Posts in Category: Business Tax

NIC and income tax alignment could affect 40% of workers  

Two fifths of the working people would see their tax liability change under proposals to bring national insurance contributions (NICs) and income tax into closer alignment, according to the Office of Tax Simplification (OTS). 

The proposed changes would see employees taxed in the same way for both national insurance and income tax on the same earnings, while employers would pay a payroll based charge.

According to the report:

·         40% of the working population would be affected by the change

·         part-time employees, women and those under 35 would benefit

·         those earning more than £20,000 income would be worst off from the changes, particularly those with multiple jobs, higher incomes or in industries with bonuses.

Key proposals include:

·         moving employees NICs to an annual, cumulative and aggregated (ACA) system on employment income

·         charging employers NICs as a levy on total payroll costs

·         a more transparent NICs system

·         aligning IT legislation for IT and NICs so that charges are the same

·         bring taxable benefits in kind into class 1 NICs and abolish class 1A NICs.

Colin Ben-Nathan, chairman of employment taxes sub-committee at CIOT, said:

“Changing to an ACA system for employee NIC will produce losers as well as winners and so careful thought will need to be given to the transition, particularly to the effect on the lower paid.  

“One approach may be for the government to raise the primary threshold for employee NIC closer to the level of the income tax personal allowance so that the lower paid are properly protected.”

Contact us today to discuss how these changes may affect your business.

Posted by ANDREW AINSWORTH Saturday, November 26, 2016 8:50:00 AM Categories: Business Tax HMRC

Relaxation of RTI reporting arrangements for small businesses 

Small employers who pay staff on a daily or weekly basis are to be given more time to report employee earnings via the new Real Time Information (RTI) system, HMRC has announced.

The relaxation of reporting arrangements comes just weeks before RTI is due to be officially rolled out.

RTI is designed to modernise the way PAYE payments are recorded and calculated and will require almost all employers to report their employee payments on or before each pay day, as opposed to at the end of each tax year.

Read the full report

Posted by Gary Wilson Friday, March 22, 2013 1:35:00 PM Categories: Business Tax
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