Consequently, the taxman will write to all employers in the UK next month to outline the key changes to PAYE reporting coming into effect next year, and according to the employment tax team at the department, this could be the first some employers will have heard of the scheme, despite it being the most radical shake up of the PAYE system in over 60 years.
However, HMRC is confident that it will have 250,000 PAYE schemes submitting payroll information in ‘real time’ on about 6 million employees by the end of March.
In addition all employers with more than 5,000 members of staff are expected to have RTI in place by the end of September next year.
Under the RTI scheme, employers and pension providers or their agents will submit information about tax, national insurance contributions, student loans and other deductions, on each pay date, instead of at the end of the tax year.
This information will be used by the Department for Work and Pensions as the basis for calculating the new Universal Credit benefit coming into effect from October 2013.
Stage one of the department’s pilot scheme, which ran from April to June, involved a trial with 300 volunteer employers, of differing sizes and from a wide range of sectors, submitting real-time information for some 1.7 million employees.
HMRC have claimed that “very few problems came to light, and those that did were very quickly resolved” by discussions with employers, their IT departments and payroll software providers.
For more information, please contact Glazers, Chartered Accountants London or visit www.glazers.co.uk
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( 3.8 / 956 )Official figures produced by the Office for National Statistics (ONS) have shown that the UK economy shrank by 0.4 percent in the period from April to June, lower than the revised forecast of 0.5 percent, which most analysts had thought to be correct.
According to the latest figures, the main drag on the economy was a 3 percent slump in construction output in the second quarter, although this was better than the first estimate of a 5.2 percent decline.
Despite the economy having contracted for three quarters in a row, the figures could suggest very modest underlying growth in the second quarter, because much of the weakness is thought to have come from one-off factors.
For example, the Bank of England estimates that output suffered a 0.5 per cent hit from the extra bank holidays in June that marked the Queen’s Jubilee celebrations.
The data also showed an improvement in household spending power that reflects a decline in the inflation rate since last year and could augur well for economic growth in coming quarters. Real household disposable income rose 1.6 percent on the quarter, the biggest rise since the second quarter of 2009.
Also promising was an upward revision to business investment, now showing a 0.9 percent rise on the quarter instead of the 1.5 per cent fall first estimated by the ONS.
Other figures from the ONS showed a record deficit on the U.K. current account, which is a measure of its trade and foreign investments. The current account deficit grew to £20.8 billion in the second quarter from an upwardly revised £15.4 billion between January and March, which was chiefly due to lower profits from U.K. companies' subsidiaries abroad.
For more information, please contact Glazers, Chartered Accountants London or visit www.glazers.co.uk
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( 2.9 / 584 )HM Revenue & Customs (HMRC) have announced that it will be offering an amnesty to people who sell door-to-door to either householders or businesses.
The amnesty means that if the direct seller pays any outstanding tax bills by 28 February 2013, they will face lower penalties for coming forward.
The scheme is open to all self-employed direct sellers, who might be termed agents, consultants, representatives' or distributors. It also includes people who demonstrate a product in a customer’s home, or at a party, or by using catalogues; as well as anyone who takes commission on the sales they make, even if they only sell to friends and relatives, whether it is their full or part-time job.
HMRC calculates that any direct seller who started before April 6 last year and who hasn’t told the department about any income derived from direct selling won’t have paid the correct amount of tax.
Therefore the department is advocating a “fresh start”, whereby the direct seller can tell HMRC how much penalty they think they might have to pay and then arrange to pay it, maybe even in instalments.
The disclosure is only applicable to people who started as a direct seller before April 6 last year, but HMRC advises anyone who took up the business since then to register with them.
For more information, please contact Glazers, Chartered Accountants London or visit www.glazers.co.uk
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( 3 / 727 )New research from peer-to-peer lending website Funding Circle reveals that up to 500,000 new jobs could be created by small businesses if they could obtain finance for growth.
The study, which claims to be the first of its kind to quantify what the impact of lack of finance is on small businesses, identified the potential of what they call Britain’s “Caged Tigers”, who are trying to throw off the straightjacket of high street business banking.
A third of those surveyed said they would increase staff numbers if they could obtain finance, while 31 percent would seek to grow their business more generally.
The survey also revealed that those businesses looking to increase their staff, if funding permits, would do so by an average of 12 percent.
This means, with small businesses being responsible for employing approximately 13.8 million people in the UK, improved access to finance for the 1.5 million “Caged Tigers” could make a huge difference to the employment landscape.
The study was published as Business Secretary Vince Cable announced further information on the setting up of a new £1bn Business Bank for small businesses aimed at addressing the “long-standing, structural gaps in the supply of finance”.
For more information, please contact Glazers, Chartered Accountants London or visit www.glazers.co.uk
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( 3 / 667 )HM Revenue & Customs’ (HMRC) ‘affluence Unit’ is to target homeowners with properties worth over £1m in a new crackdown on people with an affluent lifestyle.
If they suspect that such people are not paying enough tax, they will have the power to ask them to account for their earnings or how they acquired the property.
Writing in the Mail on Sunday yesterday (September 23rd 2012), Chief Secretary to the Treasury Danny Alexander announced the crackdown and said that the number of staff at the Affluence Unit (AU) of HMRC will increase from 200 to 300 to manage the additional workload.
The units range will be extended to include 500,000 people worth more than £1million and will use IT software to look across files and records to work out anomalies in people’s tax affairs that suggest there might be avoidance going on.
He went on to say that wealthy footballers will be among those to face renewed scrutiny from the taxman and could face fines of up to £100,000 if they are found to have dodged any tax.
In addition, the government will tell the BBC's new director general George Entwistle to make sure the corporation's highest paid stars and executives do not use tax avoidance ploys, as Mr Alexander wants to stop the practice of the BBC paying its stars via private companies.
The unit was set up last year to raise an extra billion pounds in extra tax within three years and has around 200,000 people in its sights, described as “high net worth” individuals, who have a net wealth of between £2.5m and £20m and are paying the 50 percent top rate of income tax.
For more information, please contact Glazers, Chartered Accountants London or visit www.glazers.co.uk
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