on all credit and debit card payments to UK businesses. HMRC intend to use this information to aid them in a new crackdown on tax evasion.
Under new powers introduced from 1 September, HMRC can now access information from ‘merchant acquirers’ which are the companies that process card payment transactions. HMRC will use the information to determine the amount and value of transactions completed by a specific trader.
HMRC do not have access to personal data identifying the card owners or card numbers but this data will be used to ensure that traders have correctly accounted for all taxes due.
HMRC estimate that this information could reduce fraud by over £50 million a year.
Exchequer Secretary to the Treasury David Gauke said:
‘Tax evasion and the hidden economy cost the taxpayer £9 billion a year. While the majority of traders are honest, they may find themselves undercut by the minority who seek to lower prices by cheating the tax system.’
‘The Government has given HMRC nearly £1 billion to tackle fraud and evasion, and these new powers give HMRC an extra tool to ensure a level playing field between businesses, and also reducing opportunities for those who try and cheat the system.’
Internet link: News
HMRC chase those who have missed RTI deadlines
HMRC are writing to the 167,000 employers who have missed one or more of the deadlines for reporting their PAYE information in real time.
The majority of employers should have started to report their PAYE information under RTI from the first payday on or after 6 April 2013. According to HMRC more than 1.6 million employer PAYE schemes, covering over 40 million individual records, are already reporting under RTI.
If you receive a letter and would like help with your payroll procedures, or do not believe you need to report any payments, please do get in touch.
Internet link: Press release
Universal Credit criticised by NAO
The implementation of the Government’s welfare reform programme, Universal Credit, has been criticised in a report by the National Audit Office (NAO).
Universal Credit will merge a number of existing benefits into a single payment in order to reduce the costs and fraud associated with the current multi-benefit system.
Amyas Morse, head of the National Audit Office said
‘The Department’s plans for Universal Credit were driven by an ambitious timescale, and this led to the adoption of a systems development approach new to the Department. The relatively high risk trajectory was not, however, matched by an appropriate management approach. Instead, the programme suffered from weak management, ineffective control and poor governance. Universal Credit could well go on to achieve considerable benefits if the Department learns from these early setbacks and puts realistic plans and strong discipline in place for its future roll-out.’
The DWP will now extend pilot schemes to six more areas of the UK, with these sites taking on simple welfare claims.
Internet links: Response NAO report
HSE guidance on new first aid training rules
The Health and Safety Executive has issued guidance to help employers assess their first aid training needs and comply with amendments to the Health and Safety (First Aid) Regulations.
Under the amended regulations the requirement for workplace first aid training providers to be approved by the HSE is removed from 1 October 2013.The amendments cover carrying out a first aid needs assessment and selecting a first aid training provider.
Internet link: HSE press release
RTI issue affecting student loan borrowers
HMRC would like employers to be aware that they have identified an issue with some employees who have student loans.
A few of the employees in this situation have had their employment status incorrectly ‘ceased’ on HMRC’s PAYE systems and this incorrect information has been passed to the Student Loans Company (SLC).
The SLC have written to these borrowers, querying their employment status. Employees affected by this issue are being asked to reply to the SLC saying they have not ceased or changed employer.
HMRC are hoping to correct their systems in the next few weeks. They have identified that there is an issue getting this corrected information on to the student loans system and are taking steps to resolve this issue.
Internet link: HMRC website
HMRC issue guidance on the Statutory Residence Test
HMRC have issued some updated guidance on the Statutory Residence Test which took effect from 6 April 2013.
Residence is a complex issue, if you would like any advice in this area please do get in touch.
Internet link: SRT guidance
National Minimum Wage
National Minimum Wage rates increases come into effect on 1 October 2013:
- the adult rate will increase by 12p to £6.31 an hour
- the rate for 18-20 year olds will increase by 5p to £5.03 an hour
- the rate for 16-17 year olds will increase by 4p to £3.72 an hour
- the apprentice rate will increase by 3p to £2.68 an hour and
- the accommodation offset increases from the current £4.82 to £4.91 a day.
The accommodation offset rate is used where the employer provides you with accommodation, some of the value of which can count towards NMW pay.
It is important to note that these rates, which are in force from 1 October 2013, apply to pay reference periods beginning on or after that date.
Most workers in the UK over school leaving age are entitled to be paid at least the National Minimum Wage (NMW) for details of exceptions see the Acas website.
Deadline for ‘paper’ self assessment tax returns
For those individuals who have previously submitted ‘paper’ self assessment tax returns the deadline for the 2012/13 return is 31 October 2013. Returns submitted after that date must be submitted electronically or they will incur a minimum penalty of £100. The penalty applies even when there is no tax to pay or the tax is paid on time.
If you would like any help with the completion of your return please do get in touch.
Internet link: HRMC deadlines
Latest Job figures
According to the latest information published by the ONS, employment rose by 80,000 and unemployment fell by 24,000 in the three months to July.
The employment rate for those aged from 16 to 64 (for May to July 2013) was 71.6%, an increase of 0.2%. There were 29.84 million people in employment aged 16 and over.
The unemployment rate for May to July 2013 was 7.7% of the economically active population a reduction in 0.1%. There were 2.49 million unemployed people.
Between May to July 2012 and May to July 2013 total pay rose by 1.1% and regular pay rose by 1.0%.
Stephen Gifford, CBI Director of Economics, said:
‘These figures show the upturn in economic data we’ve seen through the spring and summer is starting to show up in job creation. Encouragingly, jobs growth in the private sector was more than three times greater than losses in the public sector.’
‘Despite better news on the direction of travel, youth unemployment is persistently high and growth alone will not address this problem.’
‘We’ve called on the Government to reduce employers’ National Insurance to help tackle this, and the launch of the Million Jobs campaign further emphasises the need for action to help young people enter a tough jobs market.’
Internet links: ONS report Press release