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The Coronavirus Job Retention Scheme (CJRS) is changing

2020-06-02T23:22:51+01:00June 3rd, 2020|Categories: COVID-19, PAYE|Tags: , , , , , |

UK Chancellor Rishi Sunak outlined changes to the furlough scheme during the daily press briefing (29 May 2020). The Chancellor stated that in June and July the furlough scheme will continue as before, but employers will be asked to cover National Insurance and employer pension contributions in August. By September, businesses will pay 10% of wages for furloughed staff, and in October 20%, the UK chancellor said. This means the subsidy will taper off from August, with businesses expected to pay a greater share of their staff salaries, starting with covering National Insurance and pension contributions. From September the [...]

Employment allowance

2019-08-23T16:22:32+01:00August 9th, 2019|Categories: Blog, PAYE|Tags: , , , |

The employment allowance (EA) was introduced from April 2014, potentially cutting every employer’s NIC payments by allowing businesses and charities to offset up to a pre-set annual threshold (£3,000 from April 2016, previously £2,000) against their employer PAYE NIC liabilities. Employers may generally claim the EA if they are a business (including a Community Amateur Sports Club) that pays employer Class 1 NICs on employees’ or directors’ earnings and is not funded by central government or a charity. To keep the process as simple as possible for employers, the EA is delivered through standard payroll software and HMRC’s real [...]

Are you paying the minimum wage?

2019-09-02T11:27:54+01:00June 23rd, 2019|Categories: Articles & Guides, Blog, PAYE|Tags: , , , , |

The National Living Wage (NLW) and National Minimum Wage (NMW) increased from 1 April 2019. From that date, the NLW, payable to workers aged 25 and over, is set at £8.21 per hour. Workers under the age of 25 and over school leaving age must be paid the NMW appropriate for their age. From 1 April 2019, this is £7.70 per hour for workers aged 21 to 24, £6.15 per hour for workers aged 18 to 20 and £4.35 for workers above school leaving age and under 18. A separate rate of £3.90 per hour applies to apprentices under [...]

PAYE settlement agreements

2019-08-23T16:17:07+01:00June 21st, 2019|Categories: Articles & Guides, Blog, PAYE|Tags: , , , |

A PAYE Settlement Agreement (PSA) enables the employer to pay the tax and National Insurance instead of the employee on those benefits and expenses included within the PSA. This can be useful to preserve the beneficial nature of the benefit, for example in respect of a Christmas or other function falling outside the associated exemption, or where the effort involved in reporting the benefit on individual employees’ P11Ds is disproportionate to the amount involved. What can a PSA be used for? A PSA cannot be used for all benefits – only for those which fall into one of the [...]

Employing family members

2019-09-02T11:27:19+01:00June 17th, 2019|Categories: Articles & Guides, Blog|Tags: , |

It is permissible for a business to claim a tax deduction for the cost of a reasonable wage paid to a family member who helps in the business. Their duties could, for example, include answering the phone, going to the bank, bookkeeping and other administrative tasks. The tax legislation specifies that ‘in calculating the profits of a trade, no deduction is allowed for expenses not incurred wholly and exclusively for the purposes of the trade’, which indicates that as long as the work is undertaken, the payments are realistic and actually made, there should not be a problem with [...]

National Minimum Wage Increases from 1st April 2019

2019-09-02T11:22:15+01:00March 29th, 2019|Categories: PAYE|Tags: , , , |

New rates for the National Minimum Wage (NMW) take effect from 1 April 2019, and employers must ensure that they implement them accordingly. The rates are as follows: 25 and over - £8.21 per hour; 21- to 24-year-olds - £7.70 an hour; 18- to 20-year-olds - £6.15 an hour; 16- to 17-year-olds £4.35 an hour; and Apprentice rate - £3.90 an hour. The increased NMW penalty took effect from 1 April 2016 and applies to any notice of underpayment relating to a pay reference period beginning on or after that date. Broadly, the penalty percentage which may be imposed [...]

Employer responsibilities for tips

2019-09-02T11:22:04+01:00March 16th, 2019|Categories: Blog, PAYE|Tags: , , , , |

The tax and NIC treatment of tips will depend on how they are paid to the recipient. Cash tips handed to an employee, or say, left on the table at a restaurant and retained by the employee, are not subject to tax and NICs under PAYE, so there is not responsibility for the employer to keep track of them and deduct tax or NICs. The employee is however, obliged to declare the income to HMRC and pay the tax and NICs due. By contrast, if the employer passes tips to employees that are either handed to him (or the [...]

PGLs for employers

2019-09-01T23:08:20+01:00December 19th, 2018|Categories: Blog, PAYE|Tags: , , , , |

The Department for Education has launched a new Student Loan product known as Postgraduate Loans (PGLs). From April 2019, individuals will be able to start loan repayments of this type through PAYE, so employers need to be aware of their new obligations. Broadly, if an individual has a PGL: - HMRC will send their employer a new Postgraduate start notice (PGL1) to ask them to start taking PGL deductions - HMRC will send their employer a new Postgraduate stop notice (PGL2) to ask them to stop taking PGL deductions - employers will collect payments through the normal PAYE process - [...]

Casual Employees

2019-09-01T11:38:58+01:00August 15th, 2016|Categories: PAYE|Tags: , |

Some employers will be considering taking on extra staff on a 'casual' basis to cover the summer period. There are a few issues which employers should think about when taking on people on a temporary basis. Firstly, the employment status of the worker needs to be carefully considered. The term 'casual worker' is not precisely defined in statute. It is often used to refer to individuals who are engaged on an 'as and when required' basis, and often, the intention is that the individual will not have employment status and all the legal rights which permanent employees enjoy. Although [...]