Fancy a NIC Holiday this Autumn ?

New businesses outside of London, the South East and East of England can start claiming a holiday from NIC contributions for their first 10 employees starting from Monday 6 September until 5 Setpember 2013.

The Regional Employer National Insurance contributions Holiday for New Businesses, to give it the official name, was unveiled by Chancellor George Osborne’s June Budget and will allow new employers to make a deduction against the amount of Class 1 NICs they pay each month or quarter. The holiday will apply to the first 10 “qualifying employees” taken on by companies that started after 22 June Budget statement.

An HMRC Technical Note sets out the detailed conditions attached to the holiday, which will apply during the employees’ first year with the firm or until they leave, and will be limited to £5,000 for each employee.

For more information please call us.

Posted By Haydn Pyatt - 2010-09-06.
Tags: Small Business, Tax

Latest Fuel Rates from HMRC

HMRC reviews the published advisory fuel rates every six months and the new rates are effective from 1 June 2010

Employers may choose to: implement the new rates immediately or use the old rate for up to one further month, and require employees to make supplementary payments if the new rates cannot be applied immediately, although there is no obligation to do so.

HMRC explains the way in which the rates are calculated. They are based on average fuel consumption for the different engine sizes, reduced by 10% to make the figures more realistic. The fuel prices used are petrol – 119.9p per litre ; diesel – 121.9p per litre ; LPG – 65.4 p per litre

The advisory fuel rates are provided by HMRC for employers to apply where they reimburse employees for business travel in their company cars, or require employees to repay the cost of fuel used for private travel in company cars.

Further information: HMRC Fuel Rates

Posted By Haydn Pyatt - 2010-06-04.
Tags: Tax, Small Business

Interest on Late PAYE

With effect from 19th May HMRC will be charging interest penalties on any late payment of PAYE.

The late payment penalties apply to all employers and contractors – whether you employ one or several hundred employees or subcontractors. They apply to monthly, quarterly and annual periods of PAYE starting on or after 6 April 2010.

Late payment penalties could be charged on any PAYE amount due if it isn’t paid in full on time, including

* monthly or quarterly PAYE (Pay As You Earn) * student loan deductions * Construction Industry Scheme (CIS) payments * Class 1 National Insurance contributions (NICs) * annual payments of employers’ Class 1A NICs * annual PAYE Settlement Agreements (PSA) payments * PAYE determinations or charges raised

Notification of a late payment penalty

If a penalty is due, HMRC will send you a late payment penalty letter telling you how much you owe and when you have to pay it by. It will also tell you what to do if you think the penalty is wrong, including how to appeal.

For penalties relating to late payments that occurred in the 2010-11 tax year, HMRC will send notifications of late payment penalty charges after the end of the year. HMRC has up to two years after the late payment occurred to issue a penalty letter.

It is your responsibility to make sure that you pay on time. HMRC does not issue reminder letters.

PAYE/National Insurance payments and deadlines

Penalty rates and how they will apply

Penalties will be charged on each PAYE scheme independently. Therefore, if you operate more than one PAYE scheme you need to make sure that amounts due for each individual PAYE scheme reference is paid in full on time.

Monthly or quarterly PAYE payments

You will not be charged a penalty if only one PAYE amount is late in a tax year – unless that payment is over 6 months late.

The amount of the penalty will depend on how much is late and how many times your payments are late in a tax year. So if you pay part of what is due on time then any penalty will only be charged on the part that is late. The penalties range from 1% to 5% depending on hoew many times you have been late in making your payments.

Visit the HMRC WebSite for the current rates at http://www.hmrc.gov.uk/paye/problems-inspections/late-payments.htm

If you have still not paid a monthly or quarterly amount in full, after six months you may have to pay a penalty of 5%. A further penalty of 5% may be charged if you have not paid after 12 months. These penalties apply even where only one payment in the tax year is late.

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Posted By Haydn Pyatt - 2010-04-22.
Tags: Tax, Small Business

Post early for VAT

HMRC have announced that from 1 April 2010 all cheque payments by post will be treated as being received by HMRC on the date when cleared funds reach HMRC’s bank account. So please allow an extra 4 days if you want to avoid getting sucked into the penalty regime.

It seems to be part of HMRC’s bludgeoning of the taxpayer to use electronic banking. If you file online and pay electronically you have until 7th of the month, pay by direct debit then you have until the 10th of the month to pay.

Posted By Haydn Pyatt - 2010-03-08.
Tags: Small Business, Tax

Pre Budget Report

Another damp squib announcment that was more about setting the scene for next years election than curing the budget deficit.

National Insurance contributions:

All employer, employee and self-employed National Insurance contributions will increase by a further 0.5 per cent from April 2011, adding to the 0.5 per cent hike already penned in to take affect from April 2011 (announced in the 2008 pre-Budget report). However, to protect those on modest incomes, the chancellor said he would raise the starting point from which National Insurance contributions are payable, so that no-one earning under £20,000 will pay the higher contributions.

The basic state pension: Good news if you already draw a state pension, as it will rise by 2.5 per cent from April 2010.

Child and disability benefits: Effective from 2010, the chancellor will increase child and disability benefit by 1.5 per cent.

Stamp Duty: Calls for the chancellor to extend the stamp duty holiday – which allowed residential homes under £175,000 to be bought tax-free – have been ignored. From 1 January 2010, properties priced over £125,000 will again have to pay a 1 per cent tax on the property.

VAT: VAT which was reduced to 15 per cent during the credit crisis, will return to its normal level of 17.5 per cent from 1 January 2010. The chancellor said there are no further planed changes to the level of VAT.

Your vehicle and your home: Improving energy efficiency

Household boiler scrappage scheme: The chancellor has called for each and every one of us to become more energy efficient and cut household bills. He said each inefficient boiler adds over £200 to household bills and one tonne of carbon to the atmosphere. As a result, 125,000 homes will now be eligible for funding to replace inefficient boilers with new models, from April.

Home wind turbines and solar panels: From April 2010, people with a home wind turbine or solar panels who then plug their excess power into the national grid will receive on average £900 a year tax free from the government.

Electric motoring: In a bid to increase the number of electric cars on UK streets, the chancellor from April 2010, will allow electric car drivers to enjoy tax free benefits exempting the vehicles from company car tax for five years.

The economy: What to expect in the year ahead

Economic growth: The UK economy (GDP) is expected to grow in 2010, by between 1-1.5 per cent. This year the economy is expected to shrink in total by 4.75 per cent.

Inflation: Concerns about inflation look set to continue with the chancellor anticipating inflation will rise to 3 per cent in the early part of 2010, with it then falling back to 1.5 per cent at the end of 2010.

And finally…..Banker bonuses

For all of the bank’s paying bonuses to their bankers in excess of £25,000, a 50 per cent super-tax will be levied on the bank itself in a bid to encourage banks to rebuild financial strength. The measure comes into effect immediately. However any contractual ( as opposed to discretionary ) bonus will be exempt as will any bonus paid after 5 April 2010.

Posted By Haydn Pyatt - 2009-12-10.
Tags: Small Business, Tax