Payroll & PAYE Archives - Page 2 of 2

News,May 2018

What is RTI (Real Time Information)?

George04/01/2023Payroll & PAYE , Pension , Personal Tax

When you are an employer of large or small businesses in the UK, there is a mandatory thing to do for you is to inform HMRC about the details of your employees. For this procedure to be successful for beginners, a basic understanding of real-time information is important to learn. In a nutshell, real-time information is a method of reporting the payroll to HMRC in real-time. The method of real-time information is done through an electronic medium by the employers before they make the payments of wages and salaries to their employees. It has been a mandatory part of the business for employers to inform HMRC about the wage details every month. It has become a must since 2013. Moreover, if the employer makes any mistakes in the submission or the reporting is not done on time, HMRC will charge hefty amount of fines and penalties. Normally, employers will likely require real-time information-enabled software and a good connection to the internet to complete the procedure. This software and connection are used to do the online PAYE filing. There is free software by HMRC that can be used by employers who have fewer employees. However, there is commercial software available that is easy for employers to use if they have a large number of employees. We have got you covered with basic information about real-time information. This involves the discussion of what real-time information is, how to ensure your business is a real-time complaint, and what the penalties are in case you fail to file. Reach out to our smart and clever-minded guys to get your real-time information queries answered quickly. We will help to decide how to deal with your business problems in the UK. What is Real-Time Information (RTI)? The main purpose of the real-time information is to report the salaries, wages, national insurance, and PAYE to HMRC. Before the business period of 2013, there used to be a form P35 for the purpose of sending details of employees, how much they are getting paid, and how much is being sent to HMRC in the form of national insurance and tax. However, after 2013, the methodology changed, and now the employers are required to send these details to HMRC before the wages are transferred every month. Moreover, this is also explained by the name that the employers are required to share the information in the actual meaning of real-time before they transfer the wages. Waiting for the tax year end is not practical for the employers as well as HMRC. How to Ensure that Your Business is RTI Compliant? Do you want to outsource your payroll to specific service providers or accountants? You must ensure, before hiring one, how they are going to make your business real-time information compliant. Some of the businesses use the software payroll already. Get into close details of how your accountant or service provider is getting benefits of using the software for this purpose. On the other hand, some businesses are more inclined towards using desktop software. In this scenario, you normally get a software update every now and then. You will have to install the upgraded version and its benefits. Moreover, some businesses use cloud-based software, and the service provider will be seamless during this method because of the updated technology. What is the Relation between the Quality of Payroll and Real-Time Information (RTI)? The main purpose of the payroll data is to ensure that the data you provide during the audits is upgraded and accurate as well. Here comes the helping role of real-time information, as it helps to record the data and make records of every salary that you transfer to your employees. This information is further submitted to HMRC. These records must match for a standard accuracy level. In case the records are not being matched, you are being asked to help identify the errors and rectify them on time. Before HMRC finds them out and it becomes trouble for you. You might even end up paying a hefty amount in the form of fines and penalties. Penalties and Fines of HMRC in the Case of Submission Failure In case a business fails to submit the report on time, there is no escape from the penalties of HMRC. Whether you made errors while doing the process of filing or you failed to do the submission before you paid wages and salaries to your employees in a tax month, be ready to pay extra in such a month. Many of you must be wondering about the number of penalties. Well, this depends on the size of your business, which will decide your penalty. The number of employees hired by an employer will also matter in this regard. £100 for the employee count between 1 to 9. £200 for the employee count between 10 to 49. £300 for the employee count between 50 to 249. £400 for an employee count of 250 or more. The Bottom Line Now that you have gathered a fair amount of information about the use of real-time information, we can bring the discussion towards wrapping up. Real-time information is important for all businesses to inform HMRC before the wages and salaries are transferred to the employees. However, the conditions vary for every business type and size. In case you fail to do the procedure on time, you will have to deal with a hefty amount of fines and penalties charged by HMRC. This can put you in serious circumstances. We hope these few minutes of reading will help you to develop a better understanding of the benefits of using real-time information for your small business needs. Our team of professional members loves to hear about your business problems and find out the possible and suitable solutions quickly for small businesses’ real-time information problems. Call us or email us today. Disclaimer: The general information provided in this blog about the use of real-time information includes text and graphics. It does not intend to disregard any of the professional …

Can I be Self-Employed and Employed at the Same Time?

George18/10/2021Payroll & PAYE , Sole Trader , Taxation

If you’re looking for a way to increase your income while still working full-time, you might be thinking if you can be self-employed and employed at the same time. The short answer is a resounding yes! If you’ve already had a full-time job while running your own business, you’re probably aware of the liabilities that come with it. Therefore, if you have never been through this situation, then read this blog till the end! We will inform you about its advantages, the tax to pay with, and its further details. So, let’s start! Our accountants at CruseBurke are qualified and cost-effective! We save your time, money, and stress by handling all your finances and business problems in no time! So, allow us to do this at an affordable package! Can I be Self-employed and Employed at the Same Time? Yes, you can. For instance, you work for an employer/company throughout the day, but in the evenings or at night, you work for your own business. When you run your own business and are solely responsible for its success or failure, you are considered self-employed. On the other hand, you are an employee or employed when you work for an employer on their own payroll and you are paid through it. If you fall under both categories, you are both self-employed and employed at the same time. The money you earn from your job will be taxed under Pay As You Earn, and you’ll need to file a Self-Assessment Tax Return to declare the income you made from your own business. Advantages of Being Self-employed and Employed The advantages are valuable, although they are simple. One of the main reasons is taxation. Several employment ways and forms of income are taxed differently. So, by taking advantage of your possibilities, you can save your money. Moreover, having your own business while working for someone else can be a great source of prosperity and mental satisfaction that you will not find anywhere else. How Does Tax Work If You are Self-employed and Employed? The income tax and NI (national insurance) implications can be complicated in case you are self-employed and working for another employer at the same time or are changing from self-employed to employed or vice versa. You have to inform HM Revenue & Customs immediately as you become self-employed even if you are also working for someone else at the same time or you have already completed a tax return every tax year. You should not inform them late (when filing a tax return). We can register you as self-employed to HMRC on your behalf! Fill out this form and let us handle everything! After registering, every year, you will be required to complete a tax return. You will enter your self-employment earnings as well as any allowable expenditure incurred details in the tax return. This will permit HMRC to calculate the amount of your income tax and NI you must pay. If you have file your tax return you must pay the tax amount at the end of the tax year. Am I Exempt from PAYE If I’m Self-Employed You are exempt from PAYE if the following case applies to you: You are doing business for yourself and are liable for its success and failure and you can make a profit or a loss of your business. You can control what work you do, when, how, and where you do it. You can outsource the work to anybody else. Your employer agrees to a fixed commission for your work. You utilise your amount of money to purchase business things, cover operating expenses, and provide equipment and tools for your own work or the work of the employees you hire. In case you are a self-employed person, you must fill self-assessment tax return form once every year. Also, you have to pay HM Revenue & Customs twice a year ( in January and July). In some cases, you can pay just via PAYE. It means that your taxes will be automatically paid through it and there will be no risk of not meeting a deadline. To use PAYE, You must submit your tax return by October, 31st (manually). You can also submit it online by December, 30th. HM Revenue & Customs will collect the money automatically you owe via PAYE, in case you meet the conditions mentioned above; otherwise, pay through instalments. Unable to calculate your employed and self-employed tax? Let us handle this! What is a Self-Assessment Tax Return? If you are self-employed and do not pay income tax through Pay As You Earn, you must register for Self-Assessment. After the end of a tax year (5 April), self-employed businesses and individuals must file a Self-Assessment tax return to record their earnings. To fill out and submit your returns, you only need to keep track of your receipts and bank statements. HM Revenue & Customs will assess what you have to pay on the information you’ve provided. By the 31st of January, you have to pay your Self-Assessment bill. In addition, the amount of tax you are required to pay is based on your income tax band. You have to send a self-assessment tax return in case: You’re self-employed with a profit of over £1,000 You are a partner in a partnership Remember that submitting your tax return up to three months late will result in a £100 penalty. You will pay more if it is late for more than three months. Final Thoughts To summarise the discussion, we can say that you can be self-employed and employed at the same time, which has many simple but valuable advantages. However, you should be aware, that there are tax implications with this. PAYE is a system that deducts income tax and NICs from employees. But as a self-employed, you must pay tax and NI through Self-Assessment. Turn to us if you need any help with accounting, tax payroll, and other finance-related problems! We will solve you are all …

A Guide Based on How to Claim Overpaid Tax from HMRC?

George06/10/2021Payroll & PAYE , Personal Tax , Tax Issues

If you are looking for a significant source to know about how to claim overpaid tax from HMRC, then you just have found the right post. First, we will see the P800 tax calculation process of HM Revenue & Customs. This means that HMRC will automatically issue any tax repayment; you don’t have to claim it. But, you will need to make a claim in case you have overpaid tax and did not receive a P800 tax calculation from HMRC. Continue reading this blog to know more about how to claim overpaid tax from HMRC. Turn to CruseBurke for managing and recording finances and for claiming overpaid taxes! We have a team of skilled accountants who will handle everything with HMRC on your behalf. Contact us right away! When can I Overpay on Employment Income & Pension Income? If you get a pension income or employment income and pay your tax via PAYE, you might overpay tax. You can pay too much tax on employment income if: Your employer was utilising the incorrect tax code. At the same time, you have more than one job. Other income which HMRC taxes through your tax code has decreased. Your situations changed; for instance, you switched from part-time to full-time work. You have a new job, and for a time, you had an emergency tax code. You are a pupil who works during off days. You ceased working and had no taxable income or benefits for the remaining year. For a portion of the tax year, you have worked. You can overpay tax on pension income if: Your taxable income has decreased; You had more than one pension (more than 1 source of PAYE income). You overpaid tax on a total pension sum. Your pension provider was utilising the incorrect tax code; Your tax code contains the incorrect amount of state pension. What is a P800 Tax Calculation? The HMRC will get details about your total received income, amount of tax paid, and the value of received benefits-in-kind within the tax year from your employer or pension provider. With the help of this information, HMRC will automatically carry out a reconciliation in order to calculate you have paid the correct amount of tax. You will receive a P800 tax calculation by HMRC if they think you have not paid the correct amount of tax. Therefore, you have to check this calculation carefully because HMRC can have fewer or incorrect details to work out your tax accurately. In case HMRC thinks you have paid the extra tax, they will automatically issue you a tax repayment; you don’t need to claim it. And, if HMRC thinks you have not paid a sufficient amount of tax, they will write to you which explains how you can repay tax to them. How to Claim Overpaid Tax from HMRC for the Current Tax Year? You have to inform HMRC why you think you have overpaid tax before the end of the tax year. You have to tell only if you have paid too much tax through the Pay As You Earn (PAYE) system. You can call HMRC directly to inform them. You have to gather the following details before calling HMRC: Your name, job, address, and NI (National Insurance) number. For the current tax year, estimation of your income and pensions from every source. Your employer or pension provider details such as PAYE scheme reference number displayed on your payslip, or ask them for it. For future reference, do ensure you have kept a record of the following: Advisor name you spoke to Time and date of the phone call Communication between you and the advisor In order to support your claim, you may have to send some more details. HMRC will let you know about those details if needed. After processing your claim, HMRC will issue you a new tax code. It means if there is any refund, it will be added to your pension or wages, and you will automatically get the amount through the payroll. This will result in a tax refund or lower tax deduction through PAYE. You might have to claim a repayment directly from HM Revenue & Customs. This is when the refund is due towards the end of the tax year, and you have already received your final salary. Unable to claim your overpaid tax? Let us handle this! Conclusion We hope now you have understood how to claim overpaid tax for the current year. You will have to provide those above-mentioned details and extra details in order to support your claim. Therefore, you should keep a record of your income and paid taxes properly. And, we will recommend you to take help from a professional for recording your finances and claiming repayments. Reduce your business burden by letting us manage & record your finances! Our team could help you claim what is rightfully yours! So, Contact us now! Disclaimer: This article intends to provide general information on how to claim overpaid tax.

Payroll and PAYE – A Complete Guide For First Time Employers

George30/08/2021Payroll & PAYE , Personal Tax , Tax Issues

Payroll could be complicated for numerous foreign managers and companies that need to perform business transactions within the UK. So, in case you’ve got come to the point of setting up a payroll system and the thought of running PAYE fills you with fear, or you feel that you don’t know enough to make things right, then no need to worry as this straightforward blog will help you understand things better! This blog is based on the following essential steps to get the payroll done effectively. Enrol as an employer with HM Revenue & Customs Get yourself registered for PAYE Collect Workers details Utilise payroll software So let’s explore the details 1. Enrol as a Business Owner with HMRC First of all, make sure that whether you wish to enrol as a business owner. Ordinarily, you’ll have to do so if you are going to recruit your first employee or utilise subcontractors for development work. Moreover, you’ll have to be enlisted as a business owner if you’ve set up a local company and planned to pay yourself income as a director. Use this form to enrol as a proprietor. After becoming a business owner for the first time, you need to understand your legal obligations towards your employees. As a business owner, the charge and work obligations you have for your staff will depend on the contract you provide them and their employment status. HM Revenue & Customs have delivered a checklist for first-time business owners, which we suggest you read. Are you looking for a professional to help you with employment contracts or understand your responsibilities as a business owner? Then at CruseBurke, we have a team of skilled accountants that provides solutions to all your business problems! 2. Get yourself Registered with PAYE After registering and receiving your confirmation letter as a business owner by HMRC, you have to register online to pay taxes and NICs. This concept is termed PAYE. 3. Collect Workers details Make sure you collect all the necessary details from your new workers. You’ll require: Full name, DOB Start date National insurance number Home address Affirmation of whether they have other employments or a Student loan HMRC have made the data collection process simple as you’ll ask your new worker to fill within the online HMRC starter form. Before giving you all the required information, the newly hired employee will completes the starter form online, prints it out and sign it. 4. Utilise payroll Software The whole process will be automated with the help of a cloud-based payroll software. It will reduce your essential time and stress by taking care of tax calculations, NICs, your business stipend (if you’re entitled to one) and by producing payroll slips for workers. In addition, it will automatically generate your Real Time Information (RTI) reports submitting it to HM Revenue & Customs and reduces your burden by producing payslips for workers. Final Thoughts Famous software like QuickBooks, Sage and Zero provides you with packages that include payroll system with support. If you utilise one of these accounting software, it’ll make the payroll process easier for you. Tackling payroll by yourself is still daunting. Our payroll team can help you out with this. We are a team of professionals who offer training and support to help you get your payroll system up and running. So reach us now to save your time and grow your business like never before! Disclaimer: The content in this article is general in nature.