Tax Tips

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Here are some of our latest Tax Tips!

Workplace Pensions (Auto-Enrolment)

Under the Pensions Act 2008, every employer in the UK must put certain staff into a pension scheme and contribute towards it.  This is called ‘automatic enrolment’.

Initially, it was the larger companies that were affected, but now many more small businesses are reaching their ‘staging date’ – the date by which they need to comply with the legislation to avoid penalties.  You can check when your staging date is here, by entering your PAYE reference number.

By the time the staging date is reached, employers must have a pension scheme in place, and must automatically enrol all workers who:

  • Are not currently in a pension scheme
  • Are aged between 22 and state pension age
  • Earn more than £10,000 a year
  • Work in the UK

More detailed information can be found on The Pensions Regulator’s website.

(NEST is the workplace pension set up by the government which is free for employers – if you need help, we can set up a NEST scheme on your behalf).

The New State Pension

Tax tip for week 11th March 2016

The new State Pension is a regular payment from the Government that you may be able to claim if you reach state pension age on or after 6th April 2016.

You will be able to get the new State Pension if you’re eligible and you’re either:

  • A man born on or after 6th April 1951, or
  • A woman born on or after 6th April 1953

The full new State Pension will be £155.65 per week, but the actual amount payable could be higher or lower than this, depending on your National Insurance contributions record.

You will need a minimum of 10 qualifying years of contributions to qualify for any new State Pension.

For more information about eligibility and how the amount payable is calculated, please see the HMRC website.

National Living Wage

Tax tip for week 26th February 2016

Do you employ anyone that is currently earning the National Minimum Wage?

If so, you need to be aware that as from 1st April 2016 the Government’s new National Living Wage will become law.

From this date, employers will need to make sure that all staff aged 25 or over, who are not in the first year of an apprenticeship, are paid at least £7.20 per hour (the current National Minimum Wage will continue to apply for those under the age of 25).

It is the employer’s responsibility to ensure that all of their employees are being paid in accordance with both the National Living Wage and the National Minimum Wage and failure to comply may result in penalties.

The National Minimum Wage rates for those aged under 25 change on 1st October every year whilst the National Living Wage rates for those aged 25 and over will change on 1st April every year.

Full details of the rates for both can be seen here.

Construction Industry Scheme

Tax tip for week 12th February 2016

If you are a contractor working in the construction industry, please note that from April 2016 HMRC will no longer accept your monthly Returns on paper forms.

From April, all contractors will have to use the online service for submitting Returns and amendments.  In April 2017, the telephone verification service for subcontractors will also cease and everyone will then have to use the online filing service for both CIS returns and verifications.

If you still currently send paper CIS Returns, you will need to register for online filing as an ‘Organisation’ ahead of the April 2016 deadline, using your HMRC Employer Reference and Accounts Office Reference.

If you are already using HMRC online services there is no need to do anything now.

Please check the HMRC website for any further updates over the next couple of months.

Check Your Tax Code

Tax tip for week 15th January 2016

Many PAYE tax codes are issued incorrectly by HMRC, and you should always check that you are paying the right tax through PAYE, particularly if you receive one or more pensions.

In addition, HMRC may have included estimates for future income in the code – i.e. rental profits – which means that you will be taxed on that income earlier than if you were to have your tax assessed through your Self Assessment Tax Return!

Remember also that the new Marriage Allowance comes into effect this April – if you are eligible to claim, please ensure that you have registered and the allowance is included in your 2016/17 code.

Please note that tax advisors don’t automatically get sent copies of their clients’ coding notices, so if you have an accountant, it is always a good idea to forward a copy to them to check on your behalf.