With the end of the tax year on the horizon, employers are starting to think about the year-end reporting requirements (and if not, perhaps should be) so I thought this the ideal time to share some FAQs.
I have been subject to Construction Industry Scheme (CIS) deductions as a company. How do I get this money back from HM Revenue & Customs (HMRC)?
Your CIS deductions can be claimed as a credit against the company’s monthly PAYE/NIC bill. Alternatively, at the end of the tax year, you can make a claim for repayment or offset the deductions against your corporation tax bill. We can help in either circumstance.
What is the Apprenticeship Levy and will I have to pay?
The Apprenticeship Levy is a new government initiative to boost productivity by encouraging employers to invest in new apprenticeships. From April 2017, employers will be charged a levy equal to 0.5% of their gross payroll (i.e. the amount liable to class 1 NIC) and this will be reported through Real Time Information (RTI) and payable at the same time as the PAYE and NIC.
However, there is a £15,000 allowance so employers who have an annual wage bill of less than £3 million are unlikely to be liable for any additional payments.
Employers who pay the Apprenticeship Levy will have access to this money through the new Digital Apprenticeship Service (DAS) and will be able to spend the fund on approved training for their employees.
You can find a more comprehensive summary here.
One of my employees has acquired some shares in my company. I don’t need to report anything, do I?
Where an employee of a company acquires shares in that company there are tax and NIC implications to consider, if the price at which the shares were acquired was below market value.
HMRC are notified of this acquisition on an Employment Related Securities Return (formerly Form 42).
Unfortunately, this reporting requirement does not cease when you believe there is no tax to pay as, even if you used a formal valuation to ascertain market value, this is subjective and HMRC may challenge the value.
The legislation covering employment-related securities is very complex and the reporting exemptions are quite strict. Therefore, if your company has made any share transfers in the year, do get in touch to discuss what is required, as it is not just formal share schemes that are caught.
Some of my employees work away overnight. I used to have a dispensation to allow me to pay them a set allowance – I can still do that, can’t I?
The quick answer to this, rather unhelpfully, is, IT DEPENDS.
If the rates at which you wish to pay are at or below HMRC’s approved benchmark scale rates (you can find them here) then YES you can (assuming that they are qualifying expenses).
If the rates you want to pay are in excess of the approved scale rates then NO you can’t, without first receiving approval from HMRC to use a specific scale rate.
We have recently seen cases of scale rate applications being turned down, therefore it is important if you are going to make an application that it is as comprehensive as possible.
If you would like any help in compiling an application or would just like a review before it is sent in then let me know as we can help on both fronts.
If you wish to discuss any of these FAQs further, or if you have a different employment tax query, please do not hesitate to get in touch with me at firstname.lastname@example.org. Alternatively, you can phone me, or your usual contact, on 01603 624181.