Member Since: 24th Apr 2000
Rebecca trained in London with Kidsons and, on qualifying, spent some time as Chief Accountant of a manufacturing company. She now has her own small practice in Gloucestershire that comprises of owner managed businesses and small companies.
She also lectures extensively for a range of professional bodies, accountancy firms, commercial organisations and the Inland Revenue. Demand has grown for Rebecca on the lecture circuit where she is well known for her refreshing, enthusiastic and entertaining presentation style as well as having a practical and down-to-earth approach to tax.
Partner Rebecca Benneyworth Training Consultants
11th Mar 2013
It sounds as if you have plenty to evidence your work and the fact that your business is not high risk but low risk. To be honest, this is really what HMRC needs - professional firms doing the work properly and taking work away from the cowboys.
Your approach is absolutely the best one in my view. It enables you to demonstrate and evidence professionalism and prove that your risk is lower than the generality of these agents.
11th Mar 2013
Not started yet
The dishonest agent process has not started yet, and the process for dealing with a dishonest agent is quite different from that outlined above. So whatever OP believes, this absolutely cannot be that process. It maybe that the letter refers to this process, but it cannot be an accusation as this can only be sent in a determination, against which there are rights of appeal. Maybe OP has understandably got het up about a challenging letter and read a bit more into it than it says.
HMRC has also NOT commenced "agent view" nor is this currently what agent view will do as currently proposed. The proof of concept model is currently being tested on a small sample of agents and will include client filing and payment statistics, and later compliance intervention outcomes.
However, HMRC has quite separately been looking closely at high volume repayment agents as a risk category, and I suspect that this is where your firm has come under the microscope. There are plenty of good suggestions here on appropriate action, but be assured that resources are only expended where risk is identified. You can easily demonstrate that the risk does not apply to your clients so that should be your objective.
6th Mar 2013
Nobody answered 5
When you come to pay the staff, surely you then know what hours you are paying for? Assuming they are paid an hourly rate. So your software needs to capture this number of hours so that the hours worked flag can be correctly set each week. It is fully recognised that this will vary from week to week for some employees, - and that bthis may affect their benefit entitlement. But you need to report the correct band of hours, and no you can't use "other" - this is reserved for pensioners.
6th Mar 2013
late payment penalties
I checked with HMRC regarding the switch from old late payment penalty (raised after the end of the year) to the new late payment penalty (which will be in FB 2013) and how that would work. I was advised that the old system will apply throughout 2013/14 and the new ones will kick off in April 2014. This is a pity as you coprrectly say that the penalties will reduce under the amended regulations.
1st Mar 2013
We can split hairs in many ways. But we need to be aware that this needs clearing up at the beginning, not allowed to be brushed under the carpet on the basis that it is a hard question.
One of the really difficult downsides is that some unscrupulous employers could decide to move to "quarterly" payroll with intermediate weekly loans. This would enable them to defer payment of PAYE / NIC until quarter dates rather than monthly. So HMRC has a challenge to agree something workable without it becoming a wide abuse.
And incidentally, for some it is absolutely certainly an advance of earned wages. I once worked for a business where the switch to monthly payroll (before my appointment) caused such uproar with the unions that a variation to the contract of employement was negotiated. In many cases if you asked the employee they would not regard it as a loan but as a payment of their wages. It's a difficult one to prove either way but in my view we need to address it and sort it out. Even if HMRC agrees that "loan agreements" must be on file......
28th Feb 2013
That there is a Sage payroll service for very small businesses which operates in the Cloud. Haven't used it but I know it is out there
28th Feb 2013
A regular sub against pay at the end of the month is payment on account of pay and therefore triggers the responsibility to report through RTI (and indeed to account for PAYE at that point in time. See CWG2 page 6 :
If the employee
is not a director, operate PAYE on the earlier of:
• when you actually make the payment
• when the employee is entitled to be paid, even if the pay is not drawn until later.
(Sorry, I can't get the font larger again now after posting that extract!) It can be difficult to justify that this is a loan and therefore does not trigger RTI. It is one we are still discussing with HMRC at the moment. If this is a one -off event you can include in the next payroll run under the easement announced in December (item 1). But if it is regualr and widespread, you have a real problem. Working on it....
28th Feb 2013
A couple of points on penalties
1. They don't start until April 2014
2. You can only get a maximum of one penalty a month even if you file weekly
3. HMRC will be sending warnings to employers in late 2013 to tell them when they have been late so that they are aware they need to improve before the penalties come in.
25th Feb 2013
A few additions
Universal credit claimants
There will be a requirement for universal credit claimants to report btheir income each moonth if the employer is no in RTI. The draft Regs are available on the revenuebenefits.org website.
It has been held at previous appeal some years ago that payment is made when the money is withdrawn from the company where there is a debit balance. So in order to make RTI filing (assuming that there is a requirement to do so - director paid at or above LEL) you need to be able to (a) state the date of payment, and (b) file on or before payment is made. Hence in my view you need to make a decision about both running the payroll and drawing off the funds so that all of this information ties up. If the loan account is in credit the crediting the salary into the loan account (before it is physically withdrawn) counts as payment for PAYE purposes, so putting the salary to the credit of the loan account allows you to do a single payroll run and single journal entry for salary - provided the director has a credit balance, A note that any excess amounts drawn are to be treated as a loan would lock down the position regarding additional payments.
Where the account is in debit, then the earliest thing that happens is that money is drawn so in my view you need to make actual payments to match the salary reported through RTI.
Need for a scheme
Where no employees including directors are paid equal to or above LEL there is no need for a PAYE scheme. Thus no scheme = no reporting. If you have a scheme because you need to make P11D's etc at the end of the year then the answer at present does not seem to be straight forward. I'm just trying to get some more feedback on this from HMRC and will come back on with a clearer answer.
22nd Feb 2013
Using the data ranges on HMRC website this is not clear, but in talking to software guys, it seems that the inactivity report is incorrectly set up. Rats!! Agreed with your protocol though.
As far as claimants eaning under LEL with an employer paying all staff below LEL - John Andrews put it well - you wouldn't want to be a claimant in that position....
For many, the director situation boils down like this:
Director draws money from company willy nilly. No credit balance available. Ends up with big debit balance at end of year. This will be cleared by salary and dividend. For salary. payment has already been made, so filing FPS showing £7,000 (say) means that on or before rule is breached. Only solution is to draw a cheque for £7,000 at same time. Result : debit balance no smaller. Any solution needs to be based on payment matching the FPS's filed. Could be annual, could be monthly. BUT you need to pay so that any other draw down is loan and not confused with salary. I hope this is clear - it's been a bt of a long day!! I'll read it again tomorrow afternoon (I think that might be THIS afternoon actually) to check it makes sense.