rti and paye update 2014
DESCRIPTION
These slides compliment the live webinar presented by Nigel Gorski. Covering Real Time Information RTI – what went well and what has gone wrong Penalties and the ‘on or before rule’ Low Paid Employees reminder and exemptions Company Car Planning Other PAYE issues Back to the Future Introduction to Auto Enrolment If you would like to view the recording then please join our LinkedIn Webinar Network at http://linkd.in/1acZPdh About Nigel:TRANSCRIPT
Complimentary Webinar Slides:
RTI & PAYE Update
25th March 2014
Nigel Gorski
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Nigel is a fully qualified chartered accountant with considerable people management and training experience. He has not only worked in industry and for one of the ‘big 4’ accountancy firms but now runs his own accountancy practice. Nigel has considerable business mentoring experience and delivers the following modules for The Business Springboard:
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These materials are designed solely for the use of participants on our courses. These materials shall not be copied or reproduced in any format whatsoever without the prior consent of The Business Springboard Limited.
The content of these materials does not constitute advice tailored to any participant’s specific needs and to the maximum extent permitted by applicable law, The Business Springboard or any of its employees or associates shall not be held liable for any direct, indirect or consequential loss or damage arising as a result of use of these materials.
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Welcome
RTI – what went well and what has gone wrong
Penalties and the ‘on or before rule’
Low Paid Employees reminder and exemptions
Company Car Planning
Other PAYE issues
Back to the Future
Introduction to Auto Enrolment - if we have time!
Questions & Answers
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Introduction to RTI
RTI is the new online filing process for payroll
It was driven by the need to reduce tax credit fraud
A ‘soft landing’ was given with regard to penalties
It commenced 6 April 2013 and requires a different
approach from employers
The good news is most people adopted it and it
‘seemed’ to settle down quite quickly
Some problems have arisen and care needs to be
taken with some payroll software now that the full
process is fully understood
Problems include mismatched liabilities, duplicate
liabilities, matching CIS to PAYE liabilities
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The On or Before Rule
A payroll needs to be run on or before the time of
payment
Think of the practicality of this – e.g. pubs and farms
This additional work has proven significant
Get out of jail card for payrolls with 9 or fewer
employees for 2 further years
The micro business exemption does not apply to ‘new
payrolls’
Penalties will run from 2014/15 and will be set at £100
to £400 per month depending on payroll size – this is
for filing after payment made – ‘the on or before rule’
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Low Paid Employees
In the old days where employees earned less than £109 per
week they are currently not required to be on the payroll
These employees must have been added to the payroll from
6 April 2013
The only exception to this is where the employer doesn’t
have any other employees who are required to be on the
payroll or there is no active payroll
This has caused problems – e.g. hospitality and agriculture
There is a new exemption for payments made to employees
for work done on the day of payment where it is impractical
to run RTI and the amount is unknown in advance
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PAYE: Company Car Planning BIK rates for the next 3 years are known
In recent years companies have been incentivised to buy cars with less than 110 g/km emissions
Significant rises are planned for the lower end of the emissions scale – some are eye watering!
A car with 109 g/km emissions costing £20,000 would have a BIK of 14% - £2,600 in 2013/14 – this will rise to £3,600 in 2016/17 – 38%
Oddly the increases are not as significant at the high performance end – e.g. a 220g/km car only goes up from 35% to 37%!
Now is the time to start planning benefits packages and budgeting the additional Class 1A NI as a company car may be less attractive – not to mention tougher new capital allowance rules
Vans are excluded
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Other PAYE Issues for Employers
The £2,000 NI exemption kicks in from 6 April Working from home deduction continues at £4 per week –
HMRC are checking this area as it can only be claimed in weeks WORKED
Reminder about childcare – for higher rate taxpayer joiners after 6 April 2011 and the restriction to the £55 per week tax free amount
Remember that childcare is based on PREDICTED earnings excluding performance related bonuses. For example a sales agent on £18,000 received £30,000 in commission. Using the P60 would give the WRONG answer!
Employers ‘paying student loans’ as an incentive is a recent issue HMRC have picked up on
Employment status and the ESI indicator – my annual reminder
Pensions limit gets reduced to £40k
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Back to the Future
RTI was the first in a series of changes
HMRC will be using digital services in the next 3 years
This means employers (and employees) will be able to transact more online than before
New passwords and Ids
Ability to amend tax codes
Unclear how much scope employers will have versus agents / accountants
The first phase is already in test
Starting late 2014 with company cars
This is much bigger than RTI!
Watch this space for more…..
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Introduction to Auto Enrolment
The new legislation came in in July 2012
The requirement is to automatically enrol certain
workers into a pension scheme
Pension schemes can range from an existing scheme
to the Government backed NEST scheme
This is an employer duty
Careful planning is required
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When You Need to Act
Migrating to a scheme is called ‘staging’
It’s based on the size of your largest PAYE scheme at
1 April 2012
Employers are being written to but you can check your
own staging date
Larger employers are already ‘being staged’ by
February 2014
Medium sized employers with 50 to 249 persons in
their larges PAYE scheme will be ‘staged between 1
April 2014 and 1 April 2015 – these employers need to
start acting
Small employers will commence 1 June 2015
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Questions & Answers
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