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Updates from the Clayton & Brewill team.

2016/17 Year end reporting – things to consider

23rd March, 2017

As many companies approach the end of their financial year, it’s important that as well as dealing with the usual year end procedures, that they also consider any changes that come into force in April.

2016/17 year end reporting - things to consider National Minimum and National Living Wage increases due from 1 April 2017

 The hourly minimum wage a worker is entitled to depends on their age and whether they are an apprentice (on a recognised scheme). Previously the National Minimum Wage has increased on 1 October annually, but this has now been streamlined to run alongside the National Living Wage which was introduced on 1 April 2016.

The National Living Wage for those aged 25 and over will increase from £7.20 to £7.50 per hour.

The National Minimum Wage will also increase as follows:

  • for 21 to 24 year olds – from £6.95 per hour to £7.05
  • for 18 to 20 year olds – from £5.55 per hour to £5.60
  • for 16 to 17 year olds – from £4.00 per hour to £4.05
  • for apprentices – from £3.40 per hour to £3.50*.

*This rate is for apprentices age 16-18 and those aged 19 or over who are in their first year of apprenticeship.

End of year reporting

It’s nearly time to prepare for making your last Full Payment Submission (FPS) and/or Employer Payment Summary (EPS) of the year.

You should send your last FPS of the year on or before your employees’ last payday for the tax year. You need to put ‘Yes’ in the ‘Final submission for the year’ field if your payroll software allows this. This tells HMRC that you have submitted everything you expected to send for the tax year ending 5 April 2017, and they can finalise their records for you and your employees.

Some commercial payroll software won’t let you put the ‘Yes’ indicator on an FPS. If that’s the case, send your last FPS and then send an EPS with the indicator ticked to state that this is the final submission for the tax year. You can also send an EPS with the indicator ticked if you forgot to put the indicator on your last FPS, you didn’t pay anyone in the final pay period of the tax year or you sent your final FPS early and you didn’t pay anyone for one or more full tax months in the last tax year.

If you find there are amendments to be made to payroll after your final submission has been made, you can still amend through your payroll software as long as this is done before 20 April. Please re-work your payroll and make fresh submissions to HMRC in the usual way. Any amendments required after this date should be made via an Earlier Year Update through your payroll software (if available) or alternatively using the HMRC Basic PAYE Tools module.

P60’s are due to all employees who are still employed by you at 5 April.

You have until 31 May 2017 to distribute these, but did you know that you can now send forms P60 and P45 electronically to your employees?  Sending these forms electronically means you will no longer need to obtain paper versions from HMRC or your own payroll software supplier and may help save you time and money by not having to use manual processes to complete and distribute them.

Tax-Free Childcare

Tax-Free Childcare launches for parents from early 2017 as a new Government scheme to help working families with their childcare costs.

The scheme will allow eligible parents to open online childcare accounts to make payments direct to their registered childcare providers. For every £8 parents pay in to these accounts, the government will add £2, and the total amount in the account can only be spent on childcare. Parents can receive up to £2,000 in government support per child, per year, or £4,000 for disabled children.

Are you a childcare provider?

Over 100,000 registered childcare providers across the UK have received invitations to sign up to Tax-Free Childcare. Letters were posted throughout September and October 2016, containing a unique sign up code.

Childcare providers need to sign up for Tax-Free Childcare to be able to receive payments from parents, via the scheme. You should act now to sign up, using the unique code contained in your invitation.

You will need your unique sign up code, and once in the secure site you will need to:

  • confirm your unique taxpayer reference (UTR) number; or National Insurance number, if you are a nanny and don’t have a UTR
  • provide bank details for the account you wish to receive Tax-Free Childcare payments into.

And for wider employers?

Employers should note that parents (or a household) cannot claim both childcare vouchers and Tax-Free Childcare.

A guide has been produced for parents, which sets out how the current Employer Supported Childcare scheme will remain open to new entrants until April 2018. After April 2018, parents already registered for Employer-Supported Childcare will be able to continue using it as long as employers continue to offer it.

Construction Industry Scheme (CIS) subcontractor verifications

Under the Construction Industry Scheme (CIS), contractors deduct money from a subcontractor’s payments and pass it to HM Revenue and Customs (HMRC).

The deductions count as advance payments towards the subcontractor’s tax and National Insurance.

Contractors must register for the scheme. Subcontractors don’t have to register, but deductions are taken from their payments at a higher rate if they’re not registered.

From April 2017 HMRC will no longer accept any telephone calls to verify subcontractors and this must now be done online:

This change is one of a series of improvements they have made to CIS to increase efficiency and accuracy, and to reduce administration, one of these being the ability to make amendments to returns online rather than having to make a telephone call to the CIS helpline.

For further advice on your 2016/17 year end reporting or any forthcoming changes, please don’t hesitate to get in touch with our friendly team, either by phone on 0115 9503044 or click here to email us.



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