National Insurance Contributions for under 21s

If you employ anyone under 21 years of age (and over 16) please be aware that you use the correct National Insurance category letter to benefit from the new initiative. Since 6 April 2015, employers with employees under 21 years of age are no longer required to pay Class 1 NICs on earnings up to the Upper Secondary Threshold (UST) for those employees.

 
Class 1 secondary NICs will apply if the employee is earning above the UST. Employees will continue to pay the standard rate of primary Class 1 NICs through their salary. Please note that the zero rate does not apply to Class 1A or Class 1B NICs.

 
When assessing your employees’ secondary NICs, please note that there are seven National Insurance categories:
• M – not contracted-out standard rate contributions
• Z – not contracted-out deferred rate contributions
• Y – mariners not contracted-out standard rate contributions
• P – mariners not contracted-out deferred rate contributions
• V – mariners contracted-out salary related contributions
• I – contracted-out salary related standard rate contributions
• K – contracted-out salary related deferred rate contributions

 

Three of the new letters (V, I and K) will be removed in April 2016 in line with the ending of ‘contracted-out’ status in relation to salary-related occupational pension schemes.

 

As an employer, it is your responsibility to ensure the correct category letter has been applied based on the age and circumstances of the employee. The categories will also need to be monitored for age and salary changes.

 

Should you have any queries or wish to talk to me in further detail about it, I can be contacted on joannes@clayshawthomas.com or 01656 867167.

 

Source: HM Revenue & Customs 24/09/2015

New functionalities in Sage 50 Accounts

The latest version of Sage 50 Accounts includes major new functionalities in the features you use on a daily basis as well as access to a growing catalogue of brand new add-ons, so you can truly customise your accounting software to the needs of your business.

 

  1. Bank Feeds

This is a new and exclusive feature of Sage 50 Accounts and makes reconciling accounts and bank balances simple and error free.

 

  1. Get paid faster

A ‘pay now’ function on invoices enables your customers to pay you instantly, easily and securely.

 

  1. Improved error corrections

You can edit journals quickly and easily; you can un-allocate credits and payments from an incorrect invoice and track which users have edited transactions.

 

  1. Surfacing information

 

New columns and fields mean more efficient data analysis and reduced frustration.

 

  1. Drill down on aged debtors and creditors

 

A more streamlined process makes it easier to get insight into their cashflow at the click of a button.

 

  1. Streamlined dialogue boxes

 

The dialogue boxes make it clearer, simpler and more intuitive than before to find information quickly.

 

  1. Customise what you want to see

It is possible to customise exactly what you want to see when using the programme so that it will be remembered when you log out.

 

If you would like to talk to me about Sage 50 Accounts or would like to meet up to discuss your accounting requirements then please email me on lauaras@clayshawthomas.com or call 01656 867167.

Benefits of outsourcing your payroll

Processing salaries can sometimes feel complex and stressful and with the introduction of auto-enrolment for workplace pensions, this can often add to the stress.

Building your business is what you’re good at and want to keep doing. A dedicated payroll service will give you peace of mind, allowing you to carry on building your business.

Clay Shaw Thomas’ payroll team can provide you with an efficient and tailor-made payroll management service from time sheet through to payment, taking care of any complications regarding taxation, employment legislation and pension legislation so you don’t have to.

 

The benefits of outsourcing your payroll include:

  • Professional and experienced specialists who will manage the entire process.
  • Fully trained staff to provide a service in line with auto enrolment legislation, employment legislation, pension legislation and taxation.
  • Technical support.
  • Processed on time, every time.
  • Wealth of experience across a variety of types of business and size: sole trader, small business, large corporates.
  • No requirement to invest in specialist software and updates or train staff.
  • We manage the administration of PAYE, national insurance, statutory sick pay and maternity pay, customised payslips, completion of statutory forms for issue to employees and Inland Revenue, year-end returns, including P14, P60 and P35 and P11d.
  • Access to ePayslips, an electronic version of the traditional paper payslip which is accessible online from a secure website whenever an employee needs to access it.

 

If you would like to discuss your payroll requirements and find out how we can help you, please send me an email or you can contact me on 01656 867167.

Will dividend tax keep rising?

The Treasury revealed in July that the dividend tax credit would be replaced with a new tax-free allowance of £5,000 of dividend income for all taxpayers, which takes effect from April 2016. The Chancellor said at the time that the move would “simplify the taxation of dividends”. But is this just the start of increased dividend taxation? Smaller firms will already probably need to review how they pay directors, but will the need for these reviews increase in the future?

Accounting giant Baker Tilley analysed any potential forthcoming changes and said that there could be ‘unpleasant knock-on effects – especially for high-earners’ caused by these changes. They went on to say that:

“The Chancellor clearly wants to remove the tax advantages currently enjoyed by those operating their small businesses through a company – these changes won’t completely remove those advantages, but I would expect that over the next few years the dividend tax will be increased until it starts to be more expensive to operate through a company. The dividend changes will have an adverse effect on those family companies who have hitherto extracted profits by way of dividends. Next year they will almost certainly face a tax hike. This is no accident.”

The Government has set the dividend tax rates at 7.5% for basic rate taxpayers, 32.5% for higher rate taxpayers and 38.1% for additional rate taxpayers but there will be no tax credit. There will be an increase of 7.5% where dividend income exceeds £5,000.

Previously, individuals in receipt of dividends benefited from a 10% tax credit which for basic rate taxpayers meant they could enjoy their dividend tax free. Higher rate taxpayers paid an effective 25% tax rate.

Officials at HMRC said in an update that the £5,000 tax-free allowance would still be taken into account when assessing someone’s overall income for tax purposes.
The report said:

“The dividend allowance will not reduce your total income for tax purposes. However, it will mean that you don’t have any tax to pay on the first £5,000 of dividend income you receive. Dividends within your allowance will still count towards your basic or higher rate bands, and may therefore affect the rate of tax that you pay on dividends you receive in excess of the £5,000.”

National Minimum Wage

From Thursday 1 October 2015, the adult rate of the National Minimum Wage will rise by 20 pence from £6.50 to £6.70 per hour. The new apprenticeship rate will be set at £3.30 and represents a rise of 57 pence, the largest increase in the National Minimum Wage for apprentices.

From 1 October 2015:

  • the adult rate will increase by 20p to £6.70 per hour
  • the rate for 18 to 20 year olds will increase by 17p to £5.30 per hour
  • the rate for 16 to 17 year olds will increase by 8p to £3.87 per hour
  • the apprentice rate will increase by 57p to £3.30 per hour
  • the accommodation offset increases by 27p to £5.35

Employers must ensure all employees entitled to be paid national minimum wage are paid correctly from 1 October 2015.

Should you want to discuss this in further detail or need help with your company payroll please contact me on joannes@clayshawthomas.com or 01656 867167.