Posts in Category: HMRC

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

Charities to Benefit from Payroll Giving Changes 

Charities will be able to access Payroll Giving donations in half the time it currently takes, under government proposals aimed at encouraging greater use of the scheme.

The recommendations put forward by HMRC include cutting the time taken to process donations from 60 to 35 days and provision of a government-affiliated website where employees can check if their employer is signed up.

Cabinet Office minister, Nick Hurd, described the proposals as "useful steps" and part of a broader strategy to make it easier and more compelling to give.

The economic secretary to the Treasury, Sajid Javid, said: "Payroll Giving provides a unique way for employers to encourage and champion donations, and the government is committed to increasing the amounts raised through Payroll Giving."

The proposals came off the back of a consultation conducted by the Revenue earlier this year, which received 113 responses.

One of the respondents to the proposals was Payroll Giving in Action and director, Jeremy Colwill, said he "overall was delighted" with the government's recommendations.

"I love the fact that they're going to tell employers about Payroll Giving. The more people that know about it, the more people will give to charity.

"It is good that they're reducing the time taken to transfer money to the agencies and this could go further but it is a step in the right direction."

Posted by Gary Wilson Wednesday, September 18, 2013 1:08:00 PM Categories: Charities HMRC News
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