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Child Benefit Change for High Earners

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From 7th January 2013, any taxpayer earning more than £50,000 a year who receives Child Benefit, or whose partner receives Child Benefit, will be liable to incur a new income tax charge.

Anyone who has to pay the charge will need to pay an amount equivalent to some or all of the Child Benefit that they or their partner receive. For those with income between £50,000 and £60,000, the tax charge will be 1% of the Child Benefit for every £100 above the £50,000.   Those with income above £60,000 will be charged the full amount of the Child Benefit and might wish to stop receiving Child Benefit payments.  If customers choose to keep  receiving the Child Benefit payments they will need to declare the amount which they or their partner are entitled to receive by registering for Self Assessment and filling in a tax return each year.

HMRC will write to taxpayers who are likely to have income over £50,000 to explain the changes and tell them what they need to do if they are affected. Those who pay income tax via PAYE can choose to have the underpayment for 2012-13 and their ongoing in-year liability collected through their tax code in 2014-15.  However, they must still complete a Self Assessment return.  To find out more go to hmrc.gov.uk/childbenefitcharge

Payroll Giving

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Payroll Giving was launched back in 1987 but only 6% of UK employers currently offer the scheme to their employees, so there is still massive scope to give charities access to huge income they are missing out on. Many employees would like to donate to charity this way but more businesses need to offer payroll giving to meet this demand. It is a great way for employers to show they care about more than just their profits, it helps their staff feel they are doing something positive and it costs nothing to set up.

The attractiveness of payroll giving to charities is clear, as they receive all of the tax on every donation they receive. If an employee donates £10 a month to be deducted from their salary via the payroll, the charity actually receives £12.50, making their money go even further. The real benefit is that it forms a sustained, regular income stream that charities can rely on. Employees also get immediate tax relief and employers get a Quality Mark award for demonstrating commitment to the causes that their employees care about, so everybody wins.

Please consider payroll giving for your business, your employees and your local charities this Christmas.

Outsourced Payrolls for Brighton Accountants

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We are delighted to announce that we have teamed up with Brighton Accountants Feist Hedgethorne who have made the decision to outsource their entire client payroll service to Sussex Payroll Services.

We had worked several years ago with Jamie Young, now one of the directors at Feist, who knew we had set up our own business and were doing well and were successfully working with other local accountants who had outsourced their payrolls to us.

When Feist’s Payroll Manager recently advised them she was leaving, this prompted the partners to consider carefully how they best provide on-going payroll services for their 165 clients and they concluded that the best option was to work in partnership with a specialist local payroll bureau and came to us. This brings our client count to over 350 payrolls in less than 2 years in business of which we are extremely proud.

RTI Is Coming… Are You Ready For It?

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The move to reporting PAYE information online to HMRC in REAL TIME is mandatory. Most employers will have to move to operating RTI (Real Time Information) from April 2013. In October 2012, HMRC will write to all employers telling them what they need to do to get ready for RTI, and in February 2013 they will confirm the date from which each employer should start reporting their PAYE information in real time. From their given date, all employers must report payroll information to HMRC on or before every payday instead of after the end of the tax year. These reports will be made online using payroll software, and must include all employees, so there are some things you must now consider:

Does your payroll software allow you to submit PAYE information in real time?

If not, you must look at updating your payroll software as soon as possible or change to a software package that can. Alternatively you may want to consider getting a payroll bureau to do the reporting for you.

Is your employee data complete and correct?

It is essential that you have accurate employee data, so before starting to use RTI you must check that the data you hold in your payroll records is complete and accurate: Full name, date of birth, National Insurance number, gender and address.

Do you pay your employees by BACS?

Employers making payments to their employees by BACS, using their own service user number, will need to include a cross-reference in the RTI data submission and their BACS payment instruction.

To keep up to date on any RTI developments go to www.hmrc.gov.uk/rti

The National Minimum Wage October 2012

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The national minimum wage (NMW) is the set minimum hourly rate that UK employers must pay their workers. There are three aged based rates and an apprentice rate which are usually updated in October each year.

Almost all workers who work in the UK are entitled to the NMW, except self-employed people and children who are still of compulsory school age.

The rates from October 2012 are as follows:

  • Adult Rate (21 and over): Increase of 11 pence to £6.19 an hour
  • The 18-20 year olds rate will remain at £4.98 an hour
  • The 16-17 year olds rate will remain at £3.68 an hour
  • The apprentice rate: Increase of 5 pence to £2.65 an hour

HMRC enforces the national minimum wage and if they find you have underpaid the NMW they will issue a notice of underpayment showing the arrears you must pay to your workers and possible penalties you must pay HMRC.

Does your payroll software flag up when employees rates are due to be reviewed? Check your employees’ ages and make sure you increase their hourly rates when applicable.