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Is HMRC confusion causing higher compliance costs?


Small businesses have been hit hardest by the introduction of Real Time Information (RTI), auto-enrolment, Employment Allowance and other advice on sector-specific regulation changes. Indeed, the Forum of Private Business estimates that the total cost of compliance now exceeds £19.2bn—a 4% increase on 2013. For small business—those employing fewer than nine employees—this works out at a cost of £164 per employee. It could be argued that part, or even all, of the rise is caused by confusing and conflicting information from HMRC. Take a recent example that Liberty Accounts uncovered, in relation to Employment Allowance. Employment Allowance, available from 6th April 2014, allows employers to reduce the amount of National Insurance Contributions they pay for their employees by up to £2,000. The question arose as to whether, if you hadn’t advised HMRC that the employee was eligible to claim the allowance, you could retrospectively claim. One might imagine that the answer should be straightforward. That is unless if you’ve used the HMRC website before. If you have, you will know that finding the right information can be both tricky and time-consuming. What you will eventually find is: Claiming Employment Allowance: further employer guidance On page 2 it states: The amount of allowance you can claim for each payment period must be the same as your employer Class 1 NICs liability for the same period—subject to the £2,000 Employment Allowance annual maximum. Yet on page 4 of the same document it states: You start claiming the allowance on 31 July (August will be the first month you can use the allowance against your employer Class 1 NICs liability). If your claim had started at the beginning of the tax year 6 April (rather than July) your claim to date would be £1,500 (the total allowance that you could claim for May, June and July). It seems that on the one hand HMRC is saying the allowance must be the same as the liability for the period, which would indicate that you can’t make retrospective claims, but then contradicts itself in the same document. Indeed, if you read further down on page 4, you will see that not only can you make retrospective claims in the same PAYE year but you can in fact make a claim up to four years (from the tax year 2014 to 2015 only) after the end of the tax year in which the allowance applies. As HMRC puts more and more pressure on businesses (and software suppliers) to comply with new legislation shouldn’t it avoid confusing and conflicting information? Help us to help you HMRC!


From: blog

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Liberty Accounts provides a simple and efficient process by which you can manage associations between transactions. In this video we demonstrate how you can easily see and manage allocations including the de-allocation of an invoice to a customer payment and the simple correction.


From: bookkeeping-

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Automatic enrolment


The law on workplace pensions has now changed and every employer must comply with automatic enrolment. If employers fail to comply with their required duties enforcement action may be taken and issue a notice and/or a penalty. The Government, in an effort to encourage more people to save for their retirement, has introduced a requirement for employers to automatically enrol most of their workforce into a pension scheme. Otherwise referred to as auto-enrolment or AE, automatic enrolment will usually require both the employer and the employee to pay contributions into the scheme. Does auto-enrolment apply to you? If you are an employer with employees in the UK then yes. When do you have to do it? Your start date, which is known as your staging date, depends on the number of employees that were on your PAYE Scheme as at 1 April 2012. The Pensions Regulator will write to alert you twelve months and three months before you are due to start but you can also check you date by visiting their website and use the ‘Find out your staging date’ tool. Below are the suggested staging dates ranges for employers with a PAYE Scheme of 250 or less employees. PAYE scheme size      Date 50 - 249                      1 April 2014 - 1 April 2015 (inclusive) 30 - 49                        1 Aug 2014 - 1 October 2015 (inclusive) Fewer than 30             1 Jan 2016 - 1 April 2017 (inclusive) There is an option to postpone automatic enrolment for up to three months from your staging date. Further information can be found on Pension Regulator’s postponement webpage. Who should be in a pension scheme? The basic criteria are that you must automatically enrol all employees that are: •    aged 22 to state pension age •    working in the UK •    earning over £10,000 a year. Where certain employees don’t meet the above criteria there is still the option for them to opt-in and you must pay a contribution but there is another group where contributions from you will not be required. For further information refer to Knowing your Workforce. What else do you need to do? Each employee should be written to individually telling them how they’ve personally been affected by automatic enrolment. The information may vary depending on their rights and the duties you have for them. The regulator must also be provided certain information on how you’ve complied with your duties. Find out more about reporting and regulatory duties. Where do you start? After finding your staging date you will be able to make your plan. You’ll need to make some changes to allow for automatic enrolment, such as: •    setting up a pension scheme or modifying an existing one •    making any necessary changes in Liberty Accounts and other software to manage the new requirements (see Liberty Accounts help on Pension Schemes) •    monitor the ages and earnings of your staff •    writing to your staff. The Pensions Regulator have a tool to help you make you plan – Create your plan. What costs are involved? Your compulsory employer contributions are the main costs associated with the pension scheme. You’ll have to pay a minimum employer contribution for everyone you automatically enrol and anyone who opts-in. The minimum amount is being phased in, starting at 1% and rising to 3% of staff’s qualifying earnings - for more information go to contributions and funding. Whilst other costs will vary depending on your provider and the scheme you choose. You can use the Pensions Regulator’s calculator to work out your minimum employer contribution for an employee. Nominated contacts You must provide contact details for the most senior individual in your business, e.g. CEO/Managing Director, who will be the primary contact. A secondary contact, e.g. HR Manager/Pension Manager, may also be nominated. Automatic enrolment registration Registration is the legal requirement to submit information to the regulator about how you’ve complied with your employer duties. You can do this by providing details to the Pensions Regulator online. If you don’t do it in time, you could be fined. Automatic enrolment registration is a secure, online service accessed through the Government Gateway – Start Registration Now.


From: business

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