Tax Guru
Moray-Life

This feature is sponsored by: TaxAssist Elgin

Writing exclusively for Moray Life, Elgin-based tax and accountancy specialist Andrew Richardson gives advice on financial matters to small businesses.

If you have a tax query then please submit your questions directly to Moray-Life using this form and Andrew will try to give you a response on this page next month.

 
 

Tax Guru 03-2013

Hello again!

My name is Andrew Richardson and I have been running TaxAssist Accountants in Elgin for five years. I am hoping that this tax advice section will become an interactive feature. Submit your tax and accountancy questions to Moray Life and I’ll answer a sample of them each month, along with a brief summary of the tax issues we should be looking out for.

The biggest issue facing employers at the moment is the introduction of Real Time Information (RTI). Below are some of the answers to your questions:

Q: I only have a few part-time employees and none of them earn more than £100 a week. Under RTI, will I now need to register as an employer and run a proper payroll?

A: Under the current guidance in issue, HM Revenue & Customs (HMRC) have stated that if an employer is not currently operating PAYE because they are not obliged to, their circumstances will not change under Real Time Information (RTI).

Under the current PAYE system, employers tell HMRC what deductions they have made from employees pay after the end of the tax year. Only then are HMRC able to review whether the correct deductions have been made under PAYE.

But under RTI, HMRC will be receiving information when, or before payments are made. This should mean more employees will pay the right amount of tax and National Insurance in the tax year.

Based on the information you have supplied, you will not be obliged to register as an employer and operate RTI. Having said that, the Department for Work and Pensions will need to be informed of your employees' earnings for tax credit purposes, but there will be an alternative process for this; rather than the employer reporting under RTI.

Q: As well as full-time staff, I have a few 'casuals' who help out in our peak times. Currently, they are not on the payroll because they earn less than £100 per week. Will that change under RTI?

A: If an employer is operating a PAYE scheme, then under Real Time Information (RTI) they will have to inform HM Revenue & Customs (HMRC) about payments of earnings to all employees- even where an employee earns less than the Lower Earnings Limit (currently £107 per week). This is a significant change from the current requirements.

Under RTI, employers will send HMRC information about employees' pay when or before payments are made. This should mean more employees will pay the right amount of tax and National Insurance in the tax year.

So you will need to obtain the following information from your casual staff members:

  • National Insurance number
  • Title
  • Surname
  • Forename
  • Second forename
  • Date of birth
  • Gender
  • Address including the postcode
  • Payroll ID/ staff number
  • Number of normal hours worked

You can verify their identity against official documents such as birth certificates, driving licences or passports

Q: A few years ago, I was running my own business but I got offered a job so I packed up my sole trade and now my only source of income is from my employment. But HMRC have sent me a tax return to complete. Do I have to fill it in- or is there some way I can tell them it isn't required?

A: If HM Revenue & Customs (HMRC) has asked you to complete a tax return but you think you don't need one, you can call the Self Assessment Helpline. They will tell you whether you still need to complete a tax return. The number is: 0845 900 0444

Q: I have lost the payslip I need to pay HMRC my tax. What should I do?

A: Interest will be accruing on a daily basis on the outstanding amount and late payment penalties will start to apply once the debt is over 30 days old, so you should settle the tax as soon as possible. There are a variety of ways to pay HM Revenue & Customs (HMRC) including:

  • Direct Debit
  • Online using a debit/ credit card
  • Faster Payments by online/ telephone/ CHAPS
  • At the bank using a Bank Giro slip
  • At the Post Office
  • By post

Whichever option you go for, make sure you quote your Unique Taxpayer's Reference (UTR) too- a ten-digit reference that you should find on most correspondence from HMRC. For more information on payment options, visit the Department's website.

 

If you have a tax query then please submit your questions to Moray Life and I'll try to give a response next month.  And always remember...

'Intaxication: Euphoria at getting a refund from HMRC, which lasts until you realise it was your money to start with.'

By Andrew Richardson

TaxAssist Accountants Moray

Andrew’s contact details:

Please see my TaxAssist page for more details.