Employment Allowance: April 2016

Employment Allowance Is Now £3,000 But Not Single Director Companies.

You could get up to £3,000 a year off your National Insurance bill if you’re an employer.

The allowance will reduce your employers’ (secondary) Class 1 National Insurance each time you run your payroll until the £3,000 has gone or the tax year ends (whichever is sooner).

You can only claim against Class 1 National Insurance you’ve paid, up to a maximum of £3,000 each tax year. You can still claim the allowance if you pay less than £3,000 a year.

For the last two years there has been a £2,000 allowance available to employers to set against their employers National Insurance liability for the year. This increased to £3,000 from 6 April 2016 and no action is required if you claimed the allowance for 2015/16. However, from 6 April 2016, limited companies where the director is the only employee paid earnings above the Secondary Threshold for Class 1 National Insurance Contributions (£156 a week) will no longer be entitled to claim the Allowance.

HMRC guidance states that if more than one employee or director earns above the Secondary Threshold, the company will continue to be eligible for Employment Allowance for the whole tax year. This other employee could be the director’s spouse or partner. The HMRC guidance is not consistent with the legislation however and we hope to clarify the matter so that you don’t miss out.

More information at https://www.gov.uk/claim-employment-allowance!

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RTI Changes to note for 2016!

RTI Concessions for Small Employers to end from 6 April 2016

The Government announced at Autumn Statement 2015 that the current two year temporary reporting relaxation will end as planned on 5 April 2016.
The relaxation permitted employers who at 5 April 2014 employed no more than 9 employees, to report their PAYE information for the tax month ‘on or before’ the last payday in the tax month instead of ‘on or before’ each payday.
This will align the reporting obligations for micro employers with all other employers who are currently required to report payments ‘on or before’ each payday.
As a consequence ‘Late reporting reason code E’ will not be valid from 6 April 2016.

End Of Year PAYE Return Reminder

Under RTI the end of year form P35 was replaced by the Final Full Payment (FPS) submission.
Send your final FPS on or before your employees’ last payday of the tax year (5 April) instead of the old 19 April deadline.
Remember to put ‘Yes’ in the ‘Final submission for year’ field in your payroll software.

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Payrolling Of Benefits In Kind - HMRC Update!

Legislation to require employers to report 'Benefits in Kind' in real time as opposed to the end of year form P11D was included in the first Finance Act of 2015. However, there are concerns amongst accountants that this should not be mandatory until 2017/18 at the earliest, as many employers are only just getting to grips with real time processing of basic wages and salary data.

The new system will require employers to calculate the cash equivalent of the Benefit in Kind and effectively spread it over the tax year. The tax due on benefits will then be collected by adding a notional value to the employee’s payroll, rather than reporting the Benefits in Kind separately on the end of year form P11D.

End of Informal Payrolling process

If you have an existing informal payrolling arrangement with HMRC this will stop on 5 April 2016.

If you continue with this process the P11Ds you submit may be processed and your employees may be taxed twice on their benefits. To avoid this you should use the online PBIK service to register the benefits you’re payrolling. This means you’ll no longer need to submit P11Ds for payrolled benefits and expenses.

More about Payrolling Benefits in Kind online service

Please get in touch with us if you would like to use this system for 2016/17 as you will need to register with HMRC before 6 April 2016.
☎ 020 89310165 | ☏ 07900537459 | ✉ info@apjaccountancy.com