Archive for the 'Tax and Financial News' Category

Problems With HMRC Basic PAYE Tools

Published on May 22, 2013 in Employee/Employer Issues. 0 Comments Tags: Basic PAYE tools, BPT, error message, HMRC, problems, Real time information, registry key, revenue and customs, RTI, submission, wages software.

THE FREE SOFTWARE provided to small businesses by HM Revenue & Customs is failing to file real-time PAYE submissions.

The Basic PAYE Tools (BPT) software package is available to employers with nine or fewer employees, and is designed to work out tax and national insurance contributions for each payroll cycle, and report it to the taxman in real time.

However, a software issue has seen an error message appear when employers attempt to make PAYE submissions, while taxpayers calling the RTI helpline were met with a recorded message acknowledging the fault and assuring them the issue was being investigated.

An element of Windows, known as a registry key, has been removed in a Windows update. The key is needed to enable full functionality of the software. Without its presence, the software is unable to successfully submit the information.

HMRC has published guidance advising users that although information about restoring the key is available from various sources online, HMRC itself cannot provide instruction on how to, as it is unsure why the key was removed.

The taxman will, however, release a software update at the end of May negating the need for the key. In the meantime, taxpayers are advised to continue running the payroll system as normal and submit the information once the update has been installed.

A spokesman for HMRC said: “The roll out of RTI is progressing well. Since 6 April over one million PAYE schemes have successfully started to report PAYE in real time. This includes over 140,000 BPT users successfully submitting returns.

This article has been provided by Ashley Barrowclough, Partner at Balance Accountants.

Disclosure Agreements With Isle Of Man, Jersey And Guernsey

Published on May 16, 2013 in Food for Thought and Tax Planning. 0 Comments Tags: 2016, 6 April 2013, disclosure agreements, Guernsey, Isle of Man, Jersey, september.

These new agreements involve a planned automatic exchange of information from 2015 on all accounts held in these offshore areas. So for any UK residents with savings accounts in these offshore areas, be aware that HMRC will know all about them from 2015.The new arrangements include a disclosure facility to allow UK resident investors with accounts to come forward and settle their past UK tax affairs before information on their accounts is automatically shared between the governments. Similar arrangements are expected to be announced for Luxembourg.

The disclosure facility operates from 6 April 2013 until September 2016. It will not be open to individuals already under investigation but will cover liabilities dating back to April 1999 at the earliest.

These types of arrangements are proving a real money spinner for HMRC. They were originally expected to bring in over £5billion over the next six years but they have upped that to £9billion based on what they have collected so far!

This article was compiled by Ashley Barrowclough, Partner at Balance Accountants.

National Minimum Wage to Rise from October 2013

Published on May 14, 2013 in Employee/Employer Issues. 0 Comments Tags: 2013, minimum wage, october, £6.31.

The Government has announced that the main rate of the National Minimum Wage (NMW) will rise by 12p to £6.31 an hour from 1 October 2013.

Announcing the change, the Business Secretary Vince Cable also revealed that the hourly rate for those aged 18 – 20 will increase from £4.98 to £5.03, while the rate for 16 and 17 year-olds will go up by 4p to £3.72 an hour.

The Government accepted the recommendations put forward by the Low Pay Commission (LPC), although it rejected the LPC’s proposal to freeze the minimum rate for apprentices.

Instead, Mr Cable announced that the apprentice rate, which applies to apprentices under 19, or those 19 and over in the first year of their apprenticeship, will rise from £2.65 to £2.68.

The decision has provoked a mixed response, with some business leaders describing the move as ‘illogical’ and ‘unwelcome’.

Mike Cherry, national policy chairman of the Federation of Small Businesses, said: ‘The increase in the national minimum wage is unwelcome in today’s economic climate. We understand the Government must strike a balance between boosting consumer spending and economic growth, however they must ensure the UK’s small businesses stay competitive at a time when the economy remains fragile.

‘There will be businesses that operate on thin margins, who will struggle with any increase to the minimum wage.’

His thoughts were echoed by Dr Adam Marshall from the British Chambers of Commerce (BCC), who warned that the scale of the increase would add significantly to the cost pressures on businesses.

Yet the TUC said it would have liked to have seen the Government do more to help those on lower incomes.

‘Boosting the incomes of the low-paid goes straight into the economy and wage-led growth must be part of the recovery, so we would have liked to have seen minimum wage rates go up further today, even if the Government has rightly rejected calls for a freeze,’ commented TUC general secretary Frances O’Grady.

This article was compiled by Ashley Barrowclough, Partner at Balance Accountants.

Penalties increasing for late filing of 2012 tax returns.

Published on May 1, 2013 in Paying Tax and Straight from the Boss. 0 Comments Tags: 2012, from 1 May, from May 1, HMRC, late filing penalties, self-assessment, tax return.

Individual taxpayers who are yet to submit their 2011/12 self-assessment tax return are reminded that they will be hit by increasing penalties from next month.

The online deadline for filing self-assessment returns for the 2011/12 tax year was 31 January. Individuals that missed this deadline will have already received an initial £100 late-filing penalty.

From 1 May, there will be an additional daily £10 penalty for each day the online return is late, up to a maximum of 90 days.

For paper returns, which were due by the 31 October deadline, daily penalties began on 1 February.

Further penalties of at least £300 – or five per cent of the tax due, whichever is the greater – will then be issued for returns that are six and 12 months late.

So if you have still to file your 2011/12 self assessment tax return then you need to take action as quickly as possible because in this instance time definitely means money!!!!!!

This article was compiled by Ashley Barrowclough, Partner at Balance Accountants.

P11Ds (Benefits-in-Kind) – an outline

Published on April 26, 2013 in Employee/Employer Issues. 0 Comments Tags: beneficial loans, benefit in kind, cash equivalent, company car, deadline, director, employee, living accommodation, mileage, p11d.

The P11D season is upon us once again…

The P11D is a statutory form required by HMRC from UK based employers detailing the cash equivalents of benefits and expenses that they have provided during the tax year to their directors, and employees earning more than £8,500 per year (including benefits).

Cash equivalent means the cash value an employee will pay tax on according to the type of benefit they have been provided by their employer.

The basic cash equivalent formula is: –

Cost to the Employer of providing the benefit (inc VAT)
Less
Amount made good by the employee (Out of their net pay)
Equals
the Cash Equivalent

However there are some very complicated rules to calculate the cash equivalents for certain benefits such as company cars, beneficial loans, provision of living accommodation etc.

Here are some examples of what should be included on your P11D:

- All expenses reimbursed to you by the company for business expenses incurred for you personally, whether or not you physically withdraw the cash or not.

- All business expenses the company meets on your behalf. Common examples of the company paying for genuine business expenses for you personally would be entertaining, subsistence, etc.

- All personal expenses the company meets on your behalf

- Company car benefits must also go on your P11D, and these will attract a tax and Class1NIC liability. It is often better to keep your own car personally and charge the company mileage instead.

It is possible to apply for a P11D dispensation whereby you agree to adhere to certain rules, and, if accepted by HMRC, this precludes the need to do P11D’s from the date the dispensation is agreed. This is obviously a great time saver, and means that HMRC are made aware of the types of expenses you have in your business, and that these are for business only.

P11Ds (for the year to 5 April 2013) need to be completed and submitted to HMRC by 6 July 2013. Any Class 1A NICs due as a result of P11D benefits must be paid by 19 July (22 July if paid electronically). By this date the employer must also provide current employees with details of the information contained on the P11D.

This article was compiled by Karen Ashton, Client Manager at Balance Accountants.

Annual Investment Allowances rise…. temporarily

Published on April 5, 2013 in Capital Allowances. 0 Comments Tags: 1 January 2013, AIA, Annual Investment Allowance. allowances, capital allowances, £100000, £25000.

In the Autumn statement, the Chancellor announced a tenfold increase in the amount of Annual Investment Allowance (AIA) available. The AIA gives full tax relief for expenditure on integral features and plant and machinery as it is incurred. It is not available on cars.

This will be the third change in the rate of this allowance in less than twelve months. Up to 31 March 2012 (for corporates) and 5 April 2012 (for other taxpayers) the allowance stood at £100,000. Since then, and until 31 December 2012, the allowance is £25,000.

For expenditure incurred on or after 1 January 2013 the maximum annual AIA becomes £250,000. This is for a two year period and so the annual AIA will reduce to £25,000 for expenditure incurred after 1 January 2015.

Where a business has an accounting period that straddles the date of change the allowances have to be apportioned on a time basis. The calculations are complex depending on the accounting year end and the date of the spend, with specific difficulties if the accounting period covers spending prior to the rate reduced in April 2012.

Please contact us before capital expenditure is incurred for your business in a current accounting period, so that we can help you to maximise the AIA available, you could potentially save £000’s of tax.

This article was compiled by Karen Ashton, Client Manager at Balance Accountants.