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October 2015

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To October’s Tax Tips & MYOB News.

This month we concentrate on Auto Enrolment  Workplace Pensions – now imminent for some employers.

The Pensions Regulator seems to assume that  you, as an employer, have time to go through all the documents and rules by yourself.  The pensions’ software and systems expect you to be running your own payroll. The whole system is incomplete, poor quality, confusing.

The Pensions Regulator is not holding back from fining those that are not compliant (pdf)

We’re not the only professionals to find the process exasperating. Watch this! (You Tube) 

We’ve now come to a decision point about what we are prepared to offer to make things simple for you, our clients
October 2015
· Our Choice of Pensions Provider
· Recommended Pension Contributions
· Our Fees
· Tax Credit Changes Approved
· October Questions and Answers
· October Key Tax Dates
Our Choice of Pensions’ Provider: The People’s Pension
Our first proposal is to recommend The Peoples Pension (PP).  We only want to use this Pension Provider for our clients with payroll.  The reasons are various:

1. Lower charges for your staff.  PP depends on a 0.5% Annual Management Charge.  This is not the lowest.  But there are no other charges.  Therefore it is likely to be the cheapest in the medium term.  See this review.
2.  There is no lock in.  Therefore your staff will be able to migrate their funds to a larger occupational pension if they move jobs (unlike NEST)
3.  There is no charge for withdrawing your funds to a cheaper fund, or to an alternative pension provider.  This means that the PP will have to remain competitive, lest employers move to a cheaper or better provider.
4.  There is no regular basic fee for account management per month (unlike Now Pensions).
5.  There is no deduction from the initial contribution (unlike NEST).
6.  The employer pays no fees for middleware administrative systems that we expect that smaller employers will neither need nor want.
7.  The website is fairly friendly.  The employer is given a portal with a log in and password, and the employees can get a login which will allow them to see their pension details.
8.  The staff answer the phone (unlike our experience with Scottish Widows).
9.  Emails often get a reply.
10.  The funds are not owned by a branch of the state (unlike NEST).
11. The method of uploading the calculations from our payroll software to their portal is no more ludicrously time-consuming than other pension providers we have tested (exactly like Now Pensions, NEST, et al).

Introduction to Peoples Pension (You Tube)

In our assessment we can just about handle the enrolments and the calculations, the creation of each Pension scheme and the registration with the Pensions Regulator.  We cannot do this with widely differing arrangement for the separate employers we represent.

Read More
Recommended Pension Contributions
Our Fees
We want to minimise the possibility of complaints from your staff by recommending Employer only contributions for your Workplace Pensions. This even saves a little Employer National Insurance!

The Pensions Regulator (PR) has started charging serious numbers of businesses with non compliance fines.  It also offers a complaints service for those employees that want to complain about the quality of their employer pension schemes.  The PR will probably only therefore only intervene where the employees are disgruntled. 

Our suggestion is therefore to avoid the major source of vulnerability and reduce the need for consultation with staff by making your pensions non contributory.  That is, the employer will pay all the minimum contribution, rather than force the employee to share the burden.  Then the auto enrolment will not be contested by the staff.  There will be no reduction in their net pay (at a time when few can afford it).  The staff will not be able to complain about consultation or bureaucratic failures if the employer is picking up all the costs anyway.  

Note: this will only apply to eligible and non-eligible workers.  ‘Entitled’ workers are not entitled to any contributions (despite the name!).

Contribution Rates
Our final recommendation is to set rates for all the schemes we create.

We are reluctant to have many variables, because of the tracking of the rates.  Each year the minimum rates of contribution will increase.  The software is so bad that this means we have to alter each rate on each payroll we run for all our clients.  And we have to alter the rates on the Pension provider software also.  Each year the rates increase we will have to alter 600 individual figures, for fifty employers.  If we have too many we run the risk of forgetting a particular employer.  So simple rates:

We therefore propose the following Employer/employee contribution rates:

Eligible 2% / 0%
Non Eligible 2% / 0%
Entitled 0% / 2% 

Read More.
Business Companion Fee increase
When transferring clients from other accountants we have realised that we are offering a seriously competitive all-inclusive service.  We are providing support which many accountants charge extra for.  

Since we last reset our prices in Autumn 2010 we have had five years inflation.  We have tried hard to keep our prices low, for the benefit of our clients.  However the intervening period has seen a 15% increase in the RPI.
And our obligations and workload has only increased.

We have therefore decided to increase our Business Companion prices by 15%.  This is allowed for in your agreement with us.  Your latest bill will therefore reflect an increase from December. 

Sort Code Change
When you update your Standing Order please can you also change our sort code to 60-83-01 as this has recently been changed by the Unity Bank. 

Auto Enrolment 
At the moment we are not proposing an extra fee for setting up and running Auto Enrolment pensions
This might change.  The workload is significant.  You can tell we are worried that we need to upload a separate payroll file for each client to each pension provider’s website, every month.  We need to be honest and warn that there is even risk that we might make a mistake with the current systems that are available. Please bear with us.

Comparison with other Accountants
See our current Business Companion Service fees (scroll down to the bottom of the page). 

Very few Chartered accountancy practices (we are Chartered Management Accountants) actually display their prices – as we do. Here are a few that do, to allow you to compare.

Accountant Preston
James Smith Accountant

If you are a Contractor you might find this comparison useful: Contractor Accountancy Fees

We offer a personal, face-to-face and comprehensive service.  But our fees compare well with virtual services.
Tax Credit Changes Approved top
October Questions and Answers top
The government has recently confirmed that the draft Tax Credits (Income Thresholds and Determination of Rates) (Amendment) Regulations 2015, which were laid before Parliament on 7 September 2015, are compatible with the European convention on human rights. Following a lengthy parliamentary debate, the draft regulations have been approved and are expected to apply from 6 April 2016. The implication of these regulations means that most tax credit claimants will have their working tax credit (WTC) and child tax credit (CTC) reduced from April 2016, but the impact of these changes may have passed many people by. Read More Q. I am a VAT-registered sole trader, owning a cycle shop in my local town. I am thinking of opening a second shop in another town and am wondering how I will deal with this for self-assessment and VAT. Will I need to register the new shop for VAT separately and complete two VAT returns – one for each business? Answer

Q. I own a rental property and let it out on a fully-furnished basis. Can I claim a tax deduction for the cost of replacing items as and when needed? Answer

Q. I am a higher-rate taxpayer. My wife currently works part time and pays tax at the basic rate. We have a second property that we rent out but the deeds are held in my sole name. Is it worth putting the property into joint names, or even transferring it to my wife outright, so that we pay tax on the rental income at the basic rate? Answer
October Key Tax Dates top
14 – Return and payment of CT61 tax due for quarter to 30 September 2015

19 – Tax and Class 1B national insurance due on PAYE settlements for 2014/15

19/22 – PAYE/NIC, student loan and CIS deductions due for month to 5/10/2015 or quarter 2 of 2015/16 for small employers

31 – Deadline for 2014/15 self assessment paper returns to be filed for HMRC to do the tax calculation. If a paper return is being filed also the deadline for tax underpaid to be collected by adjustment to your 2016/17 PAYE code (for underpayments of up to £3000 only)
Need Help? top
New Clients Welcome top
Please contact us if we can help you with these or any other tax or accounts matters.

In addition, if there’s anyone else who you think would benefit from the newsletter, please forward the email to them or ask them to contact us to be added to the newsletter list.
If you are not already a client and are interested in becoming one, we would love to discuss how we can help and provide you with a competitive quote for our services.

See details of our Business Companion Service.
About Us top
Simple Accounting Limited offers a cost effective Business Companion service to business owners who use MYOB, Acclivity, Mamut, Solar Accounts, Quickbooks or Clearbooks.

‘All clients using these software packages can benefit from our support. Visit our website for a look at the resource on offer.’

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