What’s new next tax year? - Equiniti Payroll€¦ · the tax system From April 2015, a spouse or...
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What’s new next tax year? Important information for the end of the 2013-14 tax year and notification of changes for 2014-15 for Equiniti ICS clients.
Transcript of What’s new next tax year? - Equiniti Payroll€¦ · the tax system From April 2015, a spouse or...
What’s new next tax year?
Important information for the end of the 2013-14 tax year and notification of changes for 2014-15 for Equiniti ICS clients.
Due to the introduction of reporting in real time during 2013-14, all of the information required by HMRC is contained in the Full Payment Submission (FPS) and Employer Payment Summary (EPS) files, therefore submission of forms P35 and P14 is no longer required.
� Generally this means that the final FPS or EPS for the year should indicate that it is the ‘Final submission for the tax year’. Please note that if your PAYE scheme covers multiple payrolls e.g. weekly and monthly, this indicator is only set against the last file to be submitted for the year.
� Once set, this indicator will prompt the completion of the end of year questions and declaration.
� You will receive a communication detailing the end of year questions week ending 7th March. If EICS submit files on your behalf please complete the questionnaire and return to your contact
by 17th March or before your final pay day of the year, if earlier.
� If you know that you will be making any additional pay runs e.g. a bonus payment to be paid on or before 5th April please inform your contact in advance of completion of your final scheduled pay run. The final submission indicator, completion of end of year questions and declaration will then be included on the RTI files produced from the supplementary run.
� If you need to correct any of the information on your final submission a revised FPS should be sent as soon as possible but before 20th April.
� Any errors discovered in your final FPS on or after 20th April 2014 must be corrected on an Earlier Year Update (EYU) file.
What’s different for the end of the 2013-14 tax year?
� If submitted an EYU should only report the differences to the amounts already reported for the tax year.
� To avoid a late-filing penalty for 2013-14 your final FPS for the year must be submitted by 19th April 2014, or an EYU must be sent by 19th May 2014. EYU files may be sent after this date but run the risk of incurring a penalty unless the file is sent to amend previously submitted final FPS figures.
� The latest date to give a P60 End of Year Certificate to employees employed at 5th April is 31st May 2014.
� The deadline for submitting returns of expenses and benefits – forms P11D, P9D and P11D (b) remains 6th July.
Real Time Reporting
There are a number of changes to RTI reporting for the 2014-15 tax year.
� Employers running payrolls in advance of paydays in the new tax year - where a payroll is run ahead of a payment to be made on or after 6th April, the FPS file can be submitted to HMRC from 6th March.
� Late reporting reason – a new field will report on the FPS to show why a payment is reported after the payment date. The reason will be selected from a list as shown below:
A – Notional payment: Payment to Expat by third party or overseas employerB – Notional Payment: Employment related securityC – Notional payment: OtherD – Payment subject to Class 1 NICs but P11D/P9D for taxE – No requirement to maintain a Deductions Working SheetF – Impractical to report work done on the dayG – Reasonable excuseH – Correction to earlier submission
� Reporting of number of hours normally worked by employees – there will be an increase to the number of bandings from 4 to 5. The revised bandings are:
A) up to 15.99 hoursB) 16 to 23.99 hoursC) 24 to 29.99 hoursD) 30 hours or moreE) Other
� Where we hold contracted hours in payroll any change in banding will be made automatically by EICS.
� If we do not hold employees’ contracted hours we will automatically default
normal hours worked to E) Other. To avoid future queries from HMRC and the Department of Works and Pensions (DWP), it is essential that you provide your controller with the details of any employee who will move between the new bands.
� Scheme Contracted Out Number (SCON) – The reporting of SCONs is mandatory from April because contracting-out arrangements end in April 2016. HMRC will close all open periods of contracting-out on each individual’s National Insurance record in 2016. Therefore if you operate a Contracted-out pension scheme HMRC needs to know which employee belongs to which contracted-out scheme.
� Each employer has one ECON number
but may have several SCONs. You can find your SCONs on your Employers Contracting out certificate. Alternatively you can contact your pension provider for this information. It is important to obtain and use the correct SCON. Please send a notification of SCONs and the scheme to which they are attached to your contact before 17th March. More information on what is required will be contained in the end of year questions communication that you will receive by 7th March.
� If you do not have a contracted-out scheme this field will be left blank.
� Employer bank details will now report on EPS files. The file will include Name of account holder, Account number, Branch Sort Code and Building Society Reference if applicable. We will request this information, if not already held, in the communication that you will receive by 7th March.
� Employment Allowance indicator added to EPS - this is a new allowance that may be claimed from 6th April 2014.
Changes for the 2014-15 tax yearThe Employment Allowance will give eligible employers a reduction of up to £2000 on their Class 1 National Insurance liability each year, where they have employees or directors, who earn enough to give rise to employer Class 1 NICs on their earnings. Please note that if you have multiple PAYE schemes to cover different areas of your business only one allowance can be claimed. You can find more information on the allowance and how to check if your business is eligible here.
� From 6th April 2014, employers will no longer be able to claim the Percentage Threshold Scheme (PTS) reimbursement for Statutory Sick Pay (SSP). Employers will have until the end of the 2015-16 year to recover SSP paid before the end of the 2013-14 year.
� SSP year to date values will no longer report on FPS files and the value of SSP recovered will no longer report on EPS. There may be circumstances such as late notification of sickness or sick payments made in arrears where a payment for dates prior to 5th April 2014 will be made after this date. HMRC will provide more information in April on how this is to be reported.
� Starter check lists to replace P46 forms from April 2014. There is no obligation to use the checklist but this is a useful way to gather the information needed for new starts to be reported on the FPS.
Income Tax Rates and Taxable Bands
The Personal Allowance for people born after 5th April 1948 increases from £9,400 to £10,000 from April. The emergency tax code will be 1000L. The income limit for Personal Allowance remains at £100,000.
Rate 2014-15 BandBasic Rate: 20% £0 - £31,865
Higher Rate: 40% £31,866 - £150,000
Additonal Rate: 45% Over £150,000
National Insurance Contributions – rates & allowances
There is no change to the Class 1 NIC primary or secondary rates; there are changes to the thresholds, except for the Upper Accrual Point.
Threshold AmountLower Earnings Limit (LEL) £111 weekly
Secondary Threshold (ST) £153 weekly
Primary Threshold (PT) £153 weekly
Upper Accrual point (UAP) £770 weekly – no change
Upper Earnings Limit (UEL) £805 weekly
New Statutory Payment Rates and thresholds – effective 6th April 2014
Statutory Payment Weekly Earnings threshold
Standard Rate
Statutory Adoption Pay £111 £138.18
Statutory Maternity Pay £111 £138.18
Ordinary Statutory Paternity Pay
£111 £138.18
Additional Statutory Paternity Pay
£111 £138.18
Statutory Sick Pay £111 £87.55
Student Loan Recovery
The student loan threshold for 2014-15 is increased to £16,910 per annum.
For more detail on rates and thresholds, including advisory fuel rates for company cars and mileage payments for business travel, please follow the link to the HMRC website here.
New timetable for RTI penalties
HMRC has decided to stagger the start of the new in-year late filing penalties. The new timetable will be:
� April 2014 – In-year interest on any in-year payments not made by the due date
� October 2014 – Automatic in-year late filing penalties
� April 2015 – Automatic in-year late payment penalties
HMRC unveils new timetable for RTI penalties - News stories - GOV.UK
The current standard penalties (to be confirmed) are as follows:
� £100 for schemes with 1 – 9 employees;
� £200 for schemes with 10 – 49 employees;
� £300 for schemes with 50 – 249 employees; and
� £400 for schemes with 250 or more employees.
Extra paydays
This year HMRC has highlighted that if a weekly, two weekly or four weekly payroll is operated and the final pay day falls on 5th April 2014, i.e. that there is an extra pay day in the year and therefore a week 53, 54 or 56 is operated, then it’s possible that employees may underpay tax.
This is because an extra period of their Per-sonal Allowance is given to protect their take home pay. If this does result in an underpay-ment HMRC will recover the underpayment from the employee at a later date. Any employee affected will receive a P800 Tax Calculation notice which will explain how the underpayment will be collected.
Tax exemption for medical treatments
In the 2013 Budget the Government has announced that it will introduce a tax exemption for amounts up to £500 a year paid by employers for employee medical treatments if recommended by the Health and Work Service.
Other informationFollowing consultation the Government has decided to extend the exemption to treatments recommended by employer arranged health services.
Individual Saving Accounts, Child Trust Fund, Share Incentive Plans and Save As You Earn Annual subscription limits 2014-15
� for Share Incentive Plans the individual limits on the ‘free’ shares companies can award to employees from 6 April 2014 will be increased from £3,000 to £3,600 per year and the individual limits on the ‘partnership’ shares employees can purchase will be increased from £1,500 to £1,800 per year (or 10% of an employee’s annual salary)
� for Save as You Earn the amount that employees can save and apply towards the purchase of share from 6 April 2014 will be increased from £250 to £500 per month
� the overall annual Individual Savings Account subscription limit for 2014 to 15 will be £11,880, of which £5,940 can be invested in cash
� the annual subscription limit for Junior ISA and Child Trust Fund for 2014 to 15 will increase from £3,720 to £3,840
Recognising marriage in the tax system
From April 2015, a spouse or civil partner who is not liable to Income Tax or not liable above the basic rate for a tax year will be entitled to transfer £1,000 of their personal allowance to their spouse or civil partner provided that the recipient of the transfer is not liable to Income Tax above the basic rate.
The transferor’s personal allowance will be reduced by £1,000. The spouse or civil partner receiving the transferred allowance will be entitled to a reduced Income Tax liability of up to £200.
Abolition of National Insurance Contributions for under 21s
From 6 April 2015 employers will no longer be required to pay Class 1 secondary National Insurance Contributions on earnings paid up to the Upper Earnings Limit to any employee under the age of 21.
HMRC Employer Bulletin For more information please see the latest Employer Bulletin published by HMRC hereand the Autumn Statement 2013 here.
A dedicated email address is available for any queries. Please email your questions to [email protected].
