Hallidays, the Stockport based chartered accountants and business advisors, have released their first newsletter of 2013.
Hallidays Newswire looks at topical issues that may affect your business and may have an impact on your business decisions. The latest newswire includes the following topics:
Employment rights – statutory limits – The limit on the amount of the compensatory award for unfair dismissal is set to increase from 1 February 2013. The current maximum of £72,300 is to increase to £74,200 due to inflation.
The maximum amount of a week’s pay for the purpose of calculating the basic or additional award of compensation for unfair dismissal or redundancy payments will be increased to £450.
This increase on the previous limit of £430 applies from 1 February 2013.
The Gov.uk website includes a calculator of statutory redundancy entitlement.
HMRC target those with outstanding VAT returns – HMRC have introduced the VAT Outstanding Returns Campaign, which is an opportunity for taxpayers to bring their VAT returns and payments up to date. To take advantage of the best terms, taxpayers must complete and submit their returns by 28 February 2013.
According to HMRC, as many as 50,000 businesses, that have failed to submit VAT returns, will be targeted with warnings that their tax affairs will be closely scrutinised.
PAYE coding notices – HMRC are issuing PAYE tax codes for 2013/14.
RTI is coming – HMRC are urging employers to get ready for major PAYE changes that come into effect from April 2013. From April 2013 employers will have to submit PAYE returns electronically, using RTI enabled payroll software, each time they pay their employees. The new returns form part of routine payroll procedures and will include details of individual employees’ pay, tax and other deductions.
State Pension reform – The government have announced proposals for a new single tier pension. The government have announced proposals for a new single tier pension.
The single tier reforms will restructure the State Pension into a simple flat rate amount from 2017 at the earliest. Those over State Pension age when the reforms are implemented will continue to receive it in line with existing rules.
The single tier pension will:
- be set above the basic level of means tested support. The amount will be set nearer implementation;
- replace the State Second Pension, contracting out and out-dated additions, such as the Category D pension and the Age Addition. The Savings Credit element of Pension Credit will also close to pensioners reaching State Pension age after the implementation of the single tier pension;
- require 35 qualifying years of NIC or credits for the full amount, with pro-rating where 35 years is not achieved. There will also be a minimum qualifying period of between seven and ten qualifying years;
- be based on individual qualification, without the facility to inherit or derive rights to the State Pension from a spouse or civil partner; and
- continue to allow people to defer claiming their state pension and receive a higher weekly State Pension in return. The deferral rate will be finalised closer to the planned implementation date. It will no longer be possible to receive deferred State Pension as a lump-sum payment.
The government will also carry out a review of the State Pension age every five years, based around the principle that people should maintain a specific proportion of adult life receiving the State Pension. The first review will take place in the next Parliament.
Child Benefit opt out
The High Income Child Benefit Charge (HICBC) was introduced from 7 January 2013. It mainly applies to a taxpayer who has ‘adjusted net income’ in excess of £50,000, where either they or their partner is in receipt of Child Benefit. The effect of the charge is to claw back some or all of the Child Benefit paid. Where both partners have income in excess of £50,000 the charge applies to the partner with the higher income.
HMRC bank account details for employers
HMRC have updated their guidance to employers on paying PAYE liabilities. From April 2013 employers who make a payment to HMRC by:
- Bacs Direct Credit
- Faster Payments by online/telephone banking
- CHAPS
should make payments to a single bank account. From month 1 of 2013/14 payments should be made to the Accounts Office Cumbernauld account using sort code 08 32 10 and account number 12001039.
HMRC has started to send employers information about this change ready for 2013/14.
For full details of the above articles and external links to relevant official websites please visit: www.hallidays.co.uk
To receive Hallidays monthly newswire email jbennett@hallidays.co.uk