The start of this tax year brought with it the introduction of Real Time Information (RTI) the most significant change to the UK tax system since Self Assessment in 1996.
For those of you who are not aware of it, details of amounts to be paid to any individual through the PAYE system have to be reported to the Revenue before any money can be transferred. This affects employers, employees & pensioners and the Revenue will know the amount of pay before the payslip is printed.
These changes should enable the Revenue to access current details about employees, where and when they have been working and how much they are earning. This will mean that all benefits and tax credits should be based on accurate up to date information which should avoid fraudulent claims and significant under or over payment of benefits/tax credits. This is the theory. In practice, however, it may be a while before it is fully implemented because of the delay in the introduction of Universal Credit.
With up to date details of the PAYE/NIC payable by all employers, the Revenue will know what is due and will be able to accurately pursue late payments through the tax year. Failure to meet the payment deadline will result in automatic penalties based on a percentage of the amounts due and the number of late payments.
Concessions are in place for this introductory year but no-one should be lulled into a false sense of security as penalties will be enforced with a vengeance next year for non-compliance on all levels.
If you or your partner have been in receipt of Child Benefit after 7 January 2013 and either one of you has total gross income in excess of £50,000 then additional information has to be reported to the Revenue on a Tax Return by the partner in receipt of the highest total income irrespective of which received the Benefit. The information required is as follows:-
The amount of Child Benefit received from 7 January 2013 to 5 April 2013
The number of children for whom a claim was made in that period
If we act for both parties we can advise whether a charge for recovery arises and on whom. If we do not act for both or your circumstances have changed during the period please provide details and we can advise of any additional information that may be required.
The Autumn Statement included an increase in the Annual Investment Allowance for Capital Allowances after 1 January 2013 to £250,000. There are quite complex transitional rules and so if significant expenditure has been incurred recently or is planned in the near future please refer to us to ensure the correct timing with your year end to maximise the tax relief.
A new £2,000 relief against Employers' NIC payments will not be effective until April 2014. Owner managed company directors may wish to increase their salaries next year to take some advantage of that.
The introduction of the higher flat rate state pension is brought forward to April 2016. You may wish to check your retirement date and entitlement. Self employed individuals gain with the increased basic pension.