Who is likely to be affected?
Employers with employees under the age of 21.General description of the measure
From 6 April 2015 every employer with employees under the age of 21 will no longer be required to pay Class 1 secondary National Insurance contributions (NICs) on earnings up to the upper earning limit (UEL), for those employees.Proposed revisions
Under proposals and subject to earnings up to the UEL, employers who employ or engage employees under the age of 21 at or after 6 April 2015 will not be required to pay employer NICs on the earnings they pay to those employees. The UEL in 2015-16 is expected to be £813 per week (annual equivalent £42,285).
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The rates which employers can use to reimburse employees who pay to put petrol in their company cars when they are using them for business have been updated. These rates apply to all journeys undertaken on or after 1 March 2015
until further notice. For one month from the date of change, employers may use either the previous or new current rates, as they choose.
The government has announced that the official rate of interest will be 3% from 6 April 2015. This will be a fall from the current rate of 3.25%.
The official rate of interest is used in calculating the benefit-in-kind charge on beneficial loans to employees and on living accommodation provided for an employee or director. It is also use in calculating the pre-owned asset charge on assets other than land.
The GOV.UK website has tables of the current and all previous rates
How does an employee notify the employer of their intention to take shared parental leave?
There are various procedural steps that an employee must follow in order to take shared parental leave.
Notice of Entitlement
The mother must end her maternity leave before she takes shared parental leave. She can do this by either returning to work before the end of her maternity leave period; or by giving the employer notice to end her maternity leave on a particular date. When giving notice, both mother and her partner must tell their employer that they wish to opt into shared parental leave no earlier than the 11th week before the EWC and no later than the 9th week before the end of the maternity leave period. Notice must be given at least 8 weeks before a period of leave is taken. The correct documentation must be used by the employee when giving notice. The employee must set out an approximate idea of how many periods of leave they intend to take, and the length of the periods. This notification is not binding so the employee does not have to take their leave on the dates they have set out but it gives the employer an initial idea.
This Notice is Binding
The Notice of Entitlement is (excluding the indication of periods of leave) binding in terms of the notification to end her maternity leave and there are only limited circumstances in which it can be withdrawn. The Notice of Entitlement acts as self-certification that the employee and the person they are sharing their leave with both qualify to take shared parental leave. There is no need for employers to check up on the information provided, although the employer can ask their employee for the baby’s birth certificate and their partner’s employer’s details. This should be requested within 14 days of receiving the Notice of Entitlement, and then the employee must provide this within 14 days. The above procedure lets the employer know that their employee intends to take shared parental leave.
If you need any clarification on this issue then contact the CCH employment helpline.
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The Government has announced changes to the payment of Class 2 NIC. The proposed changes for customers who complete self employed and/or partnership pages on their tax returns are as follows:
- In April 2015 - taxpayers will receive their last Class 2 National Insurance Contributions payment requests under the current collection process;
- from April 2016 - any class 2 National Insurance Contributions due from 6 April 2015 will be collected with taxpayers' tax and class 4 National Insurance contributions; and
- If the taxpayer's self assessment payments are up to date and taxpayers would prefer to spread the cost of their tax and National Insurance Contributions, there will be an option in Self Assessment to set up a budget payment plan. More details are promised to follow.
HMRC is to withdraw the business entity tests (BETs) intended to help taxpayers assess whether they might be caught by the IR35 legislation, after a review conducted by the IR35 Forum found that the tests were used “very little” and were not fulfilling their intended purpose.
The tests and example scenarios will be withdrawn from 6 April 2015 and will not be replaced. “Until then, businesses can continue to take the BETs if they wish or are asked to do so as part of a tendering process,” HMRC said in a statement on its website this morning. New guidance will be published at gov.uk.
From 6th October 2014 HMRC will levy late submission charge for all businesses with 10 employees or more and all new businesses set up in the 2014-15 tax year comes into force, charged on a sliding scale as a percentage of your expected FPS submission value. There will be no charge for one late submission in a tax year (including tax year end, due on 20th April 2015), but each subsequent late submission will be charged as follows:
Number of employees
Amount of the monthly filing penalty per PAYE scheme
1 - 9*
10 - 49
50 - 249
*This charge will be waived until March 2015
The Following daily interest rate charges will be applied to the outstanding monies owed for all businesses:
- 1 - 3 late submissions will be charged as 1% of the late estimated monetary value
- 4 - 6 late submissions will be charged as 2% of the late estimated monetary value
- 7 - 9 late submissions will be charged as 3% of the late estimated monetary value
- 10 or more late submissions will be charged as 4% of the late estimated monetary value
If you have still not paid a monthly or quarterly amount in full, after six months you will have to pay a penalty of 5% of the amounts unpaid. A further penalty of 5% will be charged if you have not paid after 12 months. These penalties may be charged in addition to the penalties for monthly and quarterly payments described in the previous section and apply even where only one payment in the tax year is late.
HMRC sends thousands of tax letters to landlords
HMRC is turning up the pressure on buy-to-let landlords who may have underpaid tax on their rental income by sending out 40,000 letters to landlords. The letters ask the recipient to contact HMRC to confirm details of their tax affairs or run the risk of a tax investigation.
Your client may well have received one of these letters already, as HMRC has already written to some 5,000 landlords. The letter provides the taxpayer just 30 days to respond before HMRC escalates its investigation into their tax affairs.
The letter warns that taxpayers who do not contact HMRC voluntarily to discuss their tax affairs are at risk of a “higher penalty or … criminal investigation.”
We have a client where the failure to disclose was picked up from information provided by the rent deposit scheme to HMRC.
VAT registered businesses tell us that they find it really helpful to receive an email reminder to let them know when their return is due.
It’s easy to sign up for the email:
- Log in to HMRC Online Services or via www.hmrc.gov.uk
- Select ‘Your Account’ from the Main menu
- Select ‘Update personal details’ from the ‘Your contact details section’