CHANGES TO THE AMOUNT OF OVERDUE TAX HMRC CAN COLLECT BY ALTERING TAX CODES

The HMRC can currently collect debts up to £3000 by adjusting tax codes this scheme is known as ’Coding Out’.

However due to changes in the law the amount of debts the HMRC can collect using this method has increased. This can apply to you if you have a debt with HMRC and are an employee paying tax through PAYE or receive a taxable UK based private pension.

These changes will only apply to underpaid self-assessment and class 2 national insurance debts as well as tax credit overpayments. Changes will become effective in your 2015-16 tax code and you will receive a letter before any debts are collected in this way.

The Sliding income scale is as follows:

If you don’t want the debts to be included in your tax code then you will need to pay the full amount you owe or discuss with HMRC a more suitable payment arrangement.

In their most recent quarterly bulletin the Pension Regulator revealed that they have issued the first fixed penalty notices. A fixed penalty notice under section 40 of the pensions act 2008 of £400 for failure to comply with an unpaid contributions notice or compliance note.

According to their research and analysis employers are failing to comply with their auto enrolment duties because of a lack of information in the following areas:

Self-Employment

Auto Enrolment duties can apply to self-employed people with a contract and are those who are not undertaking the work as part of their own business. Fixed term or non-permanent workers should be assessed under the same criteria as other workers.

Postponement

Whether an employer postpones or not, their staging date remains the same. This means that they still have duties from their staging date. These include: issuing worker communications, postponement notices, and facilitating opt-in requests.

Opting In or Out

All eligible job holders must be Auto enrolled before they can chose to opt out. Employers must take immediate action to establish the workers enrolment date upon receipt of a valid opt-in notice.

Reassessing Eligibility

Employers must assess workers who may have previously been ineligible at each pay reference period to see if eligibility criteria have been triggered. They must also undertake further ongoing assessments in respect of workers ages, new starters, and the end of postponement or transitional periods.

The pension regulators research suggests that some small and micro employers don’t know when they need to comply with Auto Enrolment. In addition many queries revealed that some employers were unaware that the law applied to them.

1^st of October 2014 saw the National Minimum Wage increase

• The adult rate increased by 3% from £6.31 to £6.50
• The 18-20 year olds rate increased by 2% from £5.03 to £5.13
• The 16-17 year olds rate increased by 2% from £3.72 to £3.79
• The apprentice minimum wage increased by 2% from £2.68 to £2.73.

It is the low pay commissions target to ensure that the minimum wage keeps pace with inflation. This helps to reduce the negativities in the labour market such as in work poverty when those on low pay cannot afford inflated prices.

The changes will mean that more than a million people are set to see their pay rise by as much as £355 a year. The Business Secretary Vince Cable stated that “The National Minimum Wage provides a vital safety net for the lowest paid, ensuring they get a fair wage whilst not costing jobs. This year’s rise will mean that they will enjoy the biggest cash increase in their take home pay since the banking crisis.”

It is illegal to pay any less than minimum wage. Those who employers who fail to pay this rate will face tough action from the government including steep financial penalties and publicly naming flouters. If you are concerned that minimum wages are not being met you can call the free and confidential pay and work rights helpline on 0800 9172368.

Research by the Pensions regulator shows that micro employers are unprepared for auto enrolment with as many as 20% of them unaware of their staging date.

When asked if each size of business understood all five key features of the reforms, the results showed that the smaller the business the smaller the percentage of understanding. Businesses with between 50 and 60 workers displayed 85% of understanding, whilst only 49% of micro employers understood these five key features of Auto Enrolment.

The research into the attitudes to the changes in the pension scheme revealed varying opinions. On a positive note at least 74% of all businesses who will be involved in the changes to pensions state that they will be able to deal with the admin demands and view the changes as a good idea in principle. However 49% of micro employers believe that it will be financially difficult to make contributions to the scheme.

If you are unaware of your businesses staging date for auto enrolment call us now on 0113 2864486 with your PAYE reference and we will find out for you.

Currently the place of taxation is determined by the location of the supplier. From the 1^st of January 2015 the place of taxation will change to where the EU consumer lives.

An estimated 34,000 Digital Services businesses are eligible in the UK for VAT Mini One Stop Shop (MOSS). This will allow businesses to register online for VAT services meaning that they do not have to register VAT separately in each country where they do business. Between 27,000 and 42,000 UK businesses are expected to register for the VAT MOSS service and can begin registering on the 20^th of October.

Digital Service businesses include: broadcasting, telecommunications, e-service supplies, telephone services, music suppliers, films and games suppliers and apps services.

If you supply consumers through an online store or gateway it is their responsibility to declare and pay any VAT due. In this instance the rule changes do not directly affect you.

If you are an EU business you may register and use the union VAT MOSS online service in the member state of your business establishment. You will then be able to submit a single calendar quarterly VAT MOSS return and payment covering EU digital service supplies.

To find out more about changes to VAT follow the link: http://www.hmrc.gov.uk/posmoss/

If you would like advice about your VAT scheme or would like us to submit your VAT return on your behalf please contact us.

Thousands of people will receive a second tax statement from HM Revenue and Customs after the first estimate was miscalculated.

The HMRC states that errors had emerged in the process due to receiving incomplete information from employers.

“The majority of the errors have happened because an employer failed to make a final payment statement for the 2013-14 tax year meaning our records were incomplete despite reminders that these submissions had to be made,” a spokesman for HMRC said.

They have issued an apology and have stated that they will ‘push the boat out’ to help those who had already received a rebate and spent it.

HMRC and employers now use a Real Time Information system that is supposed to ensure accurate PAYE information is sent regularly rather than just at the end of the tax year.

The Institute of Financial Studies (IFS) have announced that September is an important month for the Automatic Enrolment pension scheme. Those businesses with 61 employees begin their auto enrolment duties. There is only 12 months until employers of less than 30 workers will have a duty to stage auto enrolment.

Businesses that his their staging date 5 months ago must complete their ‘Automatic Declaration of Compliance’ with The Pensions Regulator.

It is important to consider payroll and Auto Enrolment assessment software as they hold the information required to run automatic enrolment and can improve the process and communications involved in a successful scheme.

You must also have a qualifying workplace pension scheme which will need to be registered with the Pensions Regulator and checked to ensure that it meets the new Auto Enrolment standards.

Opt out rates by workers are a lot lower than we had expected at just 8.5%. Fortunately the majority of employees are aware that they should be saving for their retirement and value the pension set up for them by their employer.

To reduce the complications of the scheme you are advised to begin planning earlier and involve your staff in the decisions that matter to them.

There is a growing need for smaller employers to obtain information, help and guidance from external sources because they might not be large enough to employ someone in house to deal with their new duties.

If you require any assistance in setting up Auto Enrolment and would like to find out more contact us.

Studies suggest that millions of people of working age in the UK are living without any private or company pension. This could lead to individuals facing years of financial hardship during their retirement.

With this ageing population it is vital that you consider the options for your retirement whilst there is still time to plan ahead.

Auto Enrolment is a new law that means that every employer must automatically enrol workers into a workplace pension if they work in the UK, earn more than £10,000 per year and are aged between 22 and the state pension age. This scheme will be introduced gradually over six years.

Firms with less than 50 workers will not start enrolling their staff until June 2015 at the earliest but even the smallest employers will eventually be obliged by law to enrol their staff.

Part time workers who earn less than £10,000 a year can ask to take part. If they earn above £5564 their employer will also be obliged to contribute.

Employees are able to opt out of this scheme if they fill in a form within a month of the scheme beginning in their workplace.

To find out more about Auto Enrolment and how Business Works can help you with your business pension scheme please attend one of our seminars.

Exceptions to the entitlement of statutory sick pay include:

• They have received the maximum amount of SSP which is 28 weeks.
• They are already receiving Statutory Maternity Pay as different regulations apply.
• They have already taken 3 year or more ‘linked’ periods of sickness.
• If employees were in custody or on strike on the first day of sickness as different rules apply.
• If employees work outside the EU and are not liable for National Insurance Contributions.
• If they have received employment support allowance within 12 weeks of starting or returning to work for you.

You cannot reclaim statutory sick pay after the 5^th of April.

If you require any assistance regarding statutory sick pay please see the HMRC website.  https://www.gov.uk/employers-sick-pay/overview

As technology becomes a necessity in the modern world it is even more important to protect your personal data whilst online.

Companies House advise that they would never request personal information or payment details via email. If you doubt the authenticity of an email from Companies House avoid opening any attachments, following any links, disclosing any personal information or responding to the email.

You are advised to send the original suspicious email to phishing@companieshouse.gov.uk then delete it.

To find out more about phishing follow this link:  http://www.companieshouse.gov.uk/phishingAdvice/index.shtml

Protect Your Personal data

• Keep your login details secure do not write them down or tell them to anyone. Passwords ought to be obscure you are advised to use a combination of word and numbers which cannot be easily guessed. Avoid using common phrases, names or your date of birth.
• Use and update antivirus software on a regular basis to protect your online details and files from viruses and software.
• Keep updating your web browser and operating systems by installing updates as soon as they are available.
• Be careful whilst social networking by never including personal information.
• Never include sensitive information in emails such as account information, passwords and PIN numbers.