Whether the issue is increased compliance activity from HMRC or a desire to incentivise employees, there is a real benefit in getting specialist advice.
Larking Gowen provide this in all its forms whether, on the one hand, it relates to complex benefit issues, the implementation of share schemes or wider remuneration planning or on the other; supporting you through an HMRC compliance visit, or managing your payroll and auto-enrolment requirements.
Our team has a breadth of knowledge and experience gained both in the profession and HMRC and to complement the services we offer, will keep you in touch with recent developments through our regular payroll bulletins and technical updates.
The below represents just some of the services we offer and have experience in and is by no means exhaustive. If these have identified a need either to look at a few items or a need for a wider review please do not hesitate to email us on firstname.lastname@example.org
Employment status and IR35
Employment status is a significant area of focus for HMRC, enhanced by their setting up of a new specialist team to conduct reviews.
The tax and NIC at stake, should HMRC successfully challenge someone’s self employed status, can be substantial and it’s the engager who is primarily liable. For this reason, it is important to ensure that existing arrangements are robust and that there is an effective and tax compliant policy to manage the structure of any new engagements.
Larking Gowen are skilled in this area.
Of course, not all contractors provide their services directly. Many use their own company (a so called personal service company or PSC for short) to do so. That may make sense, as it can be tax effective for the contractor whilst removing the risk of PAYE and NIC from the engager but it does still leave the contractor with the so called IR35 provisions to consider.
IR35 is relevant to contractors supplying their services to clients via an intermediary, such as a limited company, but who, had its existence been ignored, would have been seen to have been acting as an employee of the engager. If you are a contractor and your company falls within this legislation it creates additional obligations for you and your company including the need to account for PAYE and NIC. If therefore, it’s not correctly applied it can be costly to rectify.
Note also that from 6 April 2017 there is additional legislation to be considered where the engager is a public body (widely defined). Besides putting an obligation on the public body to consider the nature of the contract and determine whether IR35 applies, if it then decides that it does, it also now has to account for the associated PAYE and NIC. We think that for some, the complexities around this, combined with other recent changes in the IR35 provisions could affect the ongoing attractiveness of the PSC model.
Given these complexities, again it’s an area worth taking advice on.
The Apprenticeship Levy is a new government initiative to boost productivity by encouraging employers to invest in new apprenticeships.
From April 2017 employers will be charged a levy equal to 0.5% of their gross payroll (i.e. the amount liable to class 1 NIC) and this will be reported through RTI and payable at the same time as the PAYE and NIC.
Most employers will be entitled to an allowance of £15,000 to offset some or all of these costs. This means that most employers with an annual wage bill of less than £3 million, are unlikely to be liable for any additional payments.
Connected employers, e.g. group companies, are only entitled to one £15,000 allowance between them. This can be split between the employers as they see fit, however this allocation must be completed by the start of the tax year and reported on the first tax return; it cannot be apportioned retrospectively.
Employers who pay the Apprenticeship Levy will have access to funding through the new Digital Apprenticeship Service (DAS) and will be able to spend the fund on approved training. Group companies will be able to collect their funds together into one digital account.
The final details of the Apprenticeship Levy have not yet been released as HMRC were consulting on some aspects until 3 February 2017.
Check whether you can claim this allowance worth up to £3,000 a year off your Class 1 National Insurance bill if you’re an employer.
You can claim the allowance if you’re a business or charity and you can also claim if you employ a care or support worker.
However, if you have more than one employer PAYE reference, you can only claim Employment Allowance against one of them and likewise, if you are part of a group only one employer can claim the allowance.
There are special rules if you are subject to IR35, a sole director or if you work in the public sector so do get in touch to discuss your eligibility.
This is an attractive arrangement particularly when married to the provision of tax exempt or tax favoured benefits, producing savings for employer and employees alike.
The introduction of auto-enrolment has increased the interest in planning opportunities relating to pension payments and we regularly advise on arrangements in relation to this, the cycle to work scheme and child care vouchers amongst other things.
If however you operate, or plan to operate, a salary sacrifice arrangement, bear in mind that legislative changes mean that in relation to some arrangements (but not those relating to pensions, childcare, cycle to work or ultra low emissions vehicles) the tax and NIC benefits will start to disappear from 6 April 2017.
Year end reporting
We regularly assist clients with the completion of annual forms P11D, PAYE settlement agreements and employment related securities returns.
Reporting obligations can be onerous and not always clear to understand, however Larking Gowen can guide you through these or even undertake them on your behalf whilst at the same time pointing you in the direction of potential simplifications. Feel free to get in touch should you like some assistance.
Our dedicated payroll team can help with all your payroll needs. Using software which is fully compliant with HMRC’s real time information (RTI) system, our large team allows us to offer a flexible service irrespective of whether you employ 1 or 401 employees.
The phased introduction of auto-enrolment (AE) - putting workers into qualifying workplace pension schemes – is well underway with those employers with early staging dates, nearing re-enrolment.
Having helped over 140 existing and new clients to date, our team is happy to assist you in fulfilling your initial and ongoing AE obligations.
Please contact one of our specialist team to discuss your payroll needs or download our auto-enrolment brochure which includes useful information on the process.