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May 2010 - E-NEWS
Please browse through this month’s articles using the links below and contact us if any issues or questions arise.
- Online submission of employers forms
- National minimum wage rates
- Supporting business start-ups and small & medium size businesses
- P11D deadline looming
- Penalty guidance on late payment of PAYE
- Tax deductible clothing
Online submission of employers forms
The employer’s annual returns P35 and P14 (P60) are due for submission to HMRC by 19 May 2010. Broadly all employers must submit their forms online this year. Previously those employers with less than 50 employees could file paper forms.
The final date for payment of PAYE, National Insurance Contributions, Construction Industry Scheme deductions and Student Loan deductions was 19 April 2010 (22 April 2010 for cleared receipt of electronic payments into HMRC’s bank account).
The deadline for providing employees with their forms P60 is 31 May 2010 (Bank Holiday Monday). Employees must be provided with a paper form P60 this year. HMRC have confirmed that for 2010/11 electronic forms will be acceptable.
Internet links: HMRC employer guidance and IPP press release
For more information contact Alan Rolfe on 023 8046 1200.
From October 2010, National Minimum Wage rates will increase from
- £5.80 to £5.93 an hour for workers aged 21 and over
- £4.83 to £4.92 an hour for workers aged 18 to 20
- £3.57 to £3.64 an hour for workers aged 16 to 17.
The government has extended the adult minimum wage rate to 21 (previously 22) year-olds from October 2010 and, for the first time, an apprentice minimum wage rate has been set at £2.50 an hour.
The Low Pay Commission Chairman David Norgrove said:
"We are pleased that the government has again accepted the Commission’s recommendations. The introduction of an apprentice rate marks an important extension to minimum wage protection across the UK."
For more information contact Alan Rolfe on 023 8046 1200.
Supporting business start-ups and small & medium size businesses
To help businesses in their earliest days, HMRC will further reduce the burdens in starting a business and personalise the online support it provides.
They aim to do the following, starting this year and in 2011:
- personalise www.businesslink.gov.uk for those starting up in business and enhance online services for all SMEs, providing better access to relevant tax guidance and flexible tax payment plans to help businesses manage their cash flow
- help start-ups and new employers by introducing a single interactive form to authorise tax agents and register for multiple taxes online
- provide an online facility that reduces the need for businesses, or their agents, to provide the same information to HMRC multiple times and allows them a single online view of current tax liabilities or repayments due.
For more information contact Alan Rolfe on 023 8046 1200.
The forms P11D, and where appropriate P9D, which report employees and directors benefits and expenses for the year ended 5 April 2010, are due for submission to HMRC by 6 July 2010. The process of gathering the necessary information can take some time, so it is important that this process is not left to the last minute.
Employees pay tax on benefits provided as shown on the P11D, either via a PAYE coding notice adjustment or through the self assessment system. In addition, the employer has to pay Class 1A National Insurance Contributions at 12.8% on the provision of most benefits. The calculation of this liability is detailed on the P11D(b) form.
If you would like any help with the completion of forms P11D or the calculation of the Class 1A liability please get in touch.
Internet link: HMRC P11D guidance
For more information contact Alan Rolfe on 023 8046 1200.
Penalty guidance on late payment of PAYE
HMRC have been warning employers for some time that they may have to pay a penalty if they do not pay their PAYE deductions on time. They have now issued more detailed guidance on the way in which the penalties will work. The penalties will apply to PAYE deductions due for a period starting on or after 6 April 2010 include PAYE, Student Loan deductions, Construction Industry Scheme payments, Class 1 NICs, annual payments of employers' Class 1A NICs and annual PAYE Settlement Agreements payments.
Deductions of PAYE, NICs, Student Loan deductions and Construction Industry Scheme payments are generally due by 19 of each month (or 22 if paid by electronic means and cleared into HMRC’s bank account). Small employers are able to pay quarterly.
HMRC are advising employers to let HMRC know if they are likely to have difficulty making a payment on time, so that arrangements can be made and penalties can be avoided. Their guidance states that where employers enter into ‘time to pay’ arrangements, before the liability becomes due, no penalty will be charged.
Penalties for late payment start at 1% increasing to 4% depending on the number of late payments in the year. Extra penalties will be added where liabilities are outstanding for a further six and then 12 months.
Internet link: HMRC guidance on late payment
For more information contact Alan Rolfe on 023 8046 1200.
It has long been recognised that an employee stands little chance in obtaining tax relief on the cost of business clothing unless it is special clothing which fulfils the role of protection. The technical reason for not being able to obtain tax relief is that there is a dual purpose in spending the money – personal as well as business – and furthermore the clothing is suitable to be worn outside of the working environment even though the employee may not wish to do so.
The latest employee to make a claim and lose it at the Tax Tribunal stage is Sian Williams of BBC Breakfast fame. A novel argument made on her behalf was that the clothing expenditure was necessarily incurred for her work because whilst she was prepared to present the programme without wearing any clothes, the BBC would not accept that.
HWB
Chartered Accountants, Highland House, Mayflower Close, Chandlers Ford, Eastleigh,
Hampshire, SO53 4AR.
