Newsletter – July 2012

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.

 

The Tax Return Initiative

Higher rate taxpayers who have failed to submit tax returns are being offered the opportunity to come forward and pay up under a time limited HMRC campaign. The Tax Return Initiative is aimed specifically at people liable to pay higher rate tax that have been told to submit a self assessment tax return for 2009/10 or earlier, but have failed to do so. The Tax Return Initiative is also open to any individual who has tax returns to submit to HMRC for these years.

Individuals have until 2 October 2012 to:

  • let HMRC know that they want to take part,
  • submit completed returns, and
  • pay the tax and National Insurance Contributions (NICs) that they owe.

By coming forward voluntarily through the initiative, taxpayers will receive better terms and any penalty they pay will be lower than if HMRC comes to them first.

Where taxpayers fail to take advantage of the initiative, HMRC will use its powers to pursue outstanding returns and any unpaid tax and NIC together with significant penalties of up to 100% of tax due.

Marian Wilson, head of HMRC Campaigns, said:

‘This campaign is part of a wider HMRC initiative to provide support and guidance to the public on tax obligations and is aimed at people who fail to submit their tax returns on time and pay what they owe.’

‘The campaign provides a three-month opportunity for those who want to get their tax affairs up to date to come forward. Our aim is to make it easy for them to contact us and send in completed tax returns, putting their affairs in order. Penalties will be higher if we come and find people after the opportunity and some could face a criminal investigation. I urge people to come forward and disclose unpaid tax voluntarily.’

Internet links: Press release Tax Return Initiative Campaign

Pensions Auto Enrolment

From October 2012 the largest employers will have to comply with Pensions Auto Enrolment. Employers will have to identify eligible jobholders and advise them of the employer’s obligations under the legislation. The staging date for those with more modest workforces may be some years off. Staging dates for all employers can be found by visiting the link below.

The Pensions Regulator together with the Department for Work and Pensions have developed a set of template letters which include all the details employers are required to communicate with their employees.

The comprehensive letters can be tailored to suit an organisation and employees’ circumstances.

If you would like more information on your obligation as an employer please do get in touch.

Internet links: Pensions Regulator News Staging dates

Real Time Information

HMRC are advising that over 1,300 employers will join the Real Time Information (RTI) pilot between now and September 2012.

Stephen Banyard, Acting Director General for Personal Tax, said:

‘RTI is on track and the pilot is going very well. We started in April with just 10 employers and now we’ve successfully received over 1.7 million individual records from 338 PAYE schemes.’

‘Following the success of the first pilot stage, more PAYE schemes will join the RTI pilot, as planned, and by the end of September up to 1,300 employer schemes will be reporting PAYE in real time.’

‘We are also seeing external confidence in the pilot and we’ve responded to that by offering more large employers, payroll bureaux, new employers and software developers the opportunity to join the RTI pilot or to expand existing involvement in advance of the launch date in April 2013.’

HMRC expect most employers to begin RTI reporting in April 2013. All employers will be routinely reporting PAYE in real time by October 2013, in time for the introduction of Universal Credit.

HMRC have updated their frequently asked questions on RTI and also published information on RTI for payrolls involving ‘expat’ employees.

Internet links: Press release RTI FAQs RTI expats

Guide to importing and exporting

HMRC have updated their information pack ‘Guide to importing and exporting: Breaking down the barriers’.

The information pack is a guide for those importing or exporting goods. It acts as a guide to help anyone getting started with importing / exporting and gives details of the procedures involved in these activities.

If you would like any help in this area please do get in touch.

Internet link: HMRC information

Online starting in business tax guide

HMRC have been working with interested parties to produce a ‘Starting your own Business’e learning tutorial.

To access the tutorial, visit the link below.

Internet link: HMRC e learning tutorial

Olympics and business

With the Olympics upon us, Acas are advising employers to be aware of a number of issues the most likely of which is employees requesting more flexible working arrangements. Employers need to consider how they are going to minimise potential disruption so that businesses run smoothly whilst managing employee expectations.

Acas expect employees to fall mainly into two groups:

  • those planning to take time off during the Games because they are spectators or volunteers.
  • those not planning to take time offbut who:
    • hope to watch on the television or via the internet whilst at work – wanting flexible working arrangements
    • get fed up with all the fuss and any perceived favouritism shown to those with sporting interests and want to take annual leave during the school holidays.

Acas has published guidance to help you plan ahead and ensure your business runs smoothly. The guidance considers such issues as:

  • managing attendance
  • working flexibly
  • dealing with performance issues, and
  • understanding the legal rights of volunteers.

Sunday Trading

Sunday Trading restrictions are suspended during the Olympic and Paralympics Games. These rules limit Sunday opening hours for some shops to six continuous hours between the hours of 10am and 6pm and are to be suspended during the Games.

The suspension is for eight consecutive Sundays commenced on 22 July and runs until 9 September 2012. This is a temporary measure and applies to England and Wales. No Sunday trading restrictions apply in Scotland.

For more details about Olympic events visit the London 2012 website.

Internet links: Acas article Acas quick tips www.london2012.com

Fuel duty

The government has announced that the 3.02 pence per litre (ppl) fuel duty increase that was due to take effect on 1 August 2012 will be deferred to 1 January 2013.

‘In the Autumn Statement 2011 it was announced that the 3.02ppl fuel duty increase that was due to take effect on 1 January 2012 would be deferred to 1 August 2012, and the inflation increase that was originally planned for 1 August 2012 would be cancelled.’

The effect will be to maintain the duty liability on all fuels at current levels until 1 January 2013.

Internet link: HMRC fuel duty

HMRC announce new taskforces

HMRC expect the new taskforces they have launched to recover over £30m from tax dodgers.

The latest round of taskforces to be announced will target traders who do not pay the right amount of tax in:

  • Scottish pubs and nightclubs
  • hair and beauty businesses in Northern Ireland
  • the motor trade in South Wales, South West, Yorkshire, Nottinghamshire and the North East
  • restaurants in South Wales and South West.

The taskforces are specialist teams that undertake intensive bursts of activity in specific high risk trade sectors and locations in the UK. The teams will visit traders to examine their records and carry out other investigations.

The Exchequer Secretary to the Treasury, David Gauke, said:

‘At a time when we are trying to rebalance the public finances and most hard-working people are making a contribution by paying the right tax, it is just not fair that a small minority try to dodge their responsibilities.’

‘These new taskforces are funded by the Government’s investment in HMRC of over £900m to crack down on avoidance and evasion. Their dedicated teams are on track to collect more than £50m from tax avoiders and evaders through the taskforces launched last year and expect to collect £30m in unpaid taxes through those launched today.’

 

Internet link: Press release

Newsletter – June 2012

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