Posts Tagged ‘hmrc’

Wages rising faster than inflation

Wednesday, April 16th, 2014

There’s more good news for the British economy as wages are increasing at a higher rate than that of inflation, for the first time in six years.

It was announced yesterday (15th April 2014) that inflation had fallen for the sixth consecutive month to 1.6 per cent. Meanwhile pay is increasing across the private and public sector.

The ONS reports average earnings rose 1.7 per cent in the three months to February compared with a year earlier, up from 1.4 per cent last month.

Unemployment is also falling. Figures suggest only 6.9 per cent of the workforce is out of work, the lowest figure since February 2009.

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The worst excuses for not paying minimum wage

Friday, March 21st, 2014

Minimum wage exists for a good reason – it’s the baseline rate that all employers are required to pay their staff, and as such, at least in theory, it guarantees a certain standard of living for the working people of Britain.

But in some cases, the wage is simply not being paid – and part of HMRC’s remit is to enforce the standard.

The public body recently released some of the worst excuses they have been given by employers who fail to pay the full amount. We can presume that they have done this in order to demonstrate to businesses that there exists no good reason to deny workers a fair, living wage – and we are doing our bit to spread this information by sharing some of those excuses here.

  • An employer gave this excuse: ‘When the national minimum wage goes up I do increase the amount I pay a little, even if the total pay is still below. I don’t think its right to ignore the rises.’ This person may not have ignored the law outright, but neither did he make much effort to follow it.
  • ‘I don’t think my workers know anything about the national minimum wage because they don’t speak English.’ Rights are of course granted even to those who don’t know they exist.
  • In the same vein: ‘It wasn’t a conscious decision to say “I’m not going to pay this,” but I’ve never really considered doing it because I’ve not had people come to me and say, “I’m not getting paid enough” or, “Is this the minimum wage?”‘ Workers may not know their rights, or they may simply fear losing their jobs if they cause a fuss. The law does not apply only to those who have the clout to ask for a raise.
  • Another employer told HMRC: ‘I know I am paying them too little, but they are happy to work for this amount because they are getting experience.’ Workers must be paid the minimum wage except in select circumstances, for example, as part of a formal course of education.

‘Most employers are honest and pay their staff the correct rate,’ said Jennie Granger, director general of enforcement and compliance at HMRC. ‘But this research shows that some still view the national minimum wage as a choice and will even try these crazy excuses to avoid paying workers what they are due.’

Last year, HMRC forced back-pay of £4 mn to workers who had not received their wages in full. The minimum wage is currently £6.31 an hour for those over 21.

ACCA calls for extension of tax return deadline

Thursday, January 30th, 2014

The Association of Chartered Certified Accountants has called for the deadline for filing a self-assessment tax return to be delayed, due to a number of new measures that have been introduced since last year.

HMRC requires all returns to be filed tomorrow at the latest – but ACCA makes the case that the government should make special allowances this year.

The government is requiring many people claiming child benefit to make use of self-assessment forms following welfare reforms last year, meaning many people filling out the forms this year will have never done so before.

Those families earning between £50,000 to £60,000 can continue to receive child benefit, but they must complete a self-assessment form this year, and also in subsequent years in order to pay tax on the benefit.

The process is likely to be confusing for many. In addition, heavy fines and rates of interest apply to incorrect or late returns, even in the case of honest mistakes being made.

Another crucial factor in ACCA’s call for the deadline to be extended is that many more people have become self-employed since last January. With this rise in self-employment, there will be many more people expected to file returns for the first time who many also be confused by the process.

Chas Roy-Chowdhury, ACCA’s head of taxation, said first-timers ‘are going to miss the deadline not because they have been putting it off, but because they are newcomers.

‘It’s not an easy form to complete, and often mistakes will happen because people filling them in don’t know for sure what should be included.’

He also stated, ‘HMRC has a common sense decision to make. Either it can stick to the deadline and penalise all those families and self-employed people who are struggling to get to grips with the self-assessment process, or it can do the right thing and give them a lifeline by extending the deadline.’

It is unlikely that the deadline will be officially changed at this late stage – though the government might be persuaded to decide whether to fine those who file late on an individual basis.

As of yesterday, Her Majesty’s Revenue & Customs was still waiting on some 2 million tax returns to be filed.

For those who miss the deadline, there will be an initial fine of £100 – even if no tax is owed. Starting from the first of May, fines will accrue at the rate of £10 per day for 90 days.

Claiming tax relief for the self-employed

Friday, January 17th, 2014

There are more reasons than you might be aware of in favour of working for yourself. We’re all aware of certain perks – this way, you get to choose their own hours, holidays and direction. Another advantage of being self-employed is that you actually get to claim the tax on many of your business expenses back from the government.

Many people who are self-employed are dimly aware that some of the things they buy and consume for work are tax deductible. At the same time, a lot of people aren’t taking full advantage of this allowance and consequently are losing out on large amounts of money.

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3 Tips For Keeping The Taxman Happy

Tuesday, December 10th, 2013

Paying corporation tax is a necessary but unpleasant aspect of doing business. Few of us relish having to deal with the tax authorities at all – even if everything is in order, undergoing audits and filling out reports can be major drains on your company’s productivity and time.

However, you can take steps to hopefully dissuade the tax authorities from prying too much – they tend to keep an eye on entities that have experienced irregularities in the past, and so staying in their good books will allow you to focus more on keeping your business running uninterrupted in future.

Keep track of your incomings and outgoings

At the end of the tax year, you need to be able to present HMRC with a fairly detailed account of your expenditure and income for the year.

Rather than trying to pull all of this together at the last moment, make an effort to track expenses throughout the year. You might like to scan or photograph invoices and the like and save them, if you’re willing to go through them all as the new calendar year begins. Or you can enter amounts as you go along into a spreadsheet or even a mobile app.

Save for your tax bill

Make sure that you’re putting an appropriate amount of money aside so that you’re not caught out when it’s time to pay. Delays, extensions and partial payments aren’t unusual, but they will cause you to fall out of favour with HMRC.

Ask early for an extension

There are many perfectly understandable reasons for not being able to make your payment. Perhaps you had an unexpected expenditure, or lost a lot of business because of circumstances beyond your control.

If you’re fairly certain you won’t be able to pay the full amount before the deadline, HMRC’s Business Payment Support Service needs to know as soon as possible.

Some form of payment plan can be set up, but the earlier this is arranged the better, as missing the deadline without notice will mean you incur penalties and interest. And it may be some years before the tax authorities are willing to fully trust you again, rather than hound you.

Some of this advice will sound obvious, as it is just common sense ways to prepare for the end of the tax year, and ensuring that you pay what you owe on time. However, you can think of this post as a non-exhaustive checklist. With the deadline for online returns (31st January) approaching, the time to get everything in order is now!