Please note that throughout each month we publish important news via our Walker Thompson blog : http://blog.walkerthompson.co.uk. We would recommend that you follow our blog in order to keep up to date with the latest news.
From April 2012, businesses (with very few exceptions) will have to file their VAT Returns online and pay their liability electronically. If you are not already online, now is the time to set it up.
HMRC strongly recommends you sign up to using the online service before April 2012, so that you have time to get familiar with the new service. It has also proved useful to set up online filing, and the associated direct debit mandate, some time before the first return needs to be submitted, to avoid delays in either the submission or payment of your first return.
When you submit your VAT Returns online, you must also pay any VAT due electronically. Paying electronically will normally give you to up to seven extra calendar days to submit your return and pay your VAT, unless you make annual returns or payments on account. The extended due date will be shown on your online return and you must ensure that cleared funds reach HMRC's bank account by this date. If your payment clears later than this, you may be liable to a surcharge for late payment.
Internet link: Moving to online filing
The Information Commissioner’s Office (ICO) has published guidelines on the business use and storage of cookies.
Following an EU Directive, businesses are now obliged by law to obtain the explicit consent of each of their websites' visitors before storing any data on their device. Websites must also provide 'clear and comprehensive information' about the purposes of the storage.
The UK actually introduced the amendments on 25 May 2011 through The Privacy and Electronic Communications Regulations 2011. However, website owners have been given until May 2012 to make their websites compliant with the new legislation.
It remains to be seen how strictly this law will be enforced, but the ICO have already introduced a maximum penalty of £500,000.
Internet link: ICO cookie guide
PENSIONS AUTO ENROLMENT DATES DEFERRED FOR SMALLER EMPLOYERS
The timetable for the introduction of Pensions Auto Enrolment has been revised for smaller employers.
Employers have been aware for some time now that the government is to introduce legislation designed to encourage more people to save for their retirement.
Under the rules employers must:
- ‘auto-enrol’ eligible employees into a pension scheme
- make employer pension contributions for them, and
- make deductions of employee pension contributions from the employees pay.
The rules come into force from October 2012. However they only impact on the largest employers from that date, as few employers have a workforce of more than 120,000. For those employers with a more modest number of employees the start dates have been amended. This was previously announced and has been confirmed in a written ministerial statement.
Steve Webb, the Minister of State, Department for Work and Pensions confirmed:
‘On 28th November 2011, the Government announced that the timetable for the implementation of automatic enrolment will be adjusted so that small businesses are not affected by the reforms during this Parliament. This will provide them with some additional breathing space to prepare for the reforms whilst operating in tough economic times.’
‘I can now confirm that under the revised timeline, all employers with an existing staging date of on or before 1st February 2014 are unaffected. This means that no large employer will have to make any changes to their plans – which are in many cases already advanced.’
Medium sized employers will be re-allocated automatic enrolment dates between 1st April 2014 and 1st April 2015. This means that the implementation dates of some of these employers will be up to nine months later. However, this still means that around 70% of eligible workers will be automatically enrolled before the end of this Parliament compared with around 75% under previous arrangements.’
‘Small employers will be allocated automatic enrolment dates between 1st June 2015 and 1st April 2017.’
The guidance contains a table of revised implementation dates for small and medium employers, by size. We will keep you informed of further announcements.
More information on employers’ obligations is available on the Pensions Regulator website or please do contact us.
Internet links: Pensions Regulator website Statement
NEW APPROACH TO RECORDS CHECKS FROM HMRC
HMRC have announced that they intend to make changes to their business records checks programme following a review of the pilot scheme.
HMRC will now postpone making any new business records check appointments until the revamped approach is launched early in 2012/13. The delay is to allow further consultation with representative bodies on the implementation of the recommendations in the review and on some details of the new approach.
HMRC’s Director of Local Compliance, Richard Summersgill, said:
‘Four out of ten businesses had an issue with their business records, and of those that required a follow-up visit, we found that some 90% subsequently improved their record-keeping.’
‘However, after reviewing the pilot programme and listening to the views of businesses and representative bodies, we acknowledge the need for a fresh approach to business records checks.’
Internet link: News Release
A new guide ‘Get Paid!’ has been published. The guide which is aimed at smaller businesses contains tips and advice from both suppliers and customers. The guide covers advice on invoicing and developing a robust credit policy.
The government is asking businesses and public organisations to pay suppliers on time and for small businesses to pursue those who put them at risk by delaying payment.
Prompt payment is vital for SMEs, with many businesses not able to survive the cashflow problems that late payments create.
The government is encouraging SMEs to:
- proactively agree payment terms before delivering orders.
- sign up to the government’s Prompt Payment Code, run by the Institute for Credit Management
- raise complaints over late payment from Code signatories and use legislation already in place to help companies pursue late payers
- use electronic invoicing where possible.
Internet links: BIS press release Get Paid guide
HMRC have announced that they will turn their attention to those involved in home improvement trades and direct selling (online market sellers) in their next round of Tax Catch Up Plans.
HMRC have previously offered Tax Catch Up Plans to Plumbers, Dentists and Tutors amongst others. According to the press release their latest campaigns will target:
‘Missing returns. This will contribute to wider HMRC activity tackling failure to complete tax returns. It will initially focus on those who fail to complete tax returns and who are liable to pay tax at the highest rates.’
‘Home improvement trades. This will build on campaigns aimed at plumbers and electricians, and will include several 100,000 tradespeople in construction and building work such as roofing, window fitting, bricklaying, carpentry and joinery.’
‘Direct selling. This will target customers who ought to be paying tax on income they earn from buying and selling goods direct to others, or from the commission on these sales.’
‘As with previous campaigns, the focus of the new campaigns will be on providing those in the selected groups, who may not be paying the tax they owe, a chance to put their affairs in order on the best possible terms.’
HMRC have announced that they will be using new technology to identify traders in both sectors with unpaid taxes.
Marian Wilson of HMRC said:
‘We are offering all the people targeted the opportunity to come forward. Penalties will be higher if we come and find people after the opportunity.’
Please do get in touch if you have any concerns in these areas.
Internet links: News release HMRC website
HMRC have launched a new online video to help employers reduce the problems caused by inaccurate employee data.
Every year HMRC receive thousands of employer returns which contain the details of millions of employees, including their names, dates of birth and National Insurance numbers. HMRC are keen to point out that whilst the vast majority of the employee data is correct, in some cases dummy, incomplete or incorrect information is included. According to the press release:
‘…a recent study of employer returns found that 128 staff were entered as Mr, Ms or Mrs Dummy, while 824 employees had the surname ‘Unknown’.’
‘Another 40 employees, according to their dates of birth, were aged over 200.’
The short YouTube video discusses how inaccurate employer returns can affect employees, employers and HMRC and offers advice on how employers can help reduce errors.
Jim Harra, HMRC’s Director of Customer Operations, said:
‘It’s really important that employers get their employees’ information right, so that HMRC can match it to the right tax records. Otherwise, it can lead to more contact from staff, trying to sort out their tax, and from HMRC, trying to sort out the data issues.’
‘So, if you’ve got a spare few minutes, watch the video and see what you can do to help your organisation get things right, for you, your employees and HMRC.’
If you would like any help with payroll issues please do get in touch.
Internet links: Press release Video
SELF ASSESSMENT STATISTICS
According to HMRC a record 9.45 million self assessment tax returns were filed on time this year and a record 7.65 million (80.9% of them) were filed online.
Although the 31 January 2012 deadline was unchanged, HMRC announced that no penalties would be issued for online returns received by midnight on 2 February, due to industrial action at HMRC contact centres.
The busiest day for online returns was 31 January, when HMRC received nearly 445,000 returns. Apparently the ‘rush hour’ occurred between 4pm and 5pm on 31 January, when 37,460 returns (more than one every 6 seconds) were received by HMRC.
David Gauke, Exchequer Secretary to the Treasury, said:
‘I’m delighted so many people filed their tax returns online this year. The record number proves that it’s quick, easy and secure to do.’
‘HMRC have always been clear that they want returns not penalties, so it is good news that over 90% of all returns were submitted on time.’
If you have not yet completed your self assessment tax return and would like some help please do get in touch.
Internet link: Press release
The CBI is calling for a Budget to help businesses. To read more information on the CBI’s recommendations visit the link below.
‘The CBI called on the Chancellor to use his March Budget to score the growth and investment policy goals he put forward in his Autumn Statement and give the UK economy and jobs a real boost.’
‘In its submission to the 2012 Budget, the CBI also urged changes to the UK tax system which it believes could help persuade businesses to invest in the UK and further stimulate growth.’
The Chancellor will present his Budget on Wednesday 21 March 2012. We will update you with significant announcements.
Internet link: CBI
HMRC have confirmed in the latest Employer Bulletin that they intend to impose penalties on all employers who fail to send their payroll starter and leaver forms online from April 2012.
During the 2011/12 tax year HMRC issued penalty notices to employers with 50 or more employees when they submitted more than two paper forms in a quarter. The penalties issued ranged from £100 to £3000 depending on the number of paper forms received in the quarter.
Since April 2011 small employers (with 50 or less employees) have been required to file their in year starter (P46) and leaver (P45) forms online. However, small employers who submitted paper forms between 6 April 2011 and 5 January 2012 were only issued with warning letters. This action was taken to try and help small employers to get this right.
From 6 April 2012 penalties will be issued when the employer fails to file their starter and leaver forms online in the period 6 January 2012 to 5 April 2012 and onwards.
If you would like any help with payroll issues please do get in touch.
Internet link: Employer Bulletin