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Newsletter Spring 2014

Author: Mark Thomas
Date: 2nd April 2014
Tags: NewsletterRTITax

Please have a look at our latest newsletter which covers issues such as the new employment allowance, high income child benefit charge, RTI, P11d's, HR and workplace pensions


Spring 2014


• New TCL director, Mark Witt, is tax enquiry specialist

• Employment Allowance: up to £2,000 off Class 1 NICs
• Affected by the High Income Child Benefit charge?
• EOY PAYE RTI for HMRC – we spell it all out
• Do you need to complete a Form P11D?

• “Must I give my staff contracts?” – Alix Passey Brown of Twyford HR

• Workplace Pensions are coming – Colin Merritt marks your card


New TCL director, Mark Witt

We are delighted to welcome Mark Witt on board as director in charge of tax enquiries to assist in more complex tax matters.  As many of you will know Mark has assisted us as a consultant for many years.  However, we are pleased to announce that he is now with us full time and if you need any assistance with any Taxation matter then please do not hesitate to contact him. 


Employment Allowance: up to £2,000 off Class 1 NICs

From 6th April this year, employers can claim the Employment Allowance and reduce employer Class 1 NICs.  You can claim this allowance if you are a business or charity that pays employer Class 1 NICs on your employees’ or directors’ earnings.

You can only claim the £2,000 Employment Allowance against one PAYE scheme - even if your business runs multiple schemes.  Not all businesses can claim the Employment Allowance.

Please talk to your usual Thomas Croft contact for more information on this matter.

Affected by the High Income Child Benefit charge?

If you are liable to the High Income Child Benefit charge, you need to decide whether to keep getting Child Benefit payments and declare them, or arrange to stop the payments instead.  If you were liable for the High Income Child Benefit charge in a previous tax year but have not stopped the payments, you will have to declare them in a tax return.

Making the necessary calculations can be complex and deciding what to do can be difficult.  We are here to help.  Thomas Croft can make the necessary calculations, assess the likely effect and advise on your best course of action.  Please contact us now for a confidential and without-obligation discussion. 

EOY PAYE RTI for HMRC – we spell it all out

As an employer, if you operate PAYE (Pay As You Earn) there are a number of important tasks you need to complete around the end of the tax year (5 April).

You must make sure that you submit your final Full Payment Submission (FPS) and/or Employer Payment Summary (EPS) for the final pay period in the tax year.  HM Revenue & Customs (HMRC) uses the information that you send to make sure that you and your employees have paid the right amounts of tax, National Insurance contributions (NICs) and student loan deductions for the tax year.  The information is also used in the calculation of entitlement to state benefits, tax credits and pensions.

There are a number of aspects to consider – too many to detail here – such as not sending forms P35 and P14 for 2013-14 because of the advent of RTI.  As always, if there is anything you are not sure about, please do not hesitate to get in touch with your usual Thomas Croft contact and we will be only too glad to advise you.

Do you need to complete a Form P11D?

Following the end of the tax year, Forms P11D or P9D for each employee to whom you’ve provided expenses and benefits during the year should be completed and issued, together with one form P11D(b) to declare the overall amount of Class 1A National Insurance contributions (NICs) due thereon.  All of these forms must be submitted to HM Revenue & Customs by 6 July 2014.

Any liability for Class 1A NICs declared on form P11D(b) must then be paid to HMRC by 22 July 2014, or by 19 July if you pay by cheque.

If you require our assistance with this matter, please do not hesitate to let us know.


“Must I give my staff contracts?”

Alix Passey Brown of Twyford HR discusses this important aspect of employment law

We often get asked about contracts of employment, for example, “Must I give my staff contracts?”  The answer to that question is ‘yes.’  As long as they work with you for one month or more, you must give staff what is called a “written statement of terms”.  The law lays down what must be covered as a minimum in the statement – including details of hours, holidays, notice, job title etc.. 

However, the key to a really good employment contract is to ensure that all the necessary business protection clauses are included.  So, if you want to ensure that your employees work exclusively for you, and not the competition, you will need a contract clause that ensures exclusivity.  The same applies to restrictions which carry on after the employment relationship ends and any “special rules” for example about the use of mobile phones, sickness reporting procedures, social media, dress codes and so on. 

If you have a particular need for flexible or zero hours contracts, the various clauses need to be carefully constructed to ensure you stay on the right side of the law.  Written statements must also include references to grievance and disciplinary procedures, but it is vital that you do not make such procedures contractual.  Again, if the words are carefully crafted, you can satisfy the legal minimum but give your business maximum flexibility over when you do and do not have to stick to the procedures.  A common mistake is to make the procedures contractually bound, then fail to use them when dismissing someone and find yourself not only facing a claim of unfair dismissal, but also breach of contract.

Subcontractor contracts are similar beasts and again need to be constructed carefully.  Some subcontractors don’t pass the various tests necessary for HMRC to consider them truly self-employed and you could end up with a ‘pointless’ sub-contractor contract which doesn’t provide the necessary protection for your business.  It is also possible that although a subcontractor is a bona fide self-employed person, they may still qualify as a ‘worker’ for working time or pension purposes.  Such workers have rights to the national minimum wage, paid holiday, rest breaks and access to workplace pension schemes.  If you are unsure as to the status of your subcontractors, don’t have written contacts or have contracts which haven’t been revised recently, you should seek professional help.

Twyford HR Ltd. specialises in human resources and employment law support for small and medium sized businesses and third sector clients across the south of England.  We offer a first free consultation to clients of Thomas Croft Ltd. 
Please contact us at .(JavaScript must be enabled to view this email address) or on 01962 711552 or 07702 886 726.


Workplace Pensions are coming

Colin Merritt warns that there are penalties for non-compliance

You will have seen newspaper articles and television adverts surrounding Workplace Pensions.  Employers and staff alike have been declaring ‘I’m in.’

Until now, Workplace pensions (also known as Auto Enrolment) has only affected larger employers.  However, employers with as few as 60 employees will become affected during 2014, followed by all employers from June 2015 onwards, depending upon your PAYE reference. 

Employers will be responsible for setting up a pension scheme for all eligible employees from their staging date.  There is an initial phasing of contributions, but from October 2018, employers will be legally obliged to contribute 3% of qualifying earnings, provided the employee agrees to contribute 5%.  All qualifying employees have to be enrolled into the new scheme but can ‘opt out’ if they wish.  However, employers are not able to encourage opting out in any way and if found guilty of such practice, there are financial penalties payable.  This is also the case if employers fail to set up a pension scheme by their staging date.

The rules are relatively straightforward but do have their complications.  There is currently a minimum earnings threshold of £9,440 but this is likely to increase year on year.  However, qualifying earnings are those between £5,668 and £41,450.  Therefore, for someone earning £15,000 per annum, contributions would be based upon £9,332 (£15,000 minus £5,668).  From October 2018, this employee would require contributions from their employer amounting to £279.96 per annum.

Employers will also be responsible for their own administration and record keeping.  These can be onerous although there are some pension providers who offer administration software support.

In short, Workplace Pensions are coming and it is vitally important that all employers, even if they have just 1 employee, ensure that they are fully aware of their duties and have a suitable arrangement in place by their staging date.  It can take 6 months to put arrangements in place so leaving it to the last minute is strongly discouraged.

For more information about the potential impact upon you and your business, together with details of your available options, please speak to your Financial Adviser or mention it to your usual contact at Thomas Croft in due course.

Financial TLC from TCL

Get the right accountancy and taxation advice

At Thomas Croft Limited, we pride ourselves on offering a service that gives you:

> Expertise: our directors – Mark, Tony and Mark – have over 60 years’ experience between them, allowing you to benefit directly from their depth and breadth of expertise. 
> Range: we offer the full range of accountancy, taxation and tax enquiry services to clients from private individuals to multi-million pound multi-nationals, meaning that our service to you can evolve as your needs grow.
> Affordability: you pay for exactly the level and type of accountancy, taxation and tax enquiry services that you need, thereby saving significantly over the in-house alternative.
> Confidence: with Thomas Croft Limited in your corner, you can relax in the knowledge that your accountancy and taxation liabilities are being taken care of in a professional, expert and timely manner.

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If you have a colleague or business contact who you consider would benefit from this newsletter, please, with their permission, pass us their details.  We will be glad to forward a copy to them.

Please note that this newsletter is for general guidance only and does not constitute legal advice or an exhaustive summary of recent legislation or tax changes.  While every effort has been made to ensure the accuracy of its content, Thomas Croft Limited accepts no responsibility for the consequences of errors or omissions.



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