Recovery Team Scaling up at RMT Accountants
March 11, 2019
The nation is preparing itself for this year’s Budget speech, followed shortly by the General Election. With the future of the improved economy still uncertain, all eyes are on Westminster and the decisions to come. Our monthly news update highlights some of the major topics affecting businesses today…
HM Revenue & Customs (HMRC) has been phasing in the Real Time Information (RTI) system since April 2013, and it is now entering the next phase. Employers with fewer than 50 employees will now be required to use RTI for each member of staff on payroll.
Small businesses (those with fewer than 50 employees) and micro businesses (nine or fewer employees) will be required to submit their payroll information to HMRC in ‘real time’ from 6 March.
Until this date, small businesses who had difficulty reporting weekly staff payments, or payments occurring more regularly, were allowed to send their information by the end of the tax month. Preparing for RTI has been the responsibility of each business, with all now expected to have sufficient infrastructure in place to enable submission.
Micro businesses who submit their information late may be liable to a £100 monthly penalty, while small businesses may be liable for £200. Penalty notices will be sent quarterly, with interest charged if you fail to pay within 30 days, therefore HMRC has advised businesses to make preparations for RTI.
The main document businesses are required to submit is the Full Payment Submission (FPS), which contains details of all the payments and deductions that have been made to each employee – including income tax, national insurance contributions (NICs) and student loans. This must also include accurate details of new employees and any who have left the business since the last submission.
Every time an employer makes a payment to an employee they will need to submit an FPS. This can be done either at or before the time of payment, which could be weekly or monthly, and must also include payments that are below the lower earnings limit for NICs.
The original HMRC document can be found here.
The Institute for Fiscal Studies (IFS) recently said in its Green Budget that the Chancellor’s intention to generate an overall financial surplus will require even tougher measures than those which have come before. Some £50 billion will have to be cut in order to reduce the Government’s spending by the intended 14.1%.
Prime Minister David Cameron has expressed the Conservative party’s intention to raise the tax-free personal allowance should they win the next election. Given this promise, tax cuts are expected to be a key feature of the Budget. But Chancellor George Osborne, upon announcing the date of his speech, said: ‘Anyone expecting unaffordable pre-election giveaways will be disappointed because we will stay on course to prosperity’.
There is also speculation that fuel duty will remain frozen, with backbenchers eager to raise the 40% income tax band, while Mr Osborne claims a further £12 billion needs to be saved in welfare cuts.
A key topic in the current economic climate is the energy sector, with North Sea operations seeking tax breaks to get the ailing industry back on track. Malcolm Webb, chief executive of the Oil and Gas UK industry body, said: ‘The upcoming Budget presents a final chance to get this right, half measures will not do and there will not be a second chance.
‘In order to be encouraged to persevere on the UKCS, the industry needs to see cross party alignment for a permanent reduction and simplification of the tax burden on this industry. If no, many will quietly turn away and invest elsewhere.’
Mr Osborne has since commented: ‘We want to make sure we maximize investment in the North Sea, and so I can see we are going to have to take further steps to support the industry’.
Elsewhere, the Scottish Whisky Association (SWA) has lobbied the Government to cut the ‘onerous’ Scotch whisky duty by 2%, after the Chancellor last year praised the industry as a ‘huge British success story’.
The Budget speech will take place on 18 March, with the dissolution of Parliament on 30 March in preparation for the general election on 7 May 2015. Visit our website for the latest Budget news.
Last day to pay any balance of 2013/14 tax and Class 4 NICs to avoid an automatic 5% late payment penalty.
End of Corporation Tax financial year.
End of CT61 quarterly period.
Filing date for Company Tax Return Form CT600 for period ended 31 March 2014.
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