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Archive:May 2023

Please find below all the articles from May 2023.

Payroll hygiene

It is very irritating when HMRC accuses you of owing more PAYE than is actually due. This can happen when the HMRC computer has recorded a duplicate employment for an employee, without ceasing the previous employment.

For example, William Smith is employed and is paid a regular salary of £2,000 per month. On the first FPS, he is recorded as William Smith. On a later FPS, he is recorded as Bill Smith. The HMRC computer will assume that William Smith and Bill Smith…

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Payroll settlement agreements (PSA)

A payroll settlement agreement (PSA) is used by employers to declare and pay the tax and NIC due on benefits that they don’t want the employee to be taxed on.

These may be one-off benefits paid on an irregular basis, such as the use of a company flat for a short period, or a holiday. The PSA can also be used where the value of the benefit exceeds the statutory exemption, such as for taxi fares, non-trivial gifts, or a staff party that…

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Planning for retirement

On 6 April 2023, the pensions annual allowance increased from £40,000 to £60,000, and the pensions lifetime allowance was effectively abolished.

You can now contribute far more to your pension funds each year, and so can your employer. Any unused annual allowance can also be carried forward up to three years.

This freedom to contribute also applies to those with large pension savings who have fixed protection on their pension pots, to stop the lifetime allowance charge from…

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VAT penalty notices

Two new VAT penalty regimes came into effect for VAT periods beginning on and after 1 January 2023, for late filing of VAT returns and for late payment.

Late filing of a VAT return now attracts a penalty point rather than a warning or formal default surcharge notice. Only when you reach a certain threshold of points do you have to pay a fixed financial penalty of £200.

The points threshold which generates a financial penalty varies according…

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