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Payroll

What is reportable on a P11D

  • Assets transferred to an employee – this could cover things like computers, televisions, furniture etc
  • Assets available to an employee at their home such as television, computer, broadband. They don’t have to be reported if solely for business use or personal use is insignificant.  Mobile phones are now exempt
  • Pecuniary payments which would include paying personal bills, rent, parking fines for their own cars, speeding fines for all cars and payment of professional subscriptions unless the professional body is on HMRC’s list of approved bodies
  • Mileage – can claim 45p for up to 10,000 miles, over that should claim 25p. Anything over that should be reported.
  • Company cars – only exemption are pooled cars which must be available to all employees and stay on the premises at night
  • Fuel – The most straightforward way of dealing with fuel is to pay for it personally and claim it back under the advisory fuel rate. Fuel cards are reportable with the employee then claiming the business part back.  Alternatively you could be given a car allowance through the payroll and be taxed at source.
  • Vans – Only reportable if there is unlimited private use and fuel. Normal commuting is acceptable
  • Beneficial loans – these include season ticket loans, credit cards and overdrawn director’s loan accounts. The overdrawn director’s loan account is reportable on a P11D in the year it occurs if it over £10k and still outstanding 9 months and one day after year end unless interest is paid at the official rate for every day outstanding.
  • Private medical insurance
  • Various expenses – Entertaining is a bit of a mine field. A birthday present would be deemed to be a “trivial expense” (ie under £50 on any one occasion), the annual Christmas party is OK up to £150 per head as long as everybody is invited but going to Costa for an appraisal is reportable.  The rules around subsistence are £5 for breakfast if you leave home before 6am, £5 for a meal if at least 5 hours on business, £10 for 2 meals for 10 hours on business and a late meal rate of £15 for finishing work after 8pm.  The cost must have actually been incurred.  These are only available for staff whose working patterns do not usually fall this way.  There is a maximum of 3 meals per 24 hours and you can no longer stay with family and friends and still claim the allowance.
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Payroll service

We can run your payroll for you and save you the worry of meeting HMRC’s strict compliance rules and missing important deadlines. When we run your payroll, whether it is weekly, monthly or 4 weekly we will email you the following documents;

  • Payslips either to you or direct to your employees
  • Payroll journal showing all deductions and additions,
  • Information regarding PAYE payable for that period and details of where to pay it
  • Any pension payments for that period

Our fees for payroll from April 2019 are as follows;

Employees and new scheme

  • To set up a payroll scheme £50 + VAT
  • To run a new payroll scheme for up to 2 employees £10 + VAT a month
  • To run a payroll scheme for up to 4 employees £20 + VAT a month
  • To run a payroll scheme for up to 4 employees with pension administration £40 + VAT a month
  • For payroll schemes with over 4 employees – details on request
  • For a new employee £50 + VAT
  • For a leaver £50 + VAT
  • For a mid-year start £50 + VAT
  • To close a scheme £50 + VAT
  • To opt a company out of auto enrolment £50 + VAT
  • P11D £75 + VAT
  • Year end £50 + VAT

 

Auto-enrolment for setting up new scheme

  • For 1 or 2 directors £100 + VAT
  • Between 3 and 10 people £250 + VAT
  • 10 or more people £500 + VAT
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Childcare Vouchers and Tax- Free Childcare

Childcare voucher schemes allow an employee to receive childcare vouchers in lieu of up to £55 per week of their wages and no tax or national insurance will be paid on this.  However, this scheme was closed to new applicants with effect from 4th October 2018 (although the scheme continues to run for successful applicants prior to that date, provided certain conditions are met).

The government has introduced a new childcare scheme, called Tax-Free Childcare.   This could provide up to £500 every 3 months, up to £2000 per year, to help with childcare costs for each child.  The funds must be used for approved childcare.  Therefore, the childcare provider must be signed up to the scheme.

To qualify for Tax-Free Childcare, the claimant and partner must be in work for 16 hours a week. Single claimants may also apply. It is possible to claim if on sick leave, annual leave or parental leave (although it is not possible to claim for the child for whom the parental leave is being taken).   If the claimant is not working but the partner is, then it may still be possible to qualify if in receipt of certain benefits or allowances.

Child(ren) are eligible up to 1st September following their 11th birthday.  Adopted children are also eligible, but foster children are not.  If a child is disabled, then it may be possible to qualify for Tax-Free Childcare for longer.

It is possible to receive Tax-Fee Childcare at the same time as receiving 30 hours free childcare if eligible for both.  However, it is not possible to receive Tax- Free Childcare at the same time as receiving Working Tax Credit, Child Tax Credit, Universal Credit or childcare vouchers (if already in receipt of childcare vouchers prior to 4th October 2018).

The HMRC website has a “childcare calculator” link, designed to help work out whether Tax – Free Childcare is the best option, as opposed to other benefits.  It is also possible to apply online for Tax – Free Childcare, again through the HMRC website.

Please contact Tracy if you would like any further information on this.

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Employment matters

Taking on employees can be a real headache and the legislation can be a mine field.  Have your employees all got up to date contracts?  Do you need some help and support?  Get in touch with us and we can introduce you to some of our excellent contacts.

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Payroll headache?

Outsourcing your payroll can save you time and money and will ensure you are compliant with all legislation

 

All data must now be submitted to HMRC before or on each payday and in real time. Failure to do so can result in fines. By outsourcing your payroll to Harmonea you can be sure that all your data is submitted to HMRC as and when required.

 

Our aim is to provide professional, accurate and timely payroll support. We tailor our product to match each client’s individual needs and ensure you will never miss a PAYE deadline again.Facebooktwitterredditlinkedinmail

Does Auto Enrolment apply to you?

Is your staging date fast approaching and you have done nothing about it?

Automatic Enrolment applies to all employers who have at least one member of staff.  It doesn’t just apply to businesses – if you employ anyone to work for you like a cleaner or nanny for example, that makes you an employer and you will need to ensure that any eligible employees are enrolled into the workplace pension.

Setting up for Auto Enrolment doesn’t have to be costly and it pays to start planning as early as possible.  This gives employers time to research and shop around and helps avoid the risk of a £400 fine.  Recent research shows that most small and micro employers who have already met their pension duties recognise the importance of workplace pensions and think it is a good opportunity for their staff.

Not sure if you are an employer?

If you deduct tax and National Insurance from an employee, this usually makes you an employer. If you use an agency and the agency deducts the PAYE, this makes the agency the employer and you don’t need to do anything.

 

Not sure if your staff are “eligible”

If your staff are aged between 22 and State pension age and are earning more than £10k per annum, they are eligible and must be enrolled in to a scheme even if they chose to opt out later.  If your staff are younger or older or earning less than that they can still chose to join and you, as their employer may or may not have to contribute depending on the circumstances.

 

Your Business only has directors and no other staff?

You may be exempt from Auto Enrolment but you need to check.  If you are exempt you will need to tell the pensions regulator and give the reason why.

 

Already have a pension scheme you would like to use?

You need to check that it meets all the necessary conditions that will make it a “qualifying scheme” for Auto enrolment.  Contact your pension provider to find out.

 

Your staff earnings all full under the threshold?

You still have legal duties to meet.  For example, you will need to tell your staff about Auto Enrolment and complete and submit a declaration of compliance to the Pension Regulator to let them know what you have done to meet your duties

 

Do you need a pension scheme but don’t know where to start?

Not all schemes offer the same level of service and some charge more than others, so you should look at different schemes before you decide which is suitable for you and your staff.  The Pension Regulator has information on its website which can help you chose a Pension scheme with a list of providers who can offer pensions to small employers

 

What happens if you don’t complete the declaration of compliance on time?

Don’t leave your preparations to the last minute.  You will need to supply details of your pension scheme and the staff enrolled five months after you staging date.Facebooktwitterredditlinkedinmail

Construction Industry Scheme

Construction-SchemeWhat is the construction industry scheme?

Construction Industry Scheme (Often shortened to CIS) is a scheme put in place by HMRC in 2007 where contractors deduct a percentage of money from a subcontractors payments which is then passed on to HMRC.

The scheme only requires contractors to register however subcontractors are advised to register as unregistered subcontractors have a higher rate deducted from their payments.

 

Why should a Subcontractor register with the scheme?

Subcontractors are advised to register with the scheme to reduce the rate of deduction from their payments. Unregistered subcontractors must have 30% deducted from their payments whereas once registered, this is reduced to 20% deducted. Please note the contractor is liable for any errors within the deductions made and ensuring the subcontractor is verified.

 

How do I know if I am a contractor or subcontractor?

You are a contractor if you pay subcontractors for construction work and/or your business doesn’t do construction work but you spend an average of £1 million or more a year on construction within any 3 month period.

You are a subcontractor if you complete or aid completion of any construction work for a contractor.

 

How are the CIS Returns submitted?

All contractors must submit a monthly return to HMRC by 19th of each month. This return can only be submitted online via the HMRC website. If the return is nil this still needs to be submitted however this can be submitted on the phone.

When submitting the monthly return contractors must make sure throughout the month they have deducted the correct rate from their subcontractors. These subcontractors can be verify online where you will need their Unique Tax Reference (UTR), Trading Name, National Insurance Number (if they are a sole trader) OR Company Registration Number (if they are a limited company).

 

What if I miss the submission date?

If a CIS return is submitted late HMRC will issue a penalty depending on how late it is.

For any returns submitted later than this an additional penalty can be issued of £3000 or 100% of the CIS deductions on the return, whichever is higher.

 

When and how does a contractor pay this?

Once the monthly return is submitted by the contractor, the total of the deducted amounts must be paid to HMRC by 22nd of the SAME month (by 19th if you’re paying by post). This can be paid by any of the below.

  • Direct Debit
  • CHAPS
  • Online or Telephone Banking
  • Online Card Payment
  • BACS
  • Post
  • Cheque

 

What if subcontractors pay too much?

Contractors throughout the year must provide each subcontractor with a Payment and Deduction Statement. This statement should show a breakdown of what was submitted on the monthly return.

Sole Trader

  • If the subcontractor is a sole trader the CIS deductions are recorded on their Self-Assessment Tax Return.
  • HMRC will then work out your Tax and National Insurance bill for the year taking off any deductions suffered.
  • If tax is still owed then you must pay this by 31st If an overpayment has been made a refund will be issued by HMRC.

Limited Company

  • If the subcontractor is a limited company you will need to submit your monthly Full Payment Submission (FPS) as usual.
  • The subcontractor will then need to send in an Employer Payment Submission (EPS) at the end of the tax year showing all deductions suffered throughout the year.
  • HMRC will take the deductions off what you owe in PAYE and National Insurance

 

If you have any queries regarding this please feel free to contact us.

 

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