Welcome to your November Insider. This month we take a look at what you need to do now to prepare for the start of Real Time Information (RTI) in April next year. And as the temperature drops and thoughts turn to the festive period, we give a brief overview of some of the tax reliefs that are available for the Christmas season – have you planned your staff party yet? Elsewhere, HMRC shines its spotlight onto ‘direct sellers’; in its new campaign targeting those who sell goods without the need of a shop. Finally in Your Money, we explore the end to the default retirement age, and the option to continue working into later your later years.
Real Time Information – are you ready?
There are now less than six months until almost all employers and pension providers must report their payroll information to HMRC on or before every payday.
To be able to comply with the new system there are a number of measures that you as a business will need to take. These include:
Ensuring employee data is correct and complete It is vital that the information you hold on your employees is accurate and up to date for Real Time PAYE to function effectively. The data held by you will be matched to data held by HMRC, so any discrepancies could be rejected.
Align your data to HMRC’s Before you can start reporting in real time you will need to send HMRC information about every employee that’s worked for you in the current tax year (even if they have already left). Your information and software will need to be up to date before you can do this.
Changing internal processes There will need to be a number of changes, including:
* The way you record working patterns
* The way you report new starters and leavers
* The way you report company cars
* The way you report at the year-end.
Ensure you are using the RTI compatible software If we do your payroll you will not have to worry about this, but if you are using payroll software you will need to ensure it is compatible with RTI.
We can help We can help you to prepare and get ready for RTI, please contact us to find out how.
Tax relief at Christmas
As Christmas edges closer we take a look at the qualifying tax expenditure your business could take advantage of over the festive season:
Christmas parties Christmas parties can be held with an exemption from tax and national insurance provided they meet certain conditions, including:
* Being open to all employees
* Costing less than £150 per head.
Gifts to customers Business gifts are only allowable as a tax deduction if:
* The total cost of gifts to any customer does not exceed £50 per year and
* The gift contains a clear advertisement for the business and
* The gift is not food, drink, tobacco or exchangeable vouchers.
Samples of a product are allowable even if they are food, drink or tobacco.
Gifts to employees Small items such as a Christmas turkey or standard bottle of wine are considered to be trivial benefits, which can be given as tax-free gifts to your employees. Other gifts to staff are tax allowable, but your employees could be taxed on the value of the gift as a benefit in kind, in which case you would also have to pay Class 1A national insurance on the value of the gifts.
For help and advice on tax relief at Christmas please contact us at firstname.lastname@example.org.