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

New Doctor's Statment of Fitness for Work

With effect from 6 April 2010 a new form for doctors to certify a persons fitness for work will be issued. It will add to the existing fit/unfit statement the following

If available, and with your employer’s agreement, you may benefit from:
a) a phased return to work
b) altered hours
c) amended duties
d) workplace adaptations
e) Comments, including functional effects of your condition(s):

This will enable employers to determine whether they can change an employee’s work pattern so that limited or certain duties can recommence.

Posted By Haydn Pyatt - 2010-03-10.
Tags: Employment, Management

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

Things to do before 5 April...

As the new tax year approaches and some radical changes come into force it may be worthwhile considering whether you need to do anything to mitigate your future tax liabilities.

1. For those of you in the upper echelons of income earning, the new 50% tax rate will have a huge effect. Simply speaking the raise in tax is by 25% (10% added over 40% – we can all play the % game) so anything that you can do to avoide the increase will be of immense value. Convert income to capital, receive income early, defer income until later years when a more lenient tax regime is in place are all tactics that can have a beneficial effect for a small outlay.

2. Incorporate your business. For those sole traders and partnerships earning over £15,000 incorporation can often reduce the overall tax and NI bill without a huge increase in compliance costs.

3. Plan capital expenditure. If you are anticipating spending over £50,000 on new plant and equipment, spend £50k now and £50k after the 6 April and get the benefit of 100% capital allowances on the whole amount.

All these point need detailed planning. Give us a call now to avoid last minute chaos.

Posted By Haydn Pyatt - 2010-02-11.
Tags: Tax, Self Employed

Get VAT back from Business Petrol

HMRC announced the new fuel rates for company cars from 1 December 2009 (which takes account of any recent fuel price adjustments as well as the soon to be increased VAT rate).

Employers are not obliged to reimburse their employees for business fuel at these rates as long as they do not exceed them overall. Employers making or collecting payments at the superseded rate because they have not been able to change their systems in time may use their judgement on whether to make or require a second payment in respect of the same period in order to apply the new rate from its effective date. However, employers should note that under the normal rules, employees are only able to avoid the car fuel benefit charge if the amount they repay in respect of private fuel at least equals the amounts based on the rates as published.

Visit the HMRC WebSite for the current rates at http://www.hmrc.gov.uk/cars/advisory_fuel_current.htm

Posted By Haydn Pyatt - 2009-12-17.
Tags: Tax