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New national living wage rates from 1 April 

The national living wage (NLW) and the national minimum wage (NMW) rates will increase on 1 April 2017.

Eligible workers over the age of 25 will have to be paid the new NLW rate of £7.50 while the NMW rate for those aged 21-24 increases by 10p to £7.05 an hour.

Age

From 1 April 2017

Current rates

25 and over

£7.50

£7.20

21 to 24

£7.05

£6.95

18 to 20

£5.60

£5.55

16 to 17

£4.05

£4.00

Apprentices*

£3.50

£3.40

*Apprentices rate for those aged 16-18 and 19 or over in their first year.

A government poll of more than 1,400 workers earning less than £15,000 highlighted a lack of awareness of their rights.

Findings:

  • 69% were unaware about payment for travel time between appointments
  • 57% didn’t know that having money deducted from their wages to cover uniform costs is unlawful
  • 48% were unaware that tips can’t be used to top up pay to the legal minimum.

Margot James, business minister, said:

“We are determined to make sure everybody in work receives a fair wage and while most employers get it right, there are still a small number who fail to play by the rules.”

Jennie Granger, director general for customer compliance at HMRC, said:

“Paying the NMW is the law – it’s not a choice. Employers must pay their workers what they’re entitled to and follow the rules.”

Contact us to discuss paying the NMW and NLW.

 

Posted by ANDREW AINSWORTH Tuesday, February 28, 2017 10:11:00 AM Categories: News

National living wage slowing pay growth 

The costs to employers of the national living wage (NLW) are expected to lead to a growth in average salaries of 1.7% in 2016, according to the Chartered Institute of Personnel and Development (CIPD).

A third of businesses surveyed estimated the NLW to raise average salaries by 2%, while 21% said it would lead in weaker pay awards.

Pay expectations are higher among smaller businesses in comparison to larger businesses and private sector organisations which average at 1%. 

21% of employers have cited the NLW as a reason for weaker pay growth; while 16% say that national insurance contributions are weighing down wages.

11% say that auto-enrolment will have a negative impact on basic pay.

Mark Beatson, chief economist at the CIPD, said: 

“Employers have to manage the consequences of government-imposed increases to the cost of employing people. 

“The national living wage and auto-enrolment were introduced to improve the living standards of low-paid employees, but this can only happen without significant job losses if the productivity of low-paid employees also increases.”

Talk to us today to discuss the NLW.

Posted by ANDREW AINSWORTH Saturday, November 26, 2016 8:52:00 AM Categories: News

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

The National Living Wage and the National Minimum Wage will increase from April 2017 

The National Living Wage for those aged 25 and over will increase from £7.20 per hour to £7.50 per hour. That means over £1,400 a year more for a full-time worker previously on the National Minimum Wage.

The National Minimum Wage will also increase:

  • for 21 to 24 year olds – from £6.95 per hour to £7.05
  • for 18 to 20 year olds – from £5.55 per hour to £5.60
  • for 16 to 17 year olds – from £4.00 per hour to £4.05
  • for apprentices – from £3.40 per hour to £3.50
Posted by ANDREW AINSWORTH Saturday, November 26, 2016 8:42:00 AM

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

RTI 'Needless' Say SMEs 

Many small businesses are yet to see any benefit from Real Time Information (RTI), with a third deeming it "needless", a survey has found.

The poll of 2,000 small and medium enterprises (SMEs) by HW Fisher reveals that six months of getting to grips with RTI has left a significant number with negative experiences.

The accounting firm found that a quarter (23%) of respondents described RTI as "frustrating", while 31% thought the reforms were "needless" and almost half (46%) had enountered problems or were still trying to address those issues. 

While nearly a third (31%) of the SMEs said their view of RTI was positive, 39% of those polled admitted it had increased costs for their business with the majority (61%) seeing a rise of up to 5%.

Toby Ryland, a partner at HW Fisher & Company, said: "It's clear from our research that the move to RTI has caused many small businesses difficulties, during a time when they would have preferred to have been fully focused on the very rough trading environment faced by most firms."

 

Posted by Gary Wilson Wednesday, September 18, 2013 12:53:00 PM Categories: News RTI

Childcare Voucher Consultation Launched 

Payroll managers are being given the opportunity to shape government plans to reform the childcare vouchers scheme.

Chancellor George Osborne announced in this year's Budget plans for the new parental support scheme which would provide childcare costs for working families, of up to £1,200 per child.

A consultation has been launched, which has cross-governmental support - with HMRC and the Department for Work and Pensions (DWP) both involved - and includes a short, online survey.

Responses to the survey will influence the final design of the tax-free childcare vouchers.

The survey can be found here.

Posted by Gary Wilson Wednesday, September 18, 2013 12:46:00 PM Categories: News Tax

HMRC Finally Addresses RTI Misbalanced Submissions 

A RTI problem solving team has been set up by HMRC to investigate why in some cases there is a dispute over the amount of PAYE owed between payroll managers and the Revenue.

HMRC is currently unable to explain why the figure it expects from some companies differ from what the payroll departments think is owed - and the new Revenue team has been given the specific role of identifying the cause of the discrepancies.

In August, Simon Parson, head of compliance at Ceridian, said: "Having personally checked four separate HMRC Debt Management and Banking division claimed misbalanced PAYE scheme submissions from April through to June, it's clear to me that not all is well with RTI."

An HMRC spokesman explained that the Revenue is working with a number of schemes to understand the problems.

"This will enable us to understand the issue in greater depth, and take the steps necessary to prevent them arising in the first place. Each time we identify a root cause, we will update our guidance, where appropriate, as soon as possible," he said.

Posted by Gary Wilson Wednesday, August 28, 2013 9:17:00 AM Categories: News RTI

Working Families to Benefit from £1,200 Childcare Vouchers 

Tax-free childcare vouchers worth up to £1,200 are to be made available for familes by 2015, under plans proposed by the government.

The scheme will cover 20% of childcare costs up to £6,000 per year, per child, for any family with parents who earn less than £150,000 each.

Under the measures drawn up by the Treasury only parents of children born on or after September 2010 will be able to receive the vouchers, although Chancellor George Osborne explained that stay-at-home mohters would be excluded from the scheme because they had made a "lifestyle choice".

He said: "We want to make the new scheme work in the way that is best for parents, so today we are asking for their views, and I'd like as many parents as possible to tell us what they think."

Paul Bartlett, from the Childcare Voucher Providers Association, said: "The role of the employer in the current childcare voucher scheme has been a fundamental reason for its success. Ensuring there is a link between the new scheme and employers will help build on this success, and guarantee employers can still play an important role in helping their staff with their childcare costs."

HMRC and the Treasury have begun a 12-week consultation on the childcare vouchers scheme that will close on 14 October. Parents and other affected parties are invited to send their views on the measures to tax-free.childcare@hmrc.gsi.gov.uk  

Posted by Gary Wilson Wednesday, August 14, 2013 9:52:00 AM Categories: News

CIOT Calls for Payslip Lessons in School 

Schools should teach children about tax so they are able to read their payslips better as adults, according to experts.

The Chartered Institute of Taxation (CIOT) is calling on the government to include basic tax education in the national curriculum, stating that an understanding of financial matters should be a prerequisite for all British citizens.

CIOT president, Stephen Coleclough, said: "Most schoolchildren will one day become employees when they will need to understand a PAYE coding notice or payslip and to be able to identify when it is wrong. Many will go into business where tax is a key cost and administrative burden that cannot be ignored."

The tax group is calling on the Department for Education (DfE) to introduce lessons in schools on why tax is levied, its connection to UK politics, and understanding how to calculate it.

In response, a DfE spokesman, said: "The new national curriculum will make financial literacy complusory for the first time, as part of citizenship for 11 to 16 year olds. Pupils will be taught the importance of budgeting, of sound management of money, credit and debt, as well as understanding of different financial services and products.

"The new mathematics curriculum will also ensure that all young people leave school with an understanding of the maths needed for personal finance."

Posted by Gary Wilson Wednesday, August 14, 2013 9:43:00 AM Categories: News
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