payroll seminar

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Payroll & CIS Presenter: Mr Zee Shan

Post on 13-Sep-2014

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Title: Payroll Seminar How to register; RTI (Real Time Information); Record keeping and reporting requirements; Mistakes to avoid; Penalty regime; CIS refunds. Summary: In this seminar you will learn the basic skills to enable you to deal with the payroll and CIS yourself. It will also enhance your understanding of the RTI (Real Time Information) initiative and the penalty regime. Case studies will be completed in groups for better understanding of the practical application of the knowledge learned. To be delivered by: Zee Shan Bawany – Regional Tax Adviser – Smartfield Accountants

TRANSCRIPT

Payroll & CIS

Presenter: Mr Zee Shan

Content:1. Intro to presenter2. PAYE3. Online Registration Process4. Mistakes to avoid5. CIS6. RTI7. Help & Advice

Presenter: Mr Zee Shan

Introduction of the Presenter

Zee Shan Bawany CTA ACCA MAAT

Tax Manager

Smartfield Accountants

Education

Qualification Centre

CTA (Chartered Tax Adviser) BPP Birmingham

ACCA (Association of Chartered Certified Accountants) De Montfort Uni

ATT (Association of Tax Technicians) FTC Birmingham

C & G 7407 Teacher Training Leicester College

AAT (Association of Accounting Technicians) Leicester College

BTEC National Diploma in Computing Leicester College

Smartfield Limited Tax Manager

Abbey Tax Plc Tax Consultant

Smith Hannah Ltd Head of Personal Tax

Leicester College Tax Lecturer

Employment

Hobbies

Hobbies

PAYESystem

Who needs to register PAYE Scheme?

Anyone who employs staff. It includes:

- Self Employed Individuals- Ltd Co- Partnerships- Trust

Who does NOT need to register for a PAYE Scheme?

Anyone who employs staff. But:

- pays them below the National Insurance Lower Earnings Limit (2014: £109 p/wk)

- all employees do not have another job

- none of the employees are receiving a state, company or private pension

- no employee benefits are provided

http://hmrc.gov.uk/paye/intro/register.htm#1

http://www.hmrc.gov.uk/manuals/pommanual/PAYE20135.htm

Types of PAYE Schemes

Types Of PAYE Schemes

-Normal PAYE Scheme-Tronc Scheme-Direct Payment Scheme (DOME)

http://www.hmrc.gov.uk/manuals/dmbmanual/dmbm520020.htm

Normal PAYE Scheme

3 Payment Options

-Monthly Payment -Quarterly Payment-Annual Payment

Payment Options of

Normal PAYE Scheme

Normal PAYE Scheme:

Monthly Payment

Pay by 19th of the following month.

If paying electronically then pay by 22nd

Normal PAYE Scheme:

Quarterly Payment

If the combined National Insurance contributions and PAYE payments for your employees and sub-contractors averages less than £1,500 a month, then Quarterly Payment Scheme can be setup.

Normal PAYE Scheme:

Yearly Payment

If all payments on which tax and NICs are due are paid to your employees annually in a single tax month, you can ask HMRC to be treated as an 'annual payer'. You must use the same month every year, so if this changes or you start paying your employees more frequently, you will need to tell HMRC.

Where to send payments

HM Revenue & CustomsBradfordBD98 1YY

Online payments

https://www.santanderbillpayment.co.uk/hmrc/scripts/nrpayform.asp?pt=PAYE

Nil Online Payments

http://www.hmrc.gov.uk/tools/payinghmrc/no-monthly-payment.htm

Upto 30 April 2014 only

Nil Payments Notice

Call HMRC's Payment Helpline on Tel 0300 200 3401

RegisteringPAYE Scheme

Registering PAYE Scheme

Options:1. Call 0300 200 32112. Online at:

http://www.hmrc.gov.uk/paye/intro/register-email.htm

The Employment Allowance is available from 6 April 2014. If you are eligible you can reduce your employer Class 1 NICs by up to £2,000 each tax year.

https://www.gov.uk/employment-allowance-up-to-2000-off-your-class-1-nics

£2,000 Discount!

OperatingPAYE Scheme

MonthlyVs

Weekly

Joiners: P46 or P45

Leavers: P45

Reports:Wage slipsGross & Net PayFPS And EPS

Yearly Forms:P60FPSEPS

R T IReal Time Information

R T IHMRC Guide

http://www.hmrc.gov.uk/payerti/

Data Required

Why?To let HMRC know who were paid and how much.

When?By 19th of month following deduction even if paying by 22nd, replacements can be sent

How?Basic PAYE Tool or 3rd Party Software.

Full Payment Submission (FPS)

Why? To reclaim statutory payment compensation YTD or CIS suffered

When? By 19th of month following deduction even if paying by 22nd, replacements can be sent

How? Basic PAYE Tool or 3rd Party Software.

What else?– To submit nil return or period of inactivity– Even 1/4ly or annual payers must do monthly EPS saying ‘nil payment’?– To submit return for year

Employer Payment Summary (EPS)

Extra details needed on Final EPS:

- Ceased Indicator- Date scheme ceased- Final Submission for Year- Free of Tax Payments to employees- Expenses and Benefits paid to employees- Employees Out of UK- Employees Pay to Third Party- Forms P11D and P11D(b) are due?- Service Company

http://www.hmrc.gov.uk/payerti/reporting/what-to-report.htm#9

Employer Payment Summary (EPS)

Will start from 6 October 2014

http://www.hmrc.gov.uk/payerti/reporting/late-reporting.htm#3

Penalties under RTI

Submission deadlines

Final EPS : 19 April

EYU (Earlier Year Update): 19 May

P60 to employees : 31 May

Penalty for late submission of

Final EPS

£100 per 50 employees for each month or part month you delay filing your return after 19 May.

http://www.hmrc.gov.uk/paye/problems-inspections/annual-return-late.htm

Group Exercise

Complete P60

Case Study

Payroll Manager

Common Mistakes

Group discussion

Solution to Avoid Common Mistakes

1. PAYE Office Reference Number used in place of PAYE Reference Number;

2. P14 form template used instead of P60 to hand out to employees;

3. Hand out the correct P60 to the correct employee. Mistakes happen when two employees have the same initial and surname;

4. Enter the correct National Insurance Numbers for all the employees, otherwise the State Pension benefit will not accrue;

5. Ask the employee to confirm his/her current address, to ensure the address on the P60 is correct. If P60 is to be posted out to the employee then it will reach the correct address.

Tax TableTax Year

12/13

£

Tax Year

13/14

£

Income TaxTax free income

Personal allowance 8,105 9,440

Rate

Basic rate: 20% 0 – 34,370 0 – 32,010

Higher rate: 40% 34,371 – 150,000 32,010 – 150,000

Additional rate: 45%(50%) Over 150,000 Over 150,000

http://www.hmrc.gov.uk/rates/it.htm

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£ per week 2011-12 2012-13 2013-14

Lower earnings limit, primary Class 1 £102 £107 £109

Upper earnings limit, primary Class 1 £817 £817 £797

Primary threshold £139 £146 £149

Secondary threshold £136 £144 £148

Employees' primary Class 1 rate between primary threshold and upper earnings limit

12% 12% 12%

Employees' primary Class 1 rate above upper earnings limit

2% 2% 2%

Class 1A rate on employer provided benefits (1)

13.8% 13.8% 13.8%

Employers' secondary Class 1 rate above secondary threshold

13.8% 13.8% 13.8%

Construction Industry Scheme

Registration:WhoWhatHow

Registration: Who

Who needs to register?Contractors and Sub-Contractors

Registration: What

What work is within CIS? Construction;Refurbishment;Decoration.

http://www.hmrc.gov.uk/cis/intro/decide-if-cis.htm

Registration: How

How to register for CIS? Contractors & Sub-Contractors:CIS Helpline on Tel 0300 200 3210

Operating CIS

Responsibilities if you are a CIS contractor

If you work as a CIS contractor you need to:

- register for CIS with HMRC- check the payment status of your subcontractors before you pay

them- tell HMRC each month how much you have paid your subcontractors

- pay HMRC the deductions that you have taken from your subcontractors' payments

- give the correct paperwork to both HMRC and your subcontractors

http://www.hmrc.gov.uk/cis/contractors/reg-obs.htm

Verification of Sub-Contractors

Call CIS Helpline on 0300 200 3210Monday to Friday, 8am to 8pmSaturday, 8am to 4pm

Apply deduction:

30% Unregistered20% Registered

0% Gross Pymt Status

Apply deduction on what:

Labour cost only

Not on materials cost

Deductions table:GrossIncome

Material Cost

Labour Cost

CIS Deduction

Net Income

CIS Payment:

Monthly through PAYE system

CIS Refund Claim:

Through PAYE or SA100 Personal Tax Return

Not through CT600 Company’s Tax Return

CIS Gross Payment Status

Applying to be paid gross under CISBefore HMRC can grant you gross payment status so you can get paid with no deductions, you'll need to show them that your business passes three tests:

business test: CIS work & Bank Accountturnover test: £30,000 per person or £200,000compliance test: Up to date

http://www.hmrc.gov.uk/cis/subcontractors/advice-pay.htm

Example of CIS300

Monthly Return

Deadline Date

Deadline Datefor monthly CIS 300 Return

19th of every month

£100 per month

Penalties for late filingof monthly CIS Return

Summary- PAYE- CIS- RTI

Group Discussion

3 Problems that you face when operating the payroll and how you overcome

them.

Please put your email address on the list

Please do not send me e-mail after the event to request copies because I do many of these event and it is hard to deal with

individual requests after the event.

Copy of slides

HMRC Employer Helpline0300 200 3211

CIS Helpline 0300 200 3210

Help & Advice

The End