Monthly Archives: February 2014

HMRC Payroll RTI Penalties

On 12 February this month, HMRC announced that Real Time Information (RTI) penalties for late filing and late payment of RTI PAYE online returns will now not be starting in April (2014) after complaints from accountants and businesses and technical problems with the new system.

Automatic penalties for late filing payment of RTI PAYE returns will now apply from October 2014. Automatic penalties for late payment to HMRC of tax and National Insurance deducted from pay will now apply from April 2015.

The penalties that will apply from October 2014 for late filing are as follows:

  • 1 to 9 employees – £100 monthly filing penalty per PAYE scheme
  • 10 to 49 employees – £200 monthly filing penalty per PAYE scheme
  • 50 to 249 employees – £300 monthly filing penalty per PAYE scheme
  • 250 or more employees – £400 monthly filing penalty per PAYE scheme

The penalties that will apply from April 2015 for late monthly & quarterly PAYE payments are as follows:

  • First late payment – no penalty
  • 2nd to 4th late payment – 1% penalty charged on the amount paid late
  • 5th to 7th late payment – 2% penalty charged on the amount paid late
  • 8th to 10th late payment – 3% penalty charged on the amount paid late
  • 11 or more late payments – 4% penalty charged on the amount paid late

Now is the time to ensure your payroll systems allow for efficient filing on time and that you are up to date with PAYE payments to HMRC.

Speak to your accountant or payroll bureau for guidance to avoid penalties.

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Talk Your Way to Success in Business and Life

Successful people in business and life are very often those individuals that have embraced and mastered the art of public speaking.

With around 74% of people fearing public speaking, it is not surprising that competent speakers are a rare breed. The few that master this oratory skill can ignite their careers or businesses.

The art of public speaking will boost performance in job interviews, sales pitches, marketing presentations, negotiations and in the art of persuasion.

This is not a complete list and whatever benefits you gain from developing your public speaking skills, you will be admired by your peers.

There are numerous books and workshops dedicated to learning the art of public speaking. Books are great as a guide but are no substitute for practice in front of a group of people.

Workshops help you develop public speaking skills in front of a group, however, they can require a large financial investment and are over after a day or so. The lessons learned are soon forgotten unless you continue to practice in front of audiences on a regular basis.

Toastmasters International

Toastmasters International helps people to develop their speaking and leadership skills. Membership is nearly 300,000 strong and there are 14,350 clubs in 122 countries.

Membership in Toastmasters International is one of the best investments you can make in yourself. Club monthly subscriptions vary, however, as a guide, Leeds City Toastmasters club charges a modest £12.50 per month and meets on the 1st and 3rd Thursday of each month.

How Does it Work?

A Toastmasters meeting is a learn-by-doing workshop in which participants hone their speaking and leadership skills in a no-pressure atmosphere.

There is no instructor in a Toastmasters meeting instead, members evaluate one another’s presentations. This feedback process is a key part of it’s success.

Meeting participants can, if they wish, also give impromptu talks on assigned topics, conduct meetings and develop skills related to the running of the meetings.

Members develop the basic foundations of public speaking by working through the Toastmasters ‘Competent Communication’ manual, a series of 10 self-paced speaking assignments which build on each other like building blocks.

Members also learn leadership skills by working through the Toastmasters ‘Competent Leadership’ manual. Members are not lectured on leadership skills but learn-by-doing roles at meetings and being mentored before being asked to lead meetings.

Some Benefits of Joining Toastmasters

  • Increase your self-confidence
  • Become a better speaker
  • Become a better leader
  • Communicate more effectively

Investing in membership is very cost-effective at around 50p per day, invest in your future and experience a Toastmasters meeting as a guest.

For more blogs on public speaking visit my DalesCoach blog.

Find Your Local Toastmasters Club

Toastmasters International

Toastmasters UK and Ireland

Strictly Speaking Harrogate (Toastmasters)

Leeds City Toastmasters

 

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Holiday Entitlement Calculation

Many employers are confused about annual holiday entitlement for employees particularly when they are part-time or work irregular hours.

It is important to provide the legal holiday entitlement to avoid breaking the law and the penalties that may result.

Full-time employees (working 5 or more days per week) are entitled to 28 days paid holiday a year. The 28 days includes bank holidays. This scenario is quite straight forward.

Part-time employees on regular hours

It gets more complicated when an employee is part-time working regular hours over 1 to 4 days a week. These employees are paid 28 days pro-rata.

Example of holiday entitlement calculation:

Working 4 days a week: 28 days x 4/5 = 22.4 days a year

Working 3 days a week: 28 days x 3/5 = 16.8 days a year

Working 2 days a week: 28 days x 2/5 = 11.2 days a year

Working 1 day a week: 28 days x 1/5 = 5.6 days a year

Note that 28 days is the maximum statutory holiday. Employees working 6 days a week are still only entitled to 28 days’ paid holiday and not 33.6 days (28 days x 6/5).

Bank or public holidays do not have to be given as paid leave although employees can take any bank holidays that fall on their normal working days out of their annual holiday entitlement.

Part-time employees on irregular hours

It gets even more complicated when an employee is part-time and works irregular hours. This is a typical situation for pub, restaurant and café owners.

Where an employee works irregular hours, it is simpler to calculate accumulated holiday pay and convert that to hours of holiday entitlement.

A percentage of 12.07% of gross pay is a method that is fairly accurate in calculating accumulated holiday pay that the employee can take when taking time off.

My preference is to use the holiday calculator tool on the Governments GOV.UK web site:

Gov.uk Calculate Holiday Entitlement

I would like to repeat that it is important to provide the legal holiday entitlement to employees and avoid breaking the law and the penalties that may result.

Consult your accountant, book-keeper or payroll bureau for advice.

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Every Business is a Family Business

‘Every business either gives to the family or takes from the family, just as individual family members do’ – Michael E. Gerber, The E-Myth.

Your business is a family business. If your business takes from your family, your family is the first to pay the price. Keep your family informed of how the business is doing, good or bad, as it affects your whole family.

A business is only a business, it is not your life. If you keep the family informed, they can be very supportive in difficult times. Conversely, keep them in the dark, well imagine what could happen.

Food for thought.

 

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Tax year end is on 5th April, why?

It seems crazy that the tax year end in the United Kingdom is 5th April. Additionally, month ends for payroll tax compliance are the 5th of the month. Wouldn’t it be sensible to move the tax year and month ends to the last day of the calendar month?

It’s Down to Calendars

To find the ‘geeky’ answer we have to go back to 1582 when Pope Gregory XIII ordered an alternative to the Julian calendar which was introduced by Julius Caesar in 46 BC to replace the previous Roman calendar.

The Julian calendar was fairly accurate but differed from the solar calendar by several minutes a year which was not a lot in one year but builds up to several days over the centuries.

With this in mind, Pope Gregory XIII introduced the ‘Gregorian’ calendar in 1582 to rectify the inaccuracies of its predecessor, the Julian calendar.

Although the new Gregorian calendar was used in much of Europe, Britain still used the old calendar which was 11 days off the rest of Europe by the 1700’s. In 1752 Britain needed to move to the Gregorian calendar to synchronize with the rest of Europe.

Now for the geeky accountant bit

In the old Julian calendar as used in Britain, the tax year ended on 24th March (the old New Year’s Day, i.e. the Spring Equinox). The new Gregorian calendar was 11 days ahead of the old Julian one.

On changeover from the old to the new system in Britain, Wednesday, 2nd September, 1752 was followed by Thursday, 14, 1752. The 3rd to 13th September, 1752 never happened in order to make up the 11 days historical slippage.

The British Treasury was anxious not to lose 11 days of tax revenue. It decided that the tax year that would have ended on 24 March, 1753 (a short year of 354 days after losing the 3rd to 13th September, 1752) would now end on 4th April, 1753. This made up for the 11 days lost.

If that’s not geeky enough (accountants love it!)

There was a further change in 1800. Sadly 1800 was not a leap year in the new Gregorian calendar but would have been under the old Julian system.

To gain the extra one days tax revenue that would otherwise have been lost, the British Treasury once again extended the tax year, this time from 4th April, 1800 to 5th April, 1800 where it has remained until the present day.

Who says ‘Tax Needn’t be Taxing’!

Is it not time to change the British tax year to 31 March? It would save a lot of confusion, particularly, for payroll. Consider, a July monthly payroll is in fact in the month ending 5th August for tax purposes – how confusing!

HMRC have already changed the tax year end for Corporation Tax (covering Limited companies and PLC’s) to 31 March. Surely it is time to do the same for all other taxes covering individuals, sole traders and partnerships.

The Dales Accountancy Service

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