Archive for May, 2013

P11D Deadline 6 July 2013

The forms P11D, and where appropriate P9D, which report employees and directors benefits and expenses for the year ended 5 April 2013, are due for submission to HMRC by 6 July 2013.

It can take some time to gather the necessary information, so it is important that this process is started well before the deadline.

Employees pay tax on benefits-in-kind as shown on the P11D, either through Self-Assessment or via a PAYE coding notice adjustment. In addition, the employer has to pay Class 1A National Insurance Contributions at 13.8% on the provision of most benefits.

HMRC have issued some guidance as to common errors on the forms in the latest Employer Bulletin (see link below).

Correct P11D completion is complex. If you would like any help with the forms P11D or the calculation of the associated Class 1A National Insurance liability please get in touch.

Links:

HMRC:                          http://www.hmrc.gov.uk/paye/exb/index.htm

Employer Bulletin:       http://www.hmrc.gov.uk/payerti/forms-updates/employer-bulletin/bulletin44.pdf

Employers – The new Pension Auto-Enrolment Scheme

Under the new pension auto-enrolment scheme, all employers will have to automatically enrol eligible jobholders into a qualifying pension scheme. This could, for example, be an existing pension scheme (if it meets, or can be changed to meet, the necessary automatic enrolment criteria), or the new National Employment Savings Trust (NEST).

Workers for whom automatic enrolment will be required are those who are:

  • Aged between 22 years and the State Pension Age (SPA)
  • Earning over the minimum qualifying earnings threshold (£9,440 in 2013-14)
  • Working or ordinarily working in the UK
  • Not already a member of a qualifying pension scheme.

All businesses will need to contribute at least 3% of the qualifying pensionable earnings for eligible jobholders. However, to help employers to adjust, compulsory contributions will be phased in, starting at 1% before eventually rising to 3%.

It is a 6 year process, with different ‘staging dates’ for each employer, depending on the number of employees. You can check your own staging date via the sites below. They also give guidance on setting up the schemes etc.

Whatever your staging date, it is essential for employers to plan for the changes in good time. Consider the following action points:

  • Nominate a point of contact
  • Know your staging date and develop a plan
  • Assess your workforce
  • Review your pension arrangements
  • Communicate the changes to all workers
  • Automatically enrol eligible jobholders into a pension scheme
  • Register with the Pensions Regulator and keep records
  • Contribute to your workers’ pensions

Links: to the government advice site, the pensions regulator site and the HMRC site.

https://www.gov.uk/workplace-pensions-employers

http://www.thepensionsregulator.gov.uk/employers.aspx

http://www.hmrc.gov.uk/pensionschemes/employer.htm

Increase in National Minimum Wage Rates

The Government has announced increases in the NMW rates which will come into effect on 1 October 2013:

  • the adult rate will increase by 12p to £6.31 an hour
  • the rate for 18-20 year olds will increase by 5p to £5.03 an hour
  • the rate for 16-17 year olds will increase by 4p to £3.72 an hour
  • low pay commission for apprentices will increase by 3p to £2.68 an hour  
  • the accommodation offset increases from the current £4.82 to £4.91.

Loans from a Company to Shareholders

Legislation has been published which confirms an announcement made in Budget 2013 and which comes into force from 20 March 2013.

A close company (which generally includes an owner managed company) may be charged to tax in certain circumstances where it has made a loan or advance to individuals who have an interest or shares in the company (known as participators). Loans and advances are also caught where they are made to an associate of the individual such as a family member.

The corporation tax charge is 25% where the loan is outstanding nine months after the end of the accounting period.

The new law will prevent the practise of avoiding the payment of the tax charge by repaying the loan before the tax is due (nine months after the end of the accounting period) and then effectively withdrawing the same money shortly after. This change may also prevent refunds of the 25% tax already paid where loans are redrawn shortly after.

This change may affect a number of owner-managed companies. We are happy to discuss this with you if this issue affects you.

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