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When will my business Stage for Auto Enrolment?
Your staging date is the date the new duties come into force for your business. It’s the date from when automatic enrolment activities must become ‘business as usual’, just like real-time PAYE.
You can find out your staging date using the Pension Regulators Calculator or this link provides a quick summary by number of employees.
Auto Enrolment isn’t easy, there is a lot to do before you Stage, here is a checklist (Pension Regulator) of activities you should do 6 months before Staging
Modified staging dates for some small employers
- You can change your staging date to a later date if you:
- had fewer than 50 staff on 1 April 2012, and
- had, or were part of, a PAYE scheme that has more than 50 people in it.
Bringing your staging date forward
All employers are able to bring their staging date forward. You may choose to do this to align it with other business practices, like the start of your financial year.
Or you might have several employers in a corporate group and want to align the smaller employers’ staging dates with the largest. If you plan to do this, you must notify The Pensions Regulator, which you can do online.
You can postpone assessing your workforce for up to 3 months, but this does not change your staging date and staff can choose to opt in during the postponement period.
A survey by AutoenrolSME found that 6 out 10 businesses can’t cope with the preparation for Auto Enrolment and hired additional staff to manage the process!
A Poll in April 2014 of 200 businesses with 62 to 249 employees found:
63% of the employers didn’t know when their staging date was!
Employment Allowance
Up to 1.25 million businesses and charities will benefit from it – and around 450,000 will not have to pay any Class 1 NICs at all in 2014-15.
On 6 March, HMRC sent employers an email, headed ‘Get up to £2K off your NICs bill’, highlighting the introduction of the Employment Allowance (up to £2,000 available for the tax year 2014-15 onwards) with a link to the guidance. Almost every employer who is a business or charity (including a Community Amateur Sports Club) paying employer Class 1 NICs on their employees’ or directors’ earnings will be eligible.
Employers need to claim the Employment Allowance using their 2014-15 payroll software, or HMRC’s Basic PAYE Tools.
Ruth Bulteel HMRC
HMRC are going to let you tell them your tax code…
It’s true, from April 2014, you can tell HMRC what you think your code should be by explaining why you think its wrong, here is a link to the HMRC structured E Mail
This form can only be used for queries relating to your PAYE Coding Notice. Any other queries will not be answered.
HMRC aim to respond within 15 days of receiving your E Mail.
Checking your tax code
You’ll find your tax code on:
- your pay slip
- your PAYE Coding Notice – you usually get this a couple of months before the start of the tax year and you may also get one if something has changed but not everyone needs to get one
- form P60 – you get this at the end of each tax year
- form P45 – you get this when you leave a job
Your tax code can be wrong for lots of reasons so being able to sent a structured E Mail to HMRC should help to get things corrected faster.
steve@bicknells.net
Do you think National Insurance should be merged with Income Tax? it could happen soon
The Tax Payer’s Alliance have been campaigning and it looks like the Chancellor, George Osborne, has agreed that the first step is to re-name National Insurance as “Earnings Tax”. The change is to be proposed in legislation this week.
This story was reported in the Telegraph on 23rd February. There is also an interesting article on Tax Research UK (Richard Murphy).
You pay National Insurance contributions to build up your entitlement to certain state benefits, including the State Pension.
You pay National Insurance if you’re:
- 16 or over
- an employee earning above £149 a week
- self employed and making a profit over £7,755 a year (Class 4) plus £2.70 per week Class 2 NI (you may not have to pay any Class 2 NI if your profits are below £5,725)
If you’re employed, you stop paying Class 1 National Insurance when you reach the State Pension age.
If you’re self-employed you stop paying:
- Class 2 National Insurance when you reach State Pension age (or up to 4 months after this to pay off any contributions you owe)
- Class 4 National Insurance from the start of the tax year after the one in which you reach State Pension age
Income Tax is whole different ball game. Whilst I can see its simpler to have one tax the changes that would be required to achieve it would be huge!
Is it worthwhile?
steve@bicknells.net
RTI Payroll Year End
Thanks to http://www.freedigitalphotos.net
RTI Payroll Year End
Payroll year end under RTI should now be a much more straightforward affair than in pre-RTI times. Our suggested procedure is as follows.
1. Last FPS submission will be the last payment date (not necessarily payroll date) on or before 05-Apr-14: for monthly paid this will normally be payroll for the month of Mar-14, but for weekly paid it may be less clear.
If for example your pay week ends on a Friday and is paid Wednesday the following week then week ending Friday 28-Mar-14 will be paid Wednesday 02-Apr-14, and this will be your last payroll for 2013-14 tax year; the week ending Friday 04-Apr-14 will be paid on Wednesday 09-Apr-14 which is in 2014-15 tax year (CAERP: users should check the Company Settings ‘Tax & Payroll details’ tab).
2. Make sure you ‘tick the box’ (CAERP: “This is the final FPS submission of the tax year.“) to indicate that this is your last FPS submission for the tax year, and answer the additional questions.
3. If you have made no employee payments and do not therefore need to make a FPS submission then you will need to make an EPS submission as soon as possible after 05-Apr-14 (CAERP: users will find this at the bottom of the P32 report), and tick both the “No payments were made” box and the “This is the final EPS or FPS submission of the tax year.”
HMRC provide further guidance at http://www.hmrc.gov.uk/payerti/end-of-year/tasks.htm
4. Run your P60 reports and forward to all the individuals who have been employed in the 2013-14 tax year.
5. Update the tax codes for those individuals where notices for 2014-15 have been received from HMRC.
6. Update ‘L’ tax codes by adding 56 so that for example ‘944L’ becomes ‘1000L’.
7. Remove any ‘Week 1’ or ‘Month 1’ indicators (CAERP: untick ‘Wk 1 Mth 1 Basis ‘ in employee records).
HMRC provide further guidance at http://www.hmrc.gov.uk/payerti/payroll/year-start.htm
New for tax year 2014-15
8. From 06-Apr14 you will no longer be able to recover a proportion of SSP paid to employees and the NIC holiday arrangements will come to an end.
9. There is however a new employer’s national insurance ‘Employment Allowance’ whereby eligible employers can reduce their Employer Class 1 NICs bill by up to £2,000 per year. Employers who qualify should submit an EPS as soon as possible after 05-May-14 and tick the ‘Employment Allowance Indicator’ box.
HMRC provide further guidance at http://www.hmrc.gov.uk/news/nic-emp-allowance.htm
10. Perhaps the biggest change for the new tax year is that HMRC will be taking a much harder line on late submission of FPS/ EPS returns with automatic penalties, so please be sure that you make a submission at least monthly, even if only a ‘nil’ EPS return.
Paul Driscoll is a Chartered Management Accountant, a director of Central Accounting Limited, Cura Business Consulting Limited, Hudman Limited, and AJ Tensile Fabrications Limited, and is a board level adviser to a variety of other businesses.
Do you use Interns? watch out for NMW
At the end of last year there was a clamp down on the Fashion Industry, the main target was companies that advertise for unpaid trainees (interns). Its likely this will lead to an even bigger campaign in 2014.
Current minimum wages rates are
21 Plus £6.31
18 to 20 £5.03
Under 18 £3.72
Apprentice £2.68
If you take on unpaid trainees without a contract you could be at risk of a £5,000 fine. The penalty can also apply if you are paying below the minimum wage.
If you find that you are paying below NMW you need to correct the rate of pay now and back date it to avoid the risk of a penalty.
steve@bicknells.net
Are your workers ‘Fit for Work’? or would use of a tax free fitness option help?
Now Christmas is over and we may have eaten more than we should, many of us will be thinking of getting back into shape.
Did you know the NHS daily recommendation for steps per day is 10,000 steps and a recent article in Workplace Savings and Benefits pointed out that according to an American study:
- Secretaries take 4,300 steps per day
- Lawyers take 5,000 steps per day
- Construction and Factory 9,000 steps per day
Sickness absence in the UK costs £17bn per year.
You could reduce sickness by promoting an active lifestyle and it could be tax efficient too!
HMRC allow tax free treatment provided sporting or recreational facilities (or vouchers that are exchangeable for their use) that meet all of the following conditions:
- The facilities are available for use by all of your employees.
- The facilities aren’t available to the general public.
- The facilities are used mainly by employees or former employees or members of employees’ families and households. (The facilities don’t have to be used mainly by your employees – this condition also covers use of the facilities by employees of other employers if you’ve grouped together with them to provide the facilities.
The tax and NICs exemption doesn’t apply if you provide any of the following:
- facilities based at premises used wholly or mainly as a private dwelling
- holiday or other overnight accommodation (including any associated sporting facilities)
- use of a mechanically propelled vehicle (including road vehicles, boats and aircraft)
So that seems to rule out most Gyms, so what can you do?
Personal Trainers could be your ‘sports facility’ provided they are made available to all employees as part of a benefits package
Join a club run by other employers, many large businesses have their own sports and social club perhaps your company could use their facilities
Get together with other employers and hire a local Gym or Health Club at specific times for example set evenings and exclude members of the public on those evenings
If these options don’t work for you, you could still get your employer to pay for Gym Membership as part of your package, the benefit in kind tax will be less than if you pay direct out of net pay.
steve@bicknells.net
Business Accountant 