Was this George Osborne’s last Budget?

Budget

This years Budget was pretty Political – which is no great surprise given the forthcoming general election in May. There can be little doubt that a number of the chancellor’s measure were designed to attract voters. Non-pension savers, for example, were offered a new personal savings allowance, which is worth up to £200 a year and are to be given more flexibility and investment options for their ISAs after the election. The Budget is also likely to be good news for existing pension annuity owners, who are to be allowed to sell their income in return for a lump sum.

House prices and the difficulties of getting onto the property ladder are rarely out of the news these days and the Chancellor has proposed to give those who aspire to own their own home a helping hand – a new Help to Buy ISA. This scheme, due to start in August 2015, will see the government provide a £50 bonus for every £200 of monthly savings deposited in this ISA, up to a maximum of £3,000 on £12,000 of savings.

Unfortunately, the Budget’s can’t all be good news for everyone. Those who have not yet retired received a bit of a blow in the form of a further reduction in the lifetime allowance, which the Chancellor has cut down to £1 million – a measure proposed by the Shadow Chancellor in February.

So, we heard lots of interesting announcements in this Budget but Whether these proposals become legislation very much depends on the outcome of the election.

Article by Taxwise.

HMRC Payroll Changes – Are You Ready For RTI?

From 1st April HMRC will be introducing a new system for the way they collect payroll information. It will be mandatory for all employers to process PAYE data using the new system.

Real Time Information, or RTI, is a new system that’s being introduced by HMRC to improve the operation of Pay as You Earn (PAYE). PAYE information will be collected more regularly and more efficiently when employers submit their regular payroll submissions. It’s one of the biggest changes to PAYE since it was introduced in 1944, and will ensure PAYE keeps pace with modern working patterns.

Payroll is changing

Payroll is changing

Under the HMRC RTI system, employers would be required to send data about salaries, PAYE, NIC and student loans every month whilst continuing to produce end of year employee returns.

At O&K Accountants in Croydon we are starting to prepare for this change so that it will be seamless and smooth for our clients.

So what are the key questions about the new arrangements?

Is RTI mandatory?
Yes RTI will become mandatory for all other employers, without exception, from April 2013 through to October 2013.

The Department of Work and Pensions is driving the deadline of October 2013 because RTI will have to be used employers by this date to support the introduction of the Governments ‘Universal Credits’.

“How often will my company have to send information about Payroll to HMRC?”
Instead of sending information once a year at the payroll year end, the information will be submitted electronically to HMRC for PAYE, NIC and student loans etc. every month.

HMRC state that over 80% of data quality problems are caused by holding incorrect information about an employee’s name, date of birth or National Insurance number.

Under PAYE Real Time Information, the information that is submitted to HMRC every month is matched against records HMRC store on their National Insurance and PAYE Service (NPS).

If the records submitted don’t match, it may trigger the creation of duplicate or inaccurate records which may result in incorrect tax calculations or HMRC compliance checks.

In addition to the monthly reporting the annual P60s will still be required.

At O&K accountants in Croydon we offer a full Payroll service and therefore can help, and offer practical advice, regarding these new arrangements.

“How will these new Payroll arrangements affect you business?”
Initially there will be extra administration for your business, there’s no doubt, this may result in some extra costs. You will also need to check that the software you use for Payroll can submit RTI data. If you don’t use software at the moment, perhaps it’s now time to start?

On the upside your year-end process of submitting P14s for all your employees and a P35 summary and employer declaration will no longer be required.

You will still have to issue P60s to employees and pension recipients following the end of each tax year.  Benefits in kind are not included under RTI so employers will still be required to submit forms P9D, P11D and P11D(b) if applicable, following the end of each tax year

Employers will still retain new starter forms P45 and P46, but you will not be required to send them to HMRC.The way in which tax and NICs are calculated remains the same, as do the regular payments to HMRC.

“How much will these changes cost my business?”
Well if you do nothing then you will certainly get into bother with HMRC, with the possibility of being fined .

There will be the inevitable monthly costs of administrating these new arrangements, so that HMRC have a more frequent and up to date position with regards to whom you are paying, by how much and how often.

“Will I need new Payroll software”
If you operate your Payroll manually, then the obvious answer is yes.
If you do not use Payroll software now is the time to make a start. It will save you and your business time and money in the long run, particularly with the new RTI changes.

“What do I need to do now?”
If you use payroll software, you will need to ensure it can submit RTI data. Check with your software supplier or call us on  for advice.

If you don’t use software it would be a great idea to start planning now to get a system that will be able to submit data RTI electronically when you have to.

It will save you time and probably money in the future.

Another important task, under RTI, is Employer Alignment Submission (EAS) i.e. the alignment of your employees details with the data held on HMRC’s NPS system.  If you have incorrect information about your employees then ‘matching’ payments to RTI, submissions will become erroneous with employees potentially paying the penalty. It’s really important that all data held you’re your payroll system is cleansed,

“What are the penalties for non-compliance?”
Whilst information is not yet available from HMRC surrounding penalties for late or non-submissions each month they have indicated that there will be monthly penalties.

Here at O&K Accountants we want to ensure that none of our clients are faced with the penalties. We will therefore be submitting the necessary returns on our clients’ behalf.

So if you feel you need help with the changes to Payroll then Owadally and King in Croydon are here to help you.

Contact us at info@oandk.co.uk , call 020 8686 7756 or go to our website www.oandk.co.uk and we can make sure you have no hassle from these mandatory changes.