HMRC is to change its Pay As You Earn (PAYE) system to detect owed deductions on a monthly basis, rather than yearly, in a bid to make the system easier for employers.

Using Real Time Information (RTI), tax and deductions will be transmitted to HMRC each time an employee is paid, meaning employers will no long be required to provide information using forms P35 and P14 after the year end or to send p45/46 when employees start or leave employment.

The phased introduction of RTI will begin in April 2012 with an initial pilot. HMRC hope to increase the number of employers joining RTI during 2012-13 following the scheme’s success.

However some advisors and employers are being a tad nieve about the introduction of this, believing all they read. Please do not fall into this trap, the number of professional bodies that are urging HMRC to delay its introduction is huge but HMRC are beligerantly pushing ahead, which spells a recipe for disaster. Still not convinced, well don’t forget there are now in year business record checks and potential for in year penalties, to encourage you. If you need advice on this and more importantly a review of what you are doing to make sure you can handle this, call us today on 0800 917 9176

In December 2009,  HM Revenue & Customs (HMRC) stated that they had identified 800 Hospital Consultants it wished to launch a tax investigation into  and of its intention to initiate an amnesty. The Tax Health Plan (THP) was subsequently launched.

The THP raised over £10 million through over 1500 disclosures, with an individual payment of over £1 million by a doctor and over £300,000 by a dentist.

HMRC has now announced that it has begun 500 enquiries and 6 criminal investigations since the THP closed.

The dispute between HMRC and Hospital Consultants concerning what constitutes their business base for mileage purposes continues to run. A Tribunal case is due to be heard this summer, although it is understood that it involves a geriatrician, rather than the more representative Hospital Consultant undertaking a combination of NHS and private practice work at regular locations. So watch this space because it isn’t only these high profile cases that employers need to be aware of there is also the real danger that employees and Directors are claiming travel & subsistence costs incorrectly as they have not identified a persons permanent/temporary workplace. We are here to help you with this exercise so call us today on 0800 9179176 begin_of_the_skype_highlighting 0800 9179176 end_of_the_skype_highlighting

EICG are offering a menu of Construction Industry Scheme (CIS) reviews for your company at special rates until 30 June 2011

HMRC are being very proactive in this area, even for companies that have previously been under the radar. You could be caught out whether this be via an employer compliance review, an employment status review or an in year business records check. The costs of getting things wrong can be monumental, not just the penalties but also the time taken out of your business and the resulting stress that this can cause.

So why wait, choose your review option below and contact us today on0800 9179176 begin_of_the_skype_highlighting 0800 9179176 end_of_the_skype_highlighting

• Employment status review of your subcontractors and associated paperwork
• Review of all aspects of your Construction Industry compliance
• Business record checks
• Full Employer compliance review, as HMRC would conduct them

Make your company the one that HMRC walks away from rather than feasting on your hard earned profits.

Employer Annual Returns must be sent to HMRC by the 19 May filing deadline. Failure to do so will almost certainly result in a late-filing penalty. In previous years, an extra-statutory concession gave employers extra time before HMRC charged a penalty, but this has now been withdrawn.

And from this year, employers will be liable to a penalty if they file their annual return on paper (with some very limited exceptions, such as certain individuals who employ their own carer). Last year, no penalty was charged for employers with five or fewer employees, but these transitional arrangements have now ended.Penalties

Very quietly HMRC have announced that there is a new CIS penalty regime being brought in.

From October 2011, the penalties for late or non-filing of a contractor’s monthly return within the Construction Industry Scheme are changing.

The first return falling within the new penalty regime will be the return for the month ending 5 November 2011.

The following penalties will apply to that return and all subsequent months’ returns that are not filed or filed late:

• A fixed penalty of £100 immediately a return is late.
• A second, fixed penalty of £200, two months after the filing date if the return is still outstanding.
• If the return is still outstanding six months after the issue of the first penalty, a tax-geared penalty is charged which is the greater of £300 or 5% of the amount of deductions shown on the return.
• If the return is still outstanding twelve months after the issue of the first penalty, a further tax-geared penalty is charged which is the greater of £300 or 5% of the amount of deductions shown on the return. Higher levels of penalty apply where, as a result of the failure to file the return on time, information has been deliberately withheld.

Interest will be chargeable on any penalty paid late.

The legislation for the change is at schedule 55 Finance Act 2009.

Paragraph 13 of Schedule 55 to Finance Act 2009 introduces a penalty capping provision. The fixed penalties within the capping period will not exceed a maximum of £3,000. The capping period starts on the day of commencement (the date the contractor advises HMRC that they will first pay, or have first paid, a subcontractor) until the date they first file a CIS monthly return. Tax-geared penalties of 5% of the amount of deductions shown on the returns will also apply in the capping period where the return is submitted over 6 and 12 months late. There will be no fixed minimum charge of £300 when the capping period applies.

Mistakes can be expensive so contact EICG on 0800 917 9176 to find out about our Construction Industry Scheme (CIS) reviews

A £158BN hole in the public finances means that HMRC are being used to try and raise extra cash for the Treasury, as quickly as possible and that will mean easy targets, so small and medium size firms, anyone in the construction industry are in the direct firing line for:

employer compliance reviews

PAYE/NIC investigations

Employment status reviews

tax investigations

you name it and they are heading your way and don’t think it won’t happen to you – it will, so why not take advantage of the special deal that EICG is running this month on PAYE/NIC healthchecks and Construction Industry reviews, call us today on 0800 917 9176 to see how we can help you avoid being a victim

HMRC announced in June that Extra Statuory Concession B46 (ESC B46) allowing a seven-day grace period for late employers’ and contractors’ returns will cease from 31 March 2011.

ESC B46 established the principle that penalties would not be charged when employers and contractors submitting tax returns and CIS forms had taken “all reasonable steps” to file their returns on time, but were not able to do so due to unforeseen circumstances such as postal delays.

With the advent of online filing, which is required for P35s and P14s and will become mandatory for Corporation Tax returns from 1 April, HMRC considers the concession to be “redundant” because the delays it was intended to address will no longer happen. Returns must therefore reach the department by their due date or incur a late filing penalty of £100.

Confirming the new penalty regime HMRC explained: “Any customers filing a return late will, as now, be able to request us to remove any penalty, if they believe they had a reasonable excuse for the delay in filing. We will consider every case on its own merits. Customers can also appeal against the penalty to a Tribunal.”