Newsletter - September 2019
In this month’s newsletter we consider on Customs EORI numbers, calls to simplify apprenticeships and advice for trusts. We also report on the latest guidance for employers and a reminder of self assessment deadlines. With the latest company car advisory fuel rates and the implementation of Strong Customer Authentication for payments there is lots to consider.
- Simplify apprenticeship funding
- HMRC issues Customs EORI numbers
- Trusts with small amounts of savings income
- Advisory fuel rates for company cars
- PAYE late filing and late payment penalties
- Self assessment deadlines
- HMRC latest guidance for employers
- Strong Customer Authentication
Simplify apprenticeship funding
The Institute of Chartered Accountants in England and Wales (ICAEW) has urged the government to simplify the complexities of accessing apprenticeship funding.
The Apprenticeship Levy took effect from 6 April 2017 and changed the way in which apprenticeships are funded. Larger employers are required to pay a levy of 0.5% of their annual pay bill. However an annual allowance of £15,000 is available so employers only pay the Levy if their annual pay bill is over £3 million. The Levy is reported and paid through Pay as You Earn (PAYE).
According to ICAEW, the benefits for non-levy paying employers are particularly enticing, with the government committing to paying 95% of its apprenticeship training costs, however, the complexities in accessing the funds are putting SMEs off applying. Apprenticeship funding is devolved across the UK.
Iain Wright, Director for Business and Industrial Strategy at the ICAEW, said:
'In our interactions with businesses up and down the country, we find SMEs more and more reluctant to run their own apprenticeship schemes due to the complexity of accessing Levy funds and the lack of flexibility built into the scheme.
'The SME sector has traditionally been a big recruiter of 16-18 year-olds for apprenticeships, so this is a concerning development which could mean that talented young people are unable to access the skills and training they need to prosper in the workplace.'
Source: ICAEW news
HMRC issues Customs EORI numbers
In order to try and ensure that businesses are ready to trade post-Brexit, HMRC is automatically enrolling them in the customs system.
HMRC has confirmed that more than 88,000 VAT-registered businesses across the UK will be allocated an Economic Operator Registration and Identification (EORI) number in order to enable them to keep trading with customers and suppliers in the EU after the UK has left.
The government announced that 72,000 businesses have already registered for EORI numbers and numbers will be allocated to VAT-registered businesses to speed up the rollout of the scheme and help ensure the smooth transit of goods.
EORI numbers are a unique ID number allocated to businesses that enables them to be identified by Customs authorities when doing business with other traders.
HMRC has warned that if businesses do not have an EORI number post-Brexit, they will be unable to continue to trade with EU Member States.
Source: GOV.UK news
Trusts with small amounts of savings income
In the latest Trusts and Estates Newsletter HMRC has confirmed the continuation of the interim arrangement for interest reporting.
In 2016 the requirement for payers to deduct tax at source on bank and building society interest was removed and income from these sources is now paid gross. Due to this change, trustees and personal representatives had increased reporting requirements.
HMRC introduced an interim arrangement so trustees do not have to submit returns, or make payments under informal arrangements, where the only source of income is savings interest and the tax liability is below £100.
HMRC has confirmed that these arrangements have been extended to include the 2019/20 and 2020/21 tax years. The situation will continue to be reviewed in the longer term.
Contact us for help with trusts.
Source: GOV.UK Newsletter
Advisory fuel rates for company cars
New company car advisory fuel rates have been published which take effect from 1 September 2019. The guidance states: 'You can use the previous rates for up to one month from the date the new rates apply'. The rates only apply to employees using a company car.
The advisory fuel rates for journeys undertaken on or after 1 September 2019 are:
|1400cc or less||12p|
|1401cc - 2000cc||14p|
|1400cc or less||8p|
|1401cc - 2000cc||10p|
|1600cc or less||10p|
|1601cc - 2000cc||11p|
HMRC guidance states that the rates only apply when you either:
- reimburse employees for business travel in their company cars or
- require employees to repay the cost of fuel used for private travel.
You must not use these rates in any other circumstances.
The Advisory Electricity Rate for fully electric cars is 4 pence per mile. Electricity is not a fuel for car fuel benefit purposes.
If you would like to discuss your car policy, please contact us.
Source: GOV.UK AFR
PAYE late filing and late payment penalties
HMRC has confirmed that it will continue its risk-based approach to payroll Real Time Information (RTI) late filing and late payment penalties this tax year.
Rather than late filing and late payment penalties being issued automatically, HMRC will continue to issue them on a risk-assessed basis during 2019/20. HMRC has also confirmed that penalties for 2019/20 will be issued from September 2019.
The August issue of the Employer Bulletin confirms:
'HMRC will not charge penalties automatically for 2019/20, provided a Full Payment Submission (FPS) is filed within three days of the payment date. Where there is a pattern of persistent late-filing within three days of the statutory filing date, employers will be reviewed and may be charged a filing penalty as part of HMRC's risk-based approach.'
The deadline for cleared electronic payments is the 22nd of the month following the end of tax month. For cheque payments or other non-electronic methods, payment is due by the 19th.
HMRC may charge interest on the amount outstanding for late payment, which will accrue until the total amount is paid. Contact us for help with payroll matters.
Source: Employer Bulletin
Self assessment deadlines
Two self assessment deadlines are approaching:
- 5th October 2019
For those individuals who have not previously completed a tax return but need to report a liability for 2018/19.
- 31st October 2019
For those individuals who have previously submitted 'paper' self assessment tax returns the deadline for the 2018/19 return is 31 October 2019. Returns submitted after that date must be submitted electronically or they will incur a minimum penalty of £100. The penalty applies even when there is no tax to pay or the tax is paid on time.
If you would like any help with the completion of your return, please do get in touch.
Source: HMRC deadlines
HMRC latest guidance for employers
HMRC has published the latest edition of the Employer Bulletin. This guidance for employers, and their agents, includes articles on:
- Class 1A liabilities payable on Termination Awards and Sporting Testimonial Payments
- Off-payroll working rules from April 2020
- Disguised Remuneration
- Seasonal Workers
- Contractors operating CIS – new VAT reverse charge on building and construction services
- 'Trivial Benefits'
- Welsh rates of Income Tax
- Student Loans
- Good Work Plan proposals to support families
- Sickness absence costs £9 billion per year
For help with payroll matters, please contact us.
Source: Employer Bulletin
Strong Customer Authentication
The Financial Conduct Authority (FCA) has agreed a plan to give the payments and e-commerce industry extra time to implement Strong Customer Authentication (SCA).
From 14 September 2019, new European Union (EU) rules apply that impact how banks or payment services providers verify their customers' identities and validate payment instructions. The Strong Customer Authentication (SCA) rules are intended to enhance the security of payments and limit fraud.
The FCA has agreed an 18-month plan to implement SCA with the e-commerce industry which includes card issuers, payment firms and online retailers. The plan reflects the opinion of the European Banking Authority (EBA) that more time was needed to implement SCA given the complexity, lack of preparedness and the potential for a significant impact on consumers.
Jonathan Davidson, Executive Director for Supervision – Retail and Authorisations, said:
'The FCA has been working with the industry to put in place stronger means of ensuring that anyone seeking to make payments is not a fraudster. While these measures will reduce fraud, we want to make sure that they won't cause material disruption to consumers themselves; so we have agreed a phased plan for their timely introduction'.
The FCA has confirmed that it will not take enforcement action against businesses if they do not meet the relevant requirements for SCA from 14 September 2019 in areas covered by the agreed plan as long as there is evidence that they have taken the necessary steps to comply with the plan. At the end of the 18-month period, the FCA expects all businesses to have made the necessary changes and undertaken the required testing to apply SCA.
Source: FCA press release