CCTV and Data Protection

CCTV – Don’t fall foul of the Data Protection Act!

CCTV Data Protection

Many retailers, pubs, restaurants, hotels and other businesses have CCTV for security. CCTV and recording images of people are covered by the Data Protection Act. This means, if you have CCTV to monitor people in and around your premises, you must register with the Information Commissioners Office (ICO) under the Data Protection Act.

Extract from the Information Commissioners web site on CCTV Data Protection

‘The UK is recognised as a leading user of CCTV and the public are used to seeing CCTV cameras on virtually every high street. Such systems continue to enjoy general public support but they do involve intrusion into the lives of ordinary people as they go about their day to day business and can raise wider privacy concerns.

We know from our research that the public expect CCTV to be used responsibly with proper safeguards in place. We have therefore issued guidance to help organisations who use CCTV to comply with the Data Protection Act 1998 and to help them inspire public confidence that they are using CCTV responsibly.

Images of people are covered by the Data Protection Act, and so is information about people which is derived from images – for example, vehicle registration numbers. Most uses of CCTV by organisations or businesses will be covered by the Act, regardless of the number of cameras or how sophisticated the equipment is.’

CCTV Data Protection Code of Practice

The CCTV code of practice provides guidance and advice for CCTV users on how to comply with the Data Protection Act and also includes a simple checklist for users of very limited CCTV systems where the full provisions of the code would be too detailed.

Download (PDF, Unknown)

CCTV in Pubs

The ICO has received a number of enquiries from pub landlords on the issue of CCTV installation being made a condition for obtaining, or continuing, a licence to sell alcohol.

I’m sure this applies to restaurants, cafés, wine bars and hotels as well as pubs.

Here is some additional ICO information and FAQs for pubs:

Download (PDF, Unknown)

Download (PDF, Unknown)

For full details on the above go to ICO Web Site -CCTV

Disclaimer

The above is not exhaustive and is for guidance only and you should consult your accountant, other professional adviser or the Information Commissioners Office before taking action on any of the above. See the Disclaimer

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EU Referendum Uncertainty

referendum uncertainty

Glenigan, a leader in UK construction market analysis and forecasting, has reported that new project starts for the three months to May, 2016 are 5% down on a year ago as referendum uncertainty creeps in.

Glenigan also suggests that developers are now delaying their commitment to new projects starts until after the EU referendum.

You can see the report at Glenigan – Project starts dip

Estate agents are also reporting that people are holding back buying and selling houses until they know the result of the referendum.

Whatever business sector we are in, referendum uncertainty, may be giving us an uncomfortable ride at the moment. Consultants and freelancers may be finding it harder to get new projects and existing ones may well be on hold until after the 23 June, EU referendum.

Whether the vote goes in favour of remaining in the EU or leaving, things can’t improve until after 23 June.

If we remain in the EU, things may settle down fairly quickly as we may be able to continue as we did before.

On the other hand, if we vote to leave, there may be a further two years of uncertainty whilst we withdraw from the EU and trade deals are negotiated between the UK, Europe and the rest of the world.

To help get through this rocky period, it is probably a good time to look at trimming any excess fat from our overheads and concentrate on efficiencies and effective marketing so that we keep ahead of the pack to win work.

The businesses that survived the 2008 economic crisis are the ones that tightened their belts but continued to market themselves to win what work there was to be had.

 

 

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Rental Income Taxation Changes

Rental Income Taxation Changes

Rental Income Taxation

If you are a landlord with residential properties there are certain changes on how much tax relief you will be able to claim from 6 April, 2016 and 6 April, 2017.

The Wear and Tear Allowance

Up until 5 April this year, landlords of furnished residential properties could claim 10% of the rent received (less certain expenses) against tax to cover maintaining and replacing the furnishings and equipment.

From 6 April, 2016 this has been scrapped and replaced by a new system allowing landlords of residential property to deduct only the actual costs incurred in replacing furnishings and equipment.

This change does not affect landlords of furnished holiday lettings as they are taxed differently.

Tax Relief on Mortgage Interest

From 6th April, 2017, the amount of tax relief you will be able to claim will be restricted to 20% of the mortgage interest or other finance costs.

If you are a basic rate tax payer, this change will make no difference to you.

However, for higher rate tax payers, you will no longer be able to claim 40% or 45% tax relief as now, you will only be able to claim 20%.

This change is being phased in over three years to help landlords who are higher rate tax payers as follows:

      • 6 April, 2017 to 5 April, 2018 the deduction from property income (as is currently allowed) will be restricted to 75% of finance costs, with the remaining 25% being available as a basic rate tax reduction
      • 6 April, 2018 to 5 April, 2019, 50% finance costs deduction and 50% given as a basic rate tax reduction
      • 6 April, 2019 to 5 April, 2020, 25% finance costs deduction and 75% given as a basic rate tax reduction
      • from 6 April, 2020 all financing costs incurred by a landlord will be given as a basic rate tax reduction

The changes in rental income taxation may deter some higher rate tax payers from investing in ‘buy to let’ properties. If you are affected, you should contact your accountant or financial adviser.

Please note that this change does not affect landlords of furnished holiday lettings.

Disclaimer

The above is not exhaustive and is for guidance only and you should consult your accountant or other professional adviser before taking action on any of the above. See the Disclaimer

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Auto Enrolment Earnings

I have been asked what the levels of auto enrolment earnings are that mean an employer has to set up a qualifying auto enrolment pension scheme.

Auto Enrolment Earnings

Although an employer does not have to automatically enrol employees earning less than the earning trigger for auto enrolment, an employee can choose to opt in.

Typically, a pub or café may have no employees earning above the auto enrolment earnings trigger of £10,000 per year.

However, they can choose to opt in and the small employer is burdened by additional employee costs and professional fees processing their payroll and auto enrolment obligations. See my post Auto Enrolment Burden on Small Businesses

Auto Enrolment Earnings and Employee Ages for Eligibility

The Three Employee Categories

Entitled Worker

  • Aged 16 to 74
  • Earn less than the qualifying lower earnings threshold of £5,824 a year (£486 per month or £112 per week)
  • An employer does not have to automatically enrol ‘entitled workers’. If the employee decides to opt in, the employer does not have to contribute to their pension fund.

Non-Eligible Jobholder

  • Aged 16 to 74
  • Earns more than £5,824 a year (£486 per month or £112 per week) but no more than £10,000 a year (£833 per month or £192 per week)

Other non-eligible jobholders:

  • Aged 16 to 21 or between State Pension age and 74
  • Earn more than £10,000 per year (£833 per month or £192 per week)

The employer does not have to automatically enrol ‘non-eligible’ jobholders. If the employee decides to opt in, the employer must contribute to their pension fund.

Eligible Jobholder

  • Aged between 22 and State Pension age
  • Earns more than £10,000 per year (£833 per month or £192 per week)

The employer must automatically enrol ‘eligible’ jobholders and contribute to their pension fund unless the employee decides to opt out.

Disclaimer

The above is not exhaustive and is for guidance only and you should consult your accountant or other professional adviser before taking action on any of the above. See the Disclaimer

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What Company Stationery Information?

company-stationery-information
Company Stationery Information
To limit personal liability and for tax purposes, many small businesses incorporate and become limited companies.

On incorporation, a company must provide company stationery information on letterheads, invoices, official orders, delivery notes, cheques and so forth.

Company websites must also provide certain company information.

Below, I have summarised some of the legal requirements of the Companies Act.

Information Required on Company Stationery

The following information must be clearly shown on company stationery:

    • The full name of the company as shown on the Certificate of Incorporation including the word ‘Limited’ or ‘Ltd’. See note below.
    • Place of registration: ‘registered in England & Wales’, ‘registered in Scotland’ etc. depending where it was registered.
    • The company registration number as shown on the Certificate of Incorporation.
    • The registered office address as recorded at Companies House and shown as the ‘registered office’ if the trading address is different.
    • All company cheques must show the word ‘Limited’ or ‘Ltd’ as above, if not, the signatory will be liable for the value of the cheque if it is not honoured.

Note: There is no difference between ‘Limited’ and ‘Ltd’. These two suffixes are interchangeable if the company has the full ‘Limited’ suffix on the Certificate of Incorporation. If, on the Certificate of Incorporation the suffix is ‘Ltd’, then only ‘Ltd’ can be used and not ‘Limited’.

Information Required on Company Websites

As with official company stationery, the company websites also have to include certain information as follows:

  • The full name of the company as shown on the Certificate of Incorporation including the word ‘Limited’ or ‘Ltd’. See note above.
  • Place of registration: ‘registered in England & Wales’, ‘registered in Scotland’ etc. depending where it was registered.
  • The company registration number as shown on the Certificate of Incorporation.
  • The registered office address as recorded at Companies House and shown as the ‘registered office’ if the trading address is different.

This information does not need to be on every page but it must be easy to find. Some web sites show the information in the footer section of every page but it can be simply put on the Contact page.

Disclaimer

The above is not exhaustive and is for guidance only and you should consult your accountant or other professional adviser before taking action on any of the above. See the Disclaimer

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Auto-Enrolment Burden on Small Businesses

Auto-Enrolment

The Auto-Enrolment burden of workplace pensions will be forced on even the smallest business between now and the end of 2017.

Auto-enrolment sounds great, “we’re in” rings from the TV publicity. But it can be heart ache for small businesses that can ill afford such a financial burden.

For career politicians that have never had a proper job, it’s fabulous to come up with these great ideas to encourage pension savings. This perhaps opens up an opportunity for the Government to release it’s State pension responsibilities in the future and pass that responsibility onto employers.

Indeed, for small one person businesses, it can well discourage them to expand and take on their first employee.

Let’s look at the costs for both the employee and employer:

By law you must pay at least the minimum employer contribution in the last column above with the employee making up the difference between that figure and the total minimum contribution in column 2.

I have defined ‘qualifying earnings’, ‘total pay’ and ‘basic pay’ further down this post.

Let us look at a scenario of a small business with one employee earning £288 basic pay for a 40 hour week (£7.20 an hour National Living Wage). The following table shows the minimum annual contributions that have to be paid:

On op of the employer contribution, the business owner will also have to pay the costs of running auto-enrolment. Unless they do it themselves and risk heavy penalties, they will have to use a payroll bureau. Most, if not all, payroll bureaus will insist on doing both the normal payroll and auto-enrolment as one without the other is destined for disaster!

So, a small employer with one weekly paid employee forced into using a payroll bureau because of auto-enrolment may incur the following typical additional costs:

Payroll processing at £16.50 per week plus £22.00 year end processing = Total £880.00 per year

Auto-enrolment processing £31.50 per month = £378.00

Total costs before any contribution to Auto-Enrolment pension scheme £1,258.00

What goes into the pension fund based on employee working 40 hours a week at 7.20 (£14,976 PA):

Annually up to Sept 2017 – £449.28

Annually up to Sept 2018 – £898.56

Annually from October 2018 – £1,347.84

You do the sums, it costs the employer nearly as much in extra overhead after October 2018 as goes into the pension pot.

There may also be a £35 or more set-up fee for each employee and some pension providers like The Peoples Pension are charging the employer a £500 set-up fee. I know NEST Pensions are not making a set-up charge to employers yet. With set-up charges, ongoing processing charges etc, small employers are being hammered with extra employment costs many cannot afford.

Possible extra burden for the small employer with one weekly paid full-time employee on National Living Wage after October 2018 is £1,857 before set-up costs and all that goes into the employees pension scheme from the employer (before pension fund management charges) is £599. It costs the small employer with one employee as above £1,258 more than the employer contributes.

This really is a true burden on small businesses.

Let’s define the terms ‘qualifying earnings’, ‘total pay’ and ‘basic pay’:

Qualifying earnings’ is the name for a band of earnings you can use to calculate pension contributions. For the 2016/17 tax year, it’s all an employee’s earnings between £5,824 and £43,000.

Total pay’ means all payments made to a worker, including their salary/wages, plus any commission, bonuses, overtime and so on.

Basic pay’ means a worker’s salary/wages and statutory payments like sickness and maternity pay, but it excludes commission, bonuses, overtime and so on.

Employers and employees can pay more than the minimum contribution but the upper limit depends on your pension fund provider.

For more information on what you need to contribute, visit The Pensions Regulator relevant web page.

Disclaimer

The above is not exhaustive and is for guidance only and you should consult your accountant or other professional adviser before taking action on any of the above. See the Disclaimer

 

 

 

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EU In or Out?

The EU has been part of our lives for more than forty years, but is it now time for a divorce or for reconciliation?

EU

I am reading a book that I feel will help me decide whether or not to vote ‘In’ or ‘Out’ in June’s EU Referendum.

Here is a link to the book Europe In or Out: Everything You Need to Know

What will happen if Britain leaves the EU – and how will it affect you?

Europe: vital for Britain’s economy and global standing or a bureaucratic monster hell-bent on destroying our national sovereignty? And why is no one talking about what leaving Europe would actually mean?

Addressing the real issues surrounding a potential exit from the EU – including jobs, travel, immigration, investment, sovereignty and justice – this fully updated and revised edition of David Charter’s essential guide investigates the consequences both for the country and for the person on the street.

A clear, comprehensive and compelling account of the impact of the EU and the implications of Brexit, this definitive, unbiased handbook, from an expert in the field, is essential reading for anyone with an interest in Britain’s future.

I hope the right decision is made by the British public in June, for business and our lives in general.

 

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Salary and Dividend Mix – What Your Left With

Salary and Dividend Mix

Let’s look at different director/shareholder salary and dividend mix and see what you would be left with after tax.

The truth is, it will be less than last year due to the changes to the tax on dividends and Employment Allowance but what we want is to be left with as much as possible after the new rules come into force after 6 April, 2016.

Let’s assume you want to have a gross income up to the 40% higher rate band and you are a sole director/shareholder with no other employees (typical of many consultants and freelancers):

Option One (annual salary to NI threshold)

Gross salary £8,060 (no NI or tax to pay)

Dividends £7,940 (£5,000 plus balance of personal allowance tax free)

Dividends £27,000 (taxed at 7.5%)

Total gross income £43,000

Less tax on £27,000 of dividends at 7.5% = £2,025

What you are left with is £40,975

Company gets 20% tax relief on £8,060 salary = £1,612

Overall net remuneration and tax saved by the company is £42,587

Option Two (salary to tax threshold)

Gross salary £11,000 (no tax to pay)

Dividends £5,000 (tax free)

Dividends £27,000 (taxed at 7.5%)

Total gross income £43,000

Less tax on £27,000 of dividends at 7.5% = £2,025

less employees NI at 12% on £2,940 = £353

What you are left with £40,622

If you cannot claim the Employment Allowance then the company has to pay 13.8% Employers NI on £2,888 = £398.54

Company gets 20% tax relief on £11,000 salary plus the £399 Employers NI = £2,280

Overall net remuneration and tax saved (after deducting Employers NI) by the company is £42,503

Option One is marginally better and benefits from less administration paying National Insurance Contributions to HMRC.

If, however, you have other employees and qualify for the Employment allowance, then Option Two is marginally better as the company will not have to pay Employers NI contributions.

Option One is likely to be more beneficial for many consultants and freelancers who only employ themselves as directors.

Again, another affect would be if you have other employees that use up the Employment Allowance and then option one is better again.

Remember: Please get advice from your accountant or payroll bureau before taking action on the above

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Sole Directors Optimum Salary and Dividend 2016/17

Salary and Dividend

Many consultants, freelancers and other small limited companies operate as a one person/director company with no other employees.

For these business owners we look at the optimum salary and dividend mix each year. unfortunately, with changes to the Employers Allowance together with changes to the taxation of dividends from 6 April, 2016 more tax will have to be paid.

 

Optimum Salary and Dividend

If you have no employees other than yourself as the sole director (and therefore cannot claim the £3,000 Employment Allowance) then it may be better to take a salary up to the National Insurance Primary threshold (PT) and the balance in dividend.

You have to earn above the National Insurance Lower Earnings Limit (2016/17 £112 per week £486 per month) to keep your entitlement to future state benefits and pension. There is no National Insurance to pay at this level until you exceed the National Insurance Primary Threshold (2016/17 £155 per week or £671.66).

Due to the changes coming in from the 6 April, 2016, if you are the sole director/employee of your business, I suggest a monthly gross salary of £670 which is just below the threshold for paying Employee and Employer National Insurance contributions and take the balance in dividend.

From 6 April, you will have to pay some tax on the dividend but this can still show a small saving on going through the payroll. See Dividends Tax Shocker.

There are different optimum salary and dividend mixes for other circumstances such as if you have other employees or directors. contact your accountant or payroll bureau for advice.

Remember to get advice from your accountant or payroll bureau before taking action based on the above

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National Living Wage

National Living Wage

National Living Wage

The Government’s National Living Wage is due to be introduced on 1st April 2016 for all working people aged 25 and over, and will be set at £7.20 per hour. The current National Minimum Wage for those under the age of 25 will continue to apply.

Employees who have been covered by the National Minimum Wage, and are 25 years old and over, will be covered by the National Living Wage.

The new National Living Wage is different from the Living Wage. The National Living Wage, as with the National Minimum Wage, is a legal minimum hourly rate of pay and is updated by the Government annually. Remember, the National Minimum Wage still applies to employees aged 24 and under. 

The Living Wage is set independently of HMRC by the Living Wage Foundation and this is calculated according to the basic cost of living in the UK. Employers are not legally obliged to pay this higher Living Wage.

As much as I feel that employees should be fairly remunerated, many small businesses just can’t afford to pay a further 50 pence an hour just six months after the last statutory increase. The National Living Wage is a 7.5% increase on the previous £6.70 National Minimum Wage set in October last year!

The increase in the Employment Allowance will help reduce the impact for small employers that have full time employees. It may not help employers that have part-time workers that do not reach the National Insurance threshold of £156 per week.

Pubs, restaurants, cafés and small hotels are likely to be badly affected financially as they tend to employ a lot of part time staff earning less than £155 per week – we may have to pay more as customers!

There are penalties for non compliance and you should get advice from your accountant or payroll bureau who you should consult before taking action on the above.

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Changes to Employment Allowance

Employment Allowance

There is good news and bad news from 6 April, 2016 when important changes to the Employment Allowance come into place.

Since 6 April, 2014 employers have been able to reduce the amount of Employers’ National Insurance contributions (NICs) they pay for their employees by up to £2,000. This is called the ‘Employment Allowance’.

At the moment, businesses don’t have to pay any employer National Insurance contributions at all if they usually pay less than £2,000 a year.

The good news, from 6 April 2016, is that the relief the employer receive’s will go up from £2,000 to £3,000. This means that small businesses will not have to pay the first £3,000 of Employers’ National Insurance contributions for the PAYE tax year.

Note: This allowance is an annual allowance for the whole business – not per employee!

Now for the bad news: sole director employee businesses – i.e. a limited company with just one employee who is also the owner director, will no longer be able to claim the Employment Allowance.

This will affect a lot of consultants and freelancers.

The bad news gets worse!

HMRC today advised me:

If the sole owner director is employed as an employee and pays Class 1 National Insurance, the Employment Allowance can only be claimed if at least one other person is employed in the business and is paid above the Class 1 National Insurance Secondary Threshold (£156.00 per week).

Basically this means that the £3,000 Employment Allowance for Employers Class 1 National Insurance contributions can only be claimed if at least two or more directors or employees are paid above £8,112.00 per annum.

I will look at other scenarios that may put a spanner in the works and prevent employers claiming the Employment Allowance such as:

  • What if the second employee leaves, thus leaving a sole director employee?
  • Can sole traders and partnerships claim the Employment allowance if they employ one person?

Remember, consult your accountant or payroll bureau before taking action based on the above 

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Customer Relationship Management – CRM

CRM

The easy online CRM for doing business.

Customer Relationship Management or CRM is a fantastic tool to keep track of the people and companies you do business with and communications with them, opportunities in the pipeline, and what needs to be done when.

A couple of years ago I started using Capsule as it integrates with my KashFlow bookkeeping system and MailChimp. It is easy to use and there is a free version and an inexpensive £8.00 plus VAT monthly subscription to the Professional version.

Check out my Customer Relationship Management page or visit the Capsule site for a full preview.

For a free basic version or a free 30 day trial of the Professional version that I use, click on the banner below:   CRM

 

 

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Auto Enrolment Staging Date

Retirement NestEgg

It is important to find out your pension auto enrolment staging date (start date) as early as possible to plan for the start.

Employers that had PAYE schemes before 1 April, 2012 can find their start date by entering your PAYE reference on the Pensions Regulator finding your staging date site page.

If you are a new employer and got a PAYE reference after 1 April, 2012 your staging date can be found from the table below:

Staging dates for employers who set up after 1 April 2012

Date PAYE income first payable Staging date
Between 1 April 2012 and 31 March 2013 1 May 2017
Between 1 April 2013 and 31 March 2014 1 July 2017
Between 1 April 2014 and 31 March 2015 1 August 2017
Between 1 April 2015 and 31 December 2015 1 October 2017
Between 1 January 2016 and 30 September 2016 1 November 2017
Between 1 October 2016 and 30 June 2017 1 January 2018
Between 1 July 2017 and 30 September 2017 1 February 2018

Remember, before taking action based on any part of this post, please seek advice from your accountant or payroll bureau.

 

 

 

 

 

 

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Employment Terms – terms and conditions of employment

Payroll and Salaries

As a minimum, an employer should by law provide an employee with their employment terms, (known as a “statement of terms”) containing the main terms and conditions of employment within two months of starting work.

The statement of terms is the absolute minimum required by law and does not protect employers properly. For this reason an employment contract is far better for both employers and employees.

If only the bare minimum “statement of terms” is provided to a new employee, the following key information must be included in a single document which is known as the “principle statement”

  • Name of employer and employee.
  • Date employment and continuous employment started.
  • Job location.
  • Pay and whether it’s weekly, monthly etc.
  • Working hours.
  • Holiday entitlement.
  • Job description / job title.
  • Details of any collective agreement that directly affect the employee’s conditions of employment.

For details on the following information employers may provide other documents such and staff handbooks, or staff intranet sites for:

  • sick leave and pay entitlement
  • pensions and pension schemes
  • disciplinary and grievance procedures
  • appeals procedure under the disciplinary and grievance procedures.

We can provide payroll bureau clients with a Contract of Employment template for specific types of employee and if you want additional information on the bare minimum “statement of terms” you can check out advice provided by ACAS.

Remember, before taking action based on any part of this post, please seek advice from your accountant, payroll bureau or legal advisor.

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Claiming VAT Back on Mileage Allowance

Aston Martin Vantage Racing Team Car

An employer can claim input VAT back on the fuel element of the tax free Mileage Allowance and Fuel Allowance. Input tax is calculated by dividing the fuel element of the mileage allowance by 6 (for the current VAT rate of 20%).

Here is some information provided by HMRC:

The allowance paid to employees must be based on mileage actually done. Business records must be kept to back this up. The business must retain records for each employee claiming a mileage allowance to show:

  • the mileage travelled;
  • whether the journey is both business and private;
  • the cylinder capacity of the vehicle;
  • the rate of mileage allowance; and
  • the amount of input tax claimed.

HMRC officers may check what rates employers have used to calculate claimable input tax on the fuel element of mileage allowances paid to their employees. Current rates as published by motoring associations such as AA or RAC are generally acceptable. HMRC will also accept HMRC’s own advisory rates which are published twice a year and can be found at Company Cars – advisory fuel rates.

Some employers cap employees to a particular level of allowance. For example, the employer may decide that employees with cars with engines over 2000cc will receive only the rate paid for vehicles between 1400 and 2000cc. If this happens HMRC will only allow input tax recovery on the mileage rate that the employer has paid to the employee.

Speak to your accountant for specific advice based on your circumstances before acting on the information above

 

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Tax Free Mileage Allowance

Aston Martin Vantage Racing Team Car

HMRC allows you to pay your employees and directors a tax free mileage allowance for using their own vehicle for business journeys. Provided the payments are no more than HMRC’s mileage approved rates below there will be no tax to pay on the payments and they do not have to be reported as a benefit on forms P9D or P11D.

Below is information provided by HMRC:

Mileage Allowance Payments

Mileage Allowance Payments (MAPs) are what you pay your employee for using their own vehicle for business journeys.

You’re allowed to pay your employee a certain amount of MAPs each year without having to report them to HMRC. This is called an ‘approved amount’.

Work out the Value

To calculate the ‘approved amount’, multiply your employee’s business travel miles for the year by the rate per mile for their vehicle below.

Tax free rates per business mile

Type of vehicle First 10,000 miles Above 10,000 miles
Cars and vans 45p (40p before 2011 to 2012) 25p
Motorcycles 24p 24p
Bikes 20p 20p

Example:

The employee travels 12,000 business miles in their car – the approved amount for the year would be £5,000 (10,000 x 45p plus 2,000 x 25p).

Passenger payments

If your employee carries another employee in their own car or van on a business journey, you can pay them passenger payments of up to 5p per mile tax-free.

It does not matter if your employee uses more than one vehicle in a year – it’s all calculated together.

What to report to HMRC and pay

Who gets the benefit What to do What to pay
Employees at a rate of less than £8,500 a year Report on form P9D Add anything above the ‘approved amount’ to the employee’s pay, and deduct and pay tax as normal
Employees at a rate of £8,500 or more a year Report on form P11D Add anything above the ‘approved amount’ to the employee’s pay, and deduct and pay tax as normal
Directors Report on form P11D Add anything above the ‘approved amount’ to the employee’s pay, and deduct and pay tax as normal

Anything below the ‘approved amount’

If your employee gets paid less than the above rates, you won’t have to report to HMRC or pay tax, but:

  • your employee will be able to get tax relief (called Mileage Allowance Relief, or MAR) on the unused balance of the approved amount
  • you can make separate optional reports to HMRC of any such unused balances under a scheme called the Mileage Allowance Relief Optional Reporting Scheme (MARORS) – contact your HMRC office to join the scheme.

Speak to your accountant for specific advice based on your circumstances before acting on the information above

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New Advisory Fuel Rates

Aston Martin Vantage Racing Team Car

From 1 December, 2015, HMRC lowered the Advisory Fuel Rates (AFR) applying to employees and owner directors using a company car.

 

 

Advisory Fuel Rates from 1 December 2015

These rates apply from 1 December 2015. You can use the previous rates for up to 1 month from the date the new rates apply.

Engine size Petrol – amount per mile LPG – amount per mile
1400cc or less 11 pence 7 pence
1401cc to 2000cc 13 pence 9 pence
Over 2000cc 20 pence 13 pence
Engine size Diesel – amount per mile
1600cc or less 9 pence
1601cc to 2000cc 11 pence
Over 2000cc 13 pence

Hybrid cars are treated as either petrol or diesel cars for this purpose.

Below is information provided by HMRC:

When you can use the mileage rates

The rates only apply when you either:

  • reimburse employees for business travel in their company cars
  • require employees to repay the cost of fuel used for private travel

You must not use these rates in any other circumstances. If you use them correctly you will not need to apply for a dispensation to cover the payments you make.

Reimburse employees for business travel in their company cars

If you pay a rate per mile for business travel no higher than the AFR, for the particular engine size and fuel type, HM Revenue and Customs (HMRC) will accept there is no taxable profit and no Class 1A National Insurance to pay.

You can use your own rates which better reflect your circumstances if, for example, your cars are more fuel efficient, or if the cost of business travel is higher than the guideline rates.

If you pay rates that are higher than the advisory rates and can’t demonstrate the fuel cost per mile is higher, there is no fuel benefit charge if the mileage payments are solely for miles of business travel. Instead, you will have to treat any excess as taxable profit and as earnings for Class 1 National Insurance purposes.

Require employees to repay the cost of fuel used for private travel

If you have correctly recorded all miles of private travel and used the correct rate (or anything higher) to work out the cost of fuel used for private travel that the employee must repay to you, HMRC will accept there is no fuel benefit charge.

The advisory rates will not be binding where you can demonstrate that employees cover the full cost of private fuel by repaying at a lower rate per mile.

 

 

 

 

 

 

Remember to speak to your accountant before acting on the above information

 

 

 

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Ted Talk-Want to be happy? Be grateful

Ted Talk – David Steindl-Rast: Want to be happy? Be Grateful.

The one thing all humans have in common is that each of us wants to be happy, says Brother David Steindl-Rast, a monk and interfaith scholar. And happiness, he suggests, is born from gratitude. An inspiring lesson in slowing down, looking where you’re going, and above all, being grateful.

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Auto-Enrolment 21 Point Employer Checklist

Direct Debit

 

 

 

 

 

 

 

Here is another useful Auto-Enrolment 21 point employer checklist and you can download it at the bottom of the page:

Download (PDF, Unknown)

See also:

Workplace Pension Auto-Enrolment page

It is important to seek advice from your accountant, payroll bureau and IFA before taking action on the contents of this checklist.

 

 

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What is a Direct Debit Service User Number?

Direct Debit

Ever thought what Service User Number (SUN)? If you would like to improve your cash flow with a direct debit scheme for small businesses then check out the answer to what is a direct debit Service User number?

Look how your cash flow could benefit from a direct debit scheme aimed at small businesses whether you have a handful of customers or thousands – the scheme I use for my small accountancy practice.

I would appreciate it if you would please mention The Dales Accountancy Service if you contact my scheme provider so that they can monitor where referrals have come from.

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