Delayed RTI fines

by Simon 24. March 2014 19:52
HMRC have announced that it is delaying the introduction of automated RTI penalties that were due to commence from April 2014. The announcement follows calls last week from ICAEW and CIPP, professional bodies representing accountants and payroll agents, to postpone their introduction made both publicly and in response to HMRC’s consultation on draft penalty legislation. These and other bodies voiced their concern that RTI was not yet providing a reliable enough service to support the automation of penalties for unpaid PAYE and NICs.
 
In a statement on the GOV.UK site, HMRC unveiled the new timetable for RTI penalties:

from April 2014, interest will be payable on in-year payments of PAYE and NICs not made by the due date;
in October 2014, in-year automated penalties for the failure to file RTI reports on time will come into force;
in April 2015, in-year automated penalties for late payment of PAYE and NICs due will be introduced.

HMRC say that the change to the penalty timetable for RTI has been made in order to “give employers more time to adapt to reporting in real time”, and that “HMRC is continuing to improve its systems and guidance.”  HMRC’s statement emphasises the need for more time to allow employers to adapt to RTI reporting before penalties are introduced as the key reason for this delay, but does not directly address the concerns raised by the professional bodies and other concerned stakeholders about underlying issues with RTI systems. For more information please contact Qtac on 01179353500 
 
 
 
 
 
 
 
 
 
 
 
 

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Auto Enrolment Training

by Simon 24. March 2014 19:31

New pensions legislation will mean that every employer in the UK will be required to help more of their workers save for retirement, this is known as Automatic Enrolment. As a business there will be many changes to make and processes to put in place. Here you can find training dates to help you with the main steps you'll need to take.

Webinar - 24th March 3pm - Auto Enrolment and The Payroll Department - FREE

Webinar - 4th April 11am - Functionality of Qtac with Auto Enrolment - FREE

Seminar - Bristol Hilton Aztec West 24th April 10am - Midday - Auto Enrolment - FREE

Seminar - Bristol Hilton Aztec West 24th April 2pm - 4pm - Auto Enrolment for Accountants - FREE

Seminar - London Date & Venue TBC - Auto Enrolment - FREE

Seminar - London Date & Venue TBC - Auto Enrolment for Accountants - FREE

Any questions you have please feel free to contact Qtac Sales on 01179353500

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Tax Code Increases

by Simon 24. March 2014 17:59

Automatic Tax code increases for 2014-15

HMRC have announced a general 'uplift' of all tax codes with an 'L' suffix by 56. This means for example that an employee with tax code 944L in 2013-14 will have their tax code uplifted by 56 from 6 April 2014 to 1000L. Qtac applies this uplift automatically when you migrate your data to the 2014-15 software. If you receive separate notifications from HMRC to change an employees tax code then you should action these accordingly.

The new 'emergency' tax code for 2014-15 is 1000L. The HMRC helpsheet www.hmrc.gov.uk/helpsheets/p9x.pdf gives further details.

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Employment Allowance Basics

by Simon 21. March 2014 01:50

£2,000 NI cut for small businesses

The Government has released new guidance in advance of the new ‘Employment Allowance’ launch in April, which will reduce the amount of Employers’ National Insurance Contributions payable by small firms by up to £2,000.

From 6th April, following the introduction of the new tax incentive, the Government has stated that 1.25m businesses will pay less employers’ NICs, and an estimated 450,000 will may no NICs whatsoever.

According to research carried out by the Federation of Small Businesses, 29% of business owners plan to use the savings to boost staff wages, 28% plan to hire additional staff, and just under a quarter will invest more money in resources.

Employment Allowance – the basics

The scheme starts on 6th April 2014.

Eligible businesses can claim a discount of up to £2,000 from their employers’ NI liabilities each tax year.

The Allowance can only be claimed against a single PAYE scheme (some businesses operate multiple payroll schemes).

You can move your claim to another PAYE scheme, but not during the current tax year. You need to stop claiming for one scheme before the end of the current tax year, and nominate an alternative scheme before the new tax year begins.

Qtac Payroll Software will if selected deduct a cumulative amount of up to £2,000 from your monthly Employers’ NIC bill. For example, if your firm’s total Employers’ NI bill is £500 each month, you will not pay any NICs for four months in a row, by which time the total £2,000 has been used up.

Some types of employer cannot claim the Allowance, such as suppliers of personal, household and domestic workers, public authorities, and companies who carry out work which is mainly of a ‘public’ nature (where 50% of their work or more is in or for the public sector).

The self-employed can use the scheme if they have an NIC liability on earnings (i.e. sole traders and partnerships).

Service companies can only claim the allowance if they pay salaries, and have an NIC liability on these earnings.

You cannot claim the Allowance if your limited company is caught by IR35, and makes a deemed payment.

For Further Information don't hesitate to contact the QTAC support team on 01179474747

 

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New RTI penalty consultation launched by HMRC

by Simon 14. January 2014 20:37

 

HMRC has launched a further two month consultation on proposed changes to PAYE legislation concerning the RTI penalty regime. This final consultation on penalties comes 4 months before the penalty regime for RTI comes into force from April 2014.

The penalty regime for RTI will impose different levels of penalties depending on the size of the employer’s PAYE scheme.  For late filing of RTI returns, the penalty system will use the following size bands:

  • a scheme with 1 to 9 employees will face a penalty of £100;
  • £200 penalty for schemes of 10 – 49 employees;
  • £300 for 50 – 249 employees and
  • £400 for the biggest schemes with 250 or more employees.

Employers will be allowed one un-penalised default each tax year, unless they operate an annual PAYE scheme, in which case the late filing penalty will apply even if it is the first default.

A new employer will be allowed a thirty day ‘initial period’ in which to make their first RTI submission after paying their employees for the first time under regulation 67K.  Provided the employer files their RTI reports within the thirty day period, they will not receive a late filing penalty.

The document also sets out some changes to the late payment penalty regime which will apply from April 2014.  HMRC has the power to set a ‘payment tolerance’, a value within which a late payment default will not be generated.  This allows for instances where rounding of values in payroll generation or other minor adjustments mean that the amount HMRC is expecting from reporting does not exactly tally with what the employer pays.  Regulation 67L of the proposed changes will set this tolerance at £100, so payments which differ from expected amounts by less than £100 will not generate a late payment default or a penalty.

Some of the changes outlined in the document are designed to make sure that the penalty guidance applies both to PAYE and National Insurance contributions.  The draft also makes provision for those few employers who are not required to file RTI returns online, but who use paper forms, to report quarterly to HMRC.

The changes described in the consultation document also provide for instances where it is impractical for an employer to operate PAYE, and HMRC makes arrangements for a ‘Direct Collection’ procedure whereby PAYE and NICs are taken directly from the employee.  This may arise where the employer is based overseas and no special arrangements have been made to otherwise gather taxes due.  Under a Direct Collection procedure the employee must electronically file report RTI information to HMRC, and can be liable for penalties should they fail to do so. 

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The seven steps to enrolment

by Simon 2. January 2014 21:04

 

1.     Know your staging date - when you Act

The date that the new law applies to your company is known as your staging date. This date is determined by the size of your largest PAYE scheme as at 1st April 2012. Companies that have PAYE schemes that are shared by multiple employers will have the same staging date in most cases. For multiple companies within one organisation, it is the largest employer that will dictate the staging date and this date will apply to all companies of that PAYE scheme.

For more information about staging dates, please visit http://www. thepensionsregulator.gov. uk/employers/staging-date-timeline.aspx

 

2.     Access your workforce

Workers who will need to be automatically enrolled in a pension scheme are called ‘eligible jobholders’. An eligible jobholder is:

       Aged between 22 and state pension age

       Working or ordinarily working in the UK

      Earning above £9,440

 

3.     Review your pension arrangements

Review your existing pension scheme: If you have an existing pension scheme for your workers, you may wish to consider enrolling all eligible jobholders into this scheme. To do this, your existing scheme will need to qualify as an automatic enrolment scheme - see information on qualifying schemes below.

To be a qualifying scheme, minimum contributions must be made or it must provide a minimum rate at which benefits will build up. A scheme suitable for automatic enrolment must also not:

       Impose barriers to joining the scheme, such as probationary periods or age limits for members

       Require staff to make an active choice to join or take other action prior to joining

       Require the provision of extra information in order to stay in the scheme

 

4.     Communicate the changes to all your workers

You must inform all your workers in writing about the changes detailing how they are affected by the changes. This communication must be provided in writing (which can include being sent by email) and must be specific to the individual.

The duty is on the employer to provide the right information to the right individual, at the right time.

 

5.     Automatically enrol your eligible job holders

There is a process that you will need to follow in order to make an eligible jobholder a member of an automatic enrolment pension scheme. Certain information about your eligible jobholders will also need to be supplied to pension scheme managers for example at specific points in the process.

 

6.     Register with The Pensions Regulator and Keep records

You are required to inform The Pension Regulator how you have fulfilled your new automatic enrolment duties by registering this information online shortly after your staging date. You will also need to maintain specified records about enrolled workers, their status within the scheme, the payment of contributions and the qualifying scheme itself.

 

7.     Contribute to your workers’ pensions

Starting on your staging date, you must contribute to your chosen pension scheme on behalf of your workers. The minimum contribution rates that an employer must pay into their workers’ pension scheme will be introduced gradually over a 6 year period (from 2012 to 2018). This is known as ‘phasing’. The minimum overall contribution will be 2% rising to 8%. Where your employee doesn’t contribute towards the pension, the employer will be expected to contribute the full minimum amount.

Phasing will apply to most, though not all, types of pension scheme (your scheme provider will be able to tell you if phasing applies to you).

For a free Guide to Auto Enrolment please click here for QTACs An Introduction to Auto Enrolment - Workplace Pensions.

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Have you considered your Nanny's retirement?

by Simon 8. November 2013 01:57

In 2012 the UK government introduced the Pensions Act which requires all employers to provide a workplace pension. While auto-enrolment will affect the country’s biggest employers first, it will soon roll out to include everyone who hires staff in the UK, including those who might not consider themselves employers, but take on domestic help such as a nanny.

The news is likely to come as a shock to many working class couples, already struggling with the costs of childcare and running a household and who never dreamt that they would be making provisions for their nannies retirement.

If the nanny was employed for only 6 hours per day, Monday to Friday, and paid the minimum wage of £6.31 per hour they would fall within the scope of the new law, as their earnings exceed the threshold of £9,440 a year (this is the 2013-14 limit).

The new regulations are being introduced over a period of 6 years starting from 2012 for the largest companies, then with those employing less than 50 employees starting in August 2015. The amount put into the employee’s pension pot will be a combination of the employee’s contribution, the employer’s contribution and tax allowance from the government. The percentages will be gradually increased until October 2018 as follows:

 

Dates

Joining pension scheme up to

Employer (%)

Employee (%)

Total (%)

30th Sept 2017

1

1

2

1st Oct 2017 – 30 Sept 2018

2

3

5

1st Oct 2018 onwards

3

5

8

*These are the minimum levels of contribution.

Therefore based on a gross salary of £20,000 the minimum cost to the employer for the pension provision will be £143 per annum until 1 October 2017 when it will rise to £286 per annum and finally from 1st October 2018 by £429.

It is clearly going to be a burden for all smaller employers. Some mothers have attacked the new pension scheme, with one mum on www.mumsnet.co.uk writing: “It will tip me over the edge and put one nanny out of work. People will put their nanny on the books for some £500 per month, call her an au pair and then pay the rest in cash. Proper on-the-books nannies will become a privilege of the rich. Treating parents like a profitable business is outrageous.”

 

There will be an extra administration for employers such as; Employees have to be monitored and notified when they have to be enrolled into a scheme which can be on a monthly or a weekly basis. All Workers have the right to opt out of a workplace scheme, but even then the employer will have to keep paperwork.

 

Please note if a net salary is agreed with the employee then the employer would result in having to pay both the employee’s pension contribution and the employer’s contribution. 

QTAC Payroll can play a vital part in handling Auto Enrolment, helping to make Auto-Enrolment compliance easier for the employer by providing some key features like:

Assess your workforce

Manage pension schemes, data and payments

Produce communication/letters to employees

Manage joiners and those opting out

Provide communication with Pension Providers 

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The ongoing impact of Workplace Pensions on Payroll processes

by Alex 4. November 2013 21:47

 

The introduction of Auto-Enrolment will have an on-going impact on payroll processing every month after an employer has gone through the initial pain of setting up a Workplace Pension scheme, often referred to as an Automatic Enrolment Pension Scheme, assessing their workforce and communicating to their employees their eligibility to be a member of that pension scheme.

 

Once eligible employees have been auto-enrolled, and any employees opting out of the pension scheme have been refunded any deductions made there is an on-going requirement to assess employees that have not become members of the pension scheme due to earnings levels or age.

 

Over and above that requirement there is the need to inform the pension provider of the pension deductions made from each employee that is a member of the scheme, and the employer contributions made into that employee’s pension pot, as well as paying the contributions to the pension provider.

 

The model that the majority of pension providers have provided to achieve the receipt of the contributions information assumes the employer will provide that information, and most providers have a method of uploading contribution files to their website, or receiving a spread sheet of the contribution details.  This is fine if the employer is going to do this, but if you, as an agent, are considering providing an Auto-Enrolment Pension service, then the amount of time this extra process will take needs to be considered.

 

Given that logging into a pension providers website and uploading a contributions file may take, at best, a couple of minutes, this will add 40 minutes to your payroll processing time if you run 20 payrolls in a day.

 

Scaling this up to many hundreds of payrolls makes the increased burden on payroll agents a serious concern.

 

Note also that each of your clients may well choose different Pension Providers, and that this on-going file upload process may be very different depending on the Pension Provider, and any increased charging for an Auto-enrolment service would need to take these differences into account.

 

This could allow you to influence your clients’ decision on which Pension Provider to choose.

 

Three-day HMRC online shutdown coming up

by Simon 4. October 2013 19:19

HMRC online services will be unavailable for three days from Friday 11 October.

The down time is planned and is to enable maintenance and service upgrades at the Revenue.

It will mean many of HMRC’s services usually available online will be unavilable during the period – although PAYE services will be unaffected.

Services will be down from 6am on Friday 11 October 2013 and open for use by 6am on Monday 14 October 2013.

HMRC has provided information on the availability of specific services here although these are subject to change and it is advised that the page is checked regularly. 

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10 steps to successful auto-enrolment

by Simon 24. September 2013 19:22

1.     Employers should identify the date when they must start auto-enrolment (known as the "staging date"). The largest employers will start from 1 October 2012, with smaller employers and new businesses phased in over the next six years. The Department for Work and Pensions has published a timeline showing when auto enrolment will apply to employers of different sizes.

2.     Employers should check in advance whether their existing pension scheme meets the minimum requirements for auto-enrolment. These include minimum contribution levels (for defined contribution schemes) or benefit levels (for defined benefit schemes). Jobholders must be auto-enrolled without first being asked to provide any information or to express a choice (for example, about the investment of contributions).

3.     Employers should identify their jobholders and establish which of them are not already enrolled in a compliant scheme. Jobholders include employees, temporary workers, directors employed under a service contract and agency workers (who are considered to be employed by whoever is responsible for paying them). Only jobholders aged between 22 and state pension age who earns enough to pay income tax will need to be automatically enrolled in a compliant scheme if they are not already a member of one.

4.     If any jobholders are not already enrolled in a compliant scheme, employers should consider which scheme they should use to meet the auto-enrolment requirements.

5.     Employers using a defined contribution scheme will need to check that they are satisfying the requirements for minimum contribution levels. For auto-enrolment purposes, contributions are based on a definition of earnings which includes salary, wages, commission, bonuses and overtime. Contributions to an existing scheme may be based on a different definition of earnings, so company payroll systems and pension schemes may need to be updated. Employers who use a defined benefit scheme will need to check that the scheme meets minimum requirements.

6.     Employers can put in place a waiting period of up to three months before a jobholder needs to be automatically enrolled into a workplace pension. Jobholders can, however, opt in during the waiting period.

7.     Employers should also put processes in place to identify auto-enrolment triggers for existing employees and new joiners (eg when they turn 22 or reach the minimum level of earnings). Individuals can opt out of scheme membership. Someone who has opted out can apply to re-enrol, but only once in a 12-month period. Automatic re-enrolment will apply every three years, although employers will have some flexibility about when re-enrolment should take place.

8.     Employers will need to communicate with staff about auto-enrolment and explain that they have the right to opt out if they wish. Employers must also report to the Pensions Regulator to confirm that they have complied with their auto-enrolment obligations.

9.     Employers cannot encourage jobholders to opt out of auto-enrolment nor can they encourage job applicants to do so during the recruitment process – penalties will apply. Employers should bear this in mind when communicating with their workforce about the new requirements.

10.                       Employers should consider how these new requirements fit in with their future HR strategy and remuneration policy. Administration and payroll processes will also need to be adapted. It may be sensible to put together a team responsible for implementing the auto-enrolment requirements within the company. Employers who choose a third party to take care of the processes involved in auto-enrolment will need to have robust contractual terms in place.

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