Visiting House of Parliament

We are now a week on from National Payroll Week 2018 and we had a great time helping to raise the profile of payroll in the UK. The highlights were a visit to the House of Parliament for the launch event with CIPP. Wandering through the history of our country and seeing both how much and how little has changed in this seat of power that makes all of the laws that we are governed by. Much of the building is covered in scaffolding both inside and out but this does not take away from it’s greatness.

The event was added to by the fact that there is currently an exhibition on Women’s Place in Parliament detailing the history of Women getting the vote. It was interesting to wonder around this exhibition as both a women, voter and payroller. I was surprised to see quotes on display that related to what we do in payroll.

Voice & Vote Exhibition House of Parliament

Voice & Vote – Equal Pay 1970

Taxation without representation – Voice & Vote 1913

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National Payroll Week 2018

The 2018 National Payroll Week is due to take place from the 3rd – 7th September. The event originally started to raise the profile of the payroll industry in the UK and to show the impact that payroll has on our economy with £4.46bn being collected through income tax (PAYE) and national insurance each year.

Members of the WPL team will be joining the launch event at the Houses of Parliament on Tuesday 4th, watch this space for pictures….

For more information on National Payroll Week visit the CIPP website.

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Happy New Year

No, I am not running a couple of months late, I am actually a little early. I am talking about the most important ‘new year’ in my calendar, the New Tax Year! 6th April is the big date in all payrollers calendars and impacts every employer. It is the date that can not be selected by the employer, as a financial year can, and all employers and employees have to report income subject to PAYE in line with this date.

So what changes do we have to look out for?
• Personal allowance increasing by £350 from 1150L to 1185L
• 20% tax banding increasing by £1,000
• Minimum Auto Enrolment Pension contributions increasing to 2% for the employer and 3% for the employee
• Living Wage increases to £7.83ph for those 25yrs and over
• All other minimum wage rates also increase £7.38ph 21-24yrs, £5.90ph 18-20yrs, £4.20ph 16-17yrs

So what impact are the changes going to have on the average employee? The average salary in the UK is £28,758, if their salary remains unchanged then they will take home £261.10 less over the course of the year and will cost their employer £189.86 more.

2017-18 2018-19 Difference
Income Tax £3,451.60 £3,381.60 -£70
Employee NI £2,471.28 £2,440.08 -£31.20
Employee Pension £183.12 £545.42 +£362.30
Net Pay £22,652 £22,390.90 -£261.10
Employer NI £2,841.97 £2,806.09 -£35.88
Employer Pension £228.78 £454.52 +£225.74
Employer Cost £31,828.75 £32,018.61 +£189.86

A living wage employee on 40 hours a week contract will be paid £686.40 more gross per year, receiving an extra £399.74 in their pocket, the cost for the employer will increase by £854.07 for the year.

2017-18 2018-19 Difference
Gross Salary £15,600 £16,286.40 +£686.40
Income Tax £820 £887.20 +£67.20
Employee NI £892.32 £943.44 +£51.12
Employee Pension £77.76 £246.10 +£168.34
Net Pay £13,809.92 £14,209.66 +£399.74
Employer NI £1,026.17 £1,084.96 +£58.79
Employer Pension £97.20 £205.08 +£107.88
Employer Cost £16,723.37 £17,576.44 +£853.07

Both examples are calculated on an annualised basis using with a relief at source pension scheme with contributions based on qualifying earnings. Under a relief at source pension scheme the HMRC puts 20 pence into the pension for every 80 pence the employee pays in.

As a reminder don’t forget to send your employees their P60’s for 2017-18 by 31st May and P11D’s by 6th July.

If you have any questions on payroll or pension changes for the new tax year, please give us a call on 01933 409488 for a no obligation conversation.

Andi Herrington is the Director of Payroll Services at Wallis Payroll based in Wellingborough

Originally published in the February edition of All Things Business

Posted by AndiH in Pensions, Tax and NIC, 0 comments

Employee Benefits and how to deal with them

Retaining good quality employees can be difficult, for years larger employers have been doing this by providing their employees with perks, or benefits. Smaller employers are starting to join in and are looking into providing benefits to employees but can be concerned about the extra red tape and have to consider not only the cost of the benefit but the cost of administering that benefit as well.

One of the benefits that is becoming more common with employers who have a smaller number of employees is private medical insurance. There are now a number of providers who cater for or specialise in the Micro and SME market, and many of these offer much more competitive rates than an employee can get independently.

But if you provide your employees with such a benefit isn’t it taxable? Doesn’t that mean that you will have to report it to the tax man on a P11D and won’t the employee get a bill when they do their return? Well Yes, and No it doesn’t have to be.

From the 2016-17 tax year something called ‘Payrolling Benefits’ was introduced. This means that the value of the benefit received can be taxed in real time removing the requirement to report the benefit on each employees P11D, thereby saving your business time and money by not needing the staff to process the P11D’s inhouse or not using your accountant/payroll provider to process these for you. There is still a need to report the total value of the payrolled benefit on the P11D(b) for Class1A NI purposes but this is by far less time consuming than generating multiple P11D’s. The other benefit of payrolling benefits is that employees pay the tax on the benefit while they are receiving it and don’t have to pay a tax bill when they complete their tax return 10 months after the end of the tax year.

If you are interested in Payrolling Benefits then you will need register with HMRC prior to the start of the tax year and speak with your payroll provider. If you miss the registration it does not mean that you are unable to payroll benefits, this just needs to be done informally and a P11D must still be completed. Once you are registered for payrolling a specific benefit with HMRC then this registration carries forward to future years for that benefit. Most payroll software and payroll providers should be able to set you up for payrolling benefits on their applications without any difficulty.

At the present time all benefits can be payrolled with the exception of employer provided living accommodation and interest free / low interest (beneficial) loans. These benefits must still be reported on a P11D.

If you do choose to payroll benefits you do not have to payroll everything that can be payrolled, for example many businesses start with private medical insurance as this impacts the majority of their employees and then move onto company cars in the following year once they are comfortable with the set up, each benefit must be registered for payrolling separately.

If you would like to find out more about payrolling benefits contact Andi Herrington, Director or Payroll Services at Wallis Payroll on andi.herrington@wallispayroll.co.uk or call on 01933 409488.

Originally published in All Things Business April 2018

Posted by AndiH in Benefits & Expenses, 0 comments

HMRC set up new forum for Small Businesses

The HMRC have launched a new online forum and dedicated webchat service for small businesses and the self employed.

The forum is designed to give users quick answers to tax questions as well as help with issues that may arise when starting a business, taking on new employees and completing tax returns.

The Financial Secretary to the Treasury and Paymaster General, Mel Stride, explained that HMRC has launched the service to help businesses “get off the ground and support them as they grow”

If you would like to visit the new forum to see how it can help you have a look here

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All Things Business

An extract of the article about Wallis Payroll in this months All Things Business magazine.

All Things Business spoke with Andi Herrington, Director of Payroll Services at Wallis Payroll about the beginnings of Wallis Payroll, what they provide and why businesses should choose Wallis Payroll for their payroll requirements…

Tell us where Wallis Payroll came from and what services you offer?

Having spent 15 years working as both an employee of a payroll provider and on the other side of the table as a customer, I felt I had experienced both the highs and lows of working with an outsourced payroll partner. With this experience, I felt that I could do a MUCH better job. I set up Wallis Payroll three years ago to provide the same level of payroll expertise to Micro and SME employers as that afforded to large organisations who have an in-house team or use one of the large payroll bureaus who cater for high volume employers.

Along with my business partner, we wanted to do something different, something more personal yet professional where it would feel that we are part of a customer’s team providing payroll processing solutions, giving customers the confidence to manage the growth and development of their business while we manage their payroll.

To read more visit All Things Business

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Advisory Fuel Rates

The HMRC review (and change) the advisory fuel rates every 3 months, these rates apply to vehicles running on Petrol, LPG and Diesel and are to be used for company cars only. Where a car is hybrid it is treated as either petrol or diesel.

HMRC have finally (August 18) published Advisory Electricity Rates for electric cars, this is set at 4 pence per mile. Electricity is not a fuel for car fuel benefit purposes.

For ease we have placed the rates for the 2016-17 tax year to date in one place. You will see that the rates start from March 2016 this is because the rates are not reviewed in line with the tax year or tax periods.

Petrol Advisory Fuel Rates 2016-17 onwards

Dates Covered1400cc or less1401cc to 2000ccOver 2000cc
September - November 1812 pence15 pence22 pence
June - August 1811 pence14 pence22 pence
March - May 1811 pence14 pence22 pence
December 17 - February 1811 pence14 pence21 pence
September - November 1711 pence13 pence21 pence
June - August 1711 pence14 pence21 pence
March - May 1711 pence14 pence22 pence
December 16 - February 1711 pence14 pence21 pence
September - November 1611 pence13 pence20 pence
June - August 1610 pence13 pence20 pence
March - May 1610 pence12 pence19 pence

LPG Advisory Fuel Rates 2016-17 onwards

Dates Covered1400cc or less1401cc to 2000ccOver 2000cc
September - November 187 pence9 pence13 pence
June - August 187 pence9 pence14 pence
March - May 187 pence8 pence13 pence
December 17 - February 187 pence9 pence14 pence
September - November 177 pence8 pence13 pence
June - August 177 pence9 pence14 pence
March - May 177 pence9 pence14 pence
December 16 - February 177 pence9 pence13 pence
September - November 167 pence9 pence13 pence
June - August 167 pence9 pence13 pence
March - May 167 pence8 pence13 pence

Diesel Advisory Fuel Rates 2016-17 onwards

Dates Covered1600cc or less1601cc to 2000ccOver 2000cc
September - November 1810 pence12 pence13 pence
June - August 1810 pence11 pence13 pence
March - May 189 pence11 pence13 pence
December 17 - February 189 pence11 pence13 pence
September - November 179 pence11 pence12 pence
June - August 179 pence11 pence13 pence
March - May 179 pence11 pence13 pence
December 16 - February 179 pence11 pence13 pence
September - November 169 pence11 pence13 pence
June - August 169 pence10 pence12 pence
March - May 168 pence10 pence11 pence

Tables last updated 29th August 2018

Posted by AndiH in Benefits & Expenses, 0 comments

Most Optimistic Self Assessment Expense Claims

In advance of next weeks 31st January the HMRC has released a list of the latest extravagant items which have been claimed as expenses on self assessment tax returns. These examples are all from the 2014-15 returns, we will have to see if those of the 2015-16 tax year can compete.

1. Holiday flights to the Caribbean
2. Luxury watches as Christmas gifts for staff – from a company with no employees
3. International flights for dental treatment ahead of business meetings
4. Pet food for a Shih Tzu ‘guard dog’
5. Armani jeans as protective clothing for a painter and decorator
6. Cost of regular Friday night ‘bonding sessions’ – running into thousands of pounds
7. Underwear – for personal use
8. A garden shed for private use – plus the cost of the space it takes up in the garden
9. Betting slips
10. Caravan rental for the Easter weekend

Needless to say none of these ‘expenses’ were allowable.

The Self Assessment tax return deadline is in just 7 days, there are penalties for not submitting your tax return on time even if there is no tax due.

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Personal Allowance

The personal tax allowance for 2017-18 will be £11,500, for individuals with this tax allowance the code will show as 1150L. Although this is due to be the standard tax code for 2017-18 some individuals will be on a different code depending on their circumstances, have a look at our tax codes article for more information.

For the 2017-18 tax year individuals on the standard tax code will not start paying tax at 40% unless their earnings exceed £45,000, this is the greatest amount someone can earn before paying 40% tax since 2010-11, the last 7 years have seen a decrease in the higher rate threshold in both real and actual terms.

The below table shows the rate bandings from 2010-11 to those for 2017-18, the bandings for future years will be confirmed closer to the time.

2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 Tax Rate
Personal Allowance £6,475 £7,475 £8,105 £9,440 £10,000 £10,600 £11,000 £11,500 0%
Basic Rate Threshold £37,400 £35,000 £34,370 £32,010 £31,865 £31,785 £32,000 £33,500 20%
Higher Rate Threshold £43,875 £42,475 £42,475 £41,450 £41,865 £42,385 £43,000 £45,000 40%
Additional Rate Threshold £150,000 £150,000 £150,000 £150,000 £150,000 £150,000 £150,000 £150,000 45%
Posted by AndiH in Tax and NIC, 0 comments

It’s our Birthday – PROMOTION

We are very pleased to be able to celebrate our 2nd Birthday this September, over the last two years we have grown steadily, welcoming new clients to both our payroll processing and consultancy service.

HappyBirthday

We would like to share our birthday celebrations and are offering two FREE months processing to all new customers who sign up in September and October 2016.  To qualify for this offer please email us at info@wallispayroll.co.uk or complete your details in the contact us form, quoting WPL2.

Posted by AndiH in General, 0 comments