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What a difference a day makes

How about three extra days?

HMRC has relaxed the rules on “Real Time Information” for payroll reporting.  UK employers are required to send electronic reports to HMRC with each payment of wages to employees.  HMRC are now saying that you can submit your RTI report up to three days after the payment date without incurring a penalty.

Any employer who has received an in-year late filing penalty for the period 6 October 2014 to 5 January 2015 and filed within three days, should appeal online by completing the “Other” box and add “Return filed within 3 days”.

Outsource your payroll

Despite the relaxation provided by three extra days, the burden on employers is only likely to increase over the coming months.  Auto enrolment is being rolled out to all UK employers over the next couple of years.  With the new payroll year about to start on 6th April, now is a good time to consider using a payroll bureau – or at least checking that your current systems will deal effectively with auto enrolment pensions.  For more information please and see how Alterledger can help please click here.

Pension annual allowance

Carrying forward unused pension annual allowance

Money that you pay into a UK registered pension scheme or qualifying pension scheme receives tax relief.  Personal pension contributions are paid from your earnings after tax and the pension provider reclaims the 20% tax suffered.  All employers will soon be required to offer pension schemes to employees, so now is a good time to think about what you can contribute to your pension scheme.

Anyone can make (gross) contributions each year of £3,600, but above this threshold the maximum you can put into the fund is 100% of Net Relevant Earnings (NRE).  Tax relief on contributions is only available up to the Annual Allowance (including any Annual Allowance carried forward).

Tax Year 2011/12
£
2012/13
£
2013/14
£
2014/15
£
Annual Allowance 50,000 50,000 50,000 40,000

Carry-forward relief

Any unused annual allowance can be carried forward provided you were a member of a registered pension scheme, or qualifying overseas pension scheme during the year.  The carry-forward relief can be used for any unused allowance from the previous 3 tax years.  Assuming you were a member of  a pension scheme, but didn’t have any contributions (personal or employer’s) in the tax years from 2011-12 up to 2013-/14, it would be possible to have total contributions of £190,000 in 2014/15.

 Net Relevant Earnings

  • Earnings from employment
  • Benefits in kind
  • Self-employed profits as a sole trader
  • Share of profits from a partnership
  • Any profit from furnished holidaylettings
    • Less allowable business expenses

Alterledger can help

Alterledger can explain the tax implication of pension contributions for employers and individuals.  Contact Alterledger or visit the website alterledger.com for more information.
 

Employers and their staging date

Staging Date

A process started in 2012 which means eventually, all UK employers will be obliged to enrol all their eligible employees into a contributory pension scheme, known as Auto Enrolment.  This obligation is already being phased in, starting with the biggest employers.  The commencement date for an employer’s obligation to provide a contributory pension scheme is known as the staging date.

The government has said that no small employers (those with fewer than 50 employees) will be affected before the end of the current Parliament.  The general election will be on 7th May so we are nearly there.  Employers will be able to meet this obligation in any way they choose, but one way will be through a government-sponsored National Employment Savings Trust ( NEST ), a simple, low-cost scheme with very limited fund choice, and initial restrictions on transfers and contribution levels.  NESTs will be operated by the NEST Corporation, a not-for-profit trustee body, and will be regulated by the Pensions Regulator.

Alterledger can help

Alterledger can help you prepare for your staging and manage your auto enrolment process along with your payroll once everything is up and running.  Contact Alterledger or visit the website alterledger.com for more information.
 

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