These pension reforms that were introduces in legislation of November 2008were designed to encourage greater private saving.
The important measures in the act will come into effect from October 2012 unless there are significant changes by the coalition government announced in September this year. The review team is on schedule to report to Steve Webb, the Minister for Pensions at this time.
The Key area’s for Reform, that will affect employers are
- Compulsory employer and worker contributions to be phased in
- Workers to be automatically enrolled in a National Employment Savings Trust (NEST), a government introduced scheme
- A straightforward qualifying regime meaning schemes already in existence will already meet the criteria
- A government department compliance regime.
Workers eligible to be forcibly enrolled will be
- Any worker not already in a scheme
- Aged between 22 and state retirement age
- Working in the UK
Employers will have to contribute 3% of the employees qualifying earnings which is anything between £5035.00 and £33,540.00.
From 1st October 2012 employers will pay 1% and employees 0.8% (0.2% tax relief)
From October 2016 to 2017 employers pay 2% and employees pay 2.4% (0.6% tax relief)
After October 2017 employers pay 3% and employees pays 4% (1% tax relief)
This is in effect another tax, similar to National Insurance and therefore will complicate the administration of PAYE contradicting the government’s current consultation on simplifying the PAYE system.
more info at this is money
Tuesday, 24 August 2010
Friday, 13 August 2010
What google page is my site on?
Just found this neat little tool that lets you see where your site turns up in google searches when certain keywords are typed.
It;s pretty cool.
http://request.acerhosting.net/gTool.aspx
It;s pretty cool.
http://request.acerhosting.net/gTool.aspx
Tuesday, 10 August 2010
WHAT IS AN UMBRELLA COMPANY?
The purpose of this post is to give you an overview of the Legal and Structural form of an Umbrella Company. It is important to understand how an Umbrella Company differs from any other form of Limited Company and that it is these differences that allow Umbrella Companies to operate in the way they do.
What is an Umbrella Company?
The term Umbrella Company was coined a few years ago. There is no legal definition of what an Umbrella company is, but the word is generally used to describe one where:
- many workers are gathered together within one company
- where that company supplies services to a particular type of client, the employment agency
- where the employee of the Umbrella is employed under a special form of employment contract known as an “over arching employment contract”
- What is an “over arching employment contract”?
An over arching employment contract is one which does not come to an end when a particular short term assignment ends. IE: If a man works for two weeks, then has a break of a week, then goes to another site, the employment contract persists. The alternative would be that the employment contract ends immediately the assignment ends.
An overarching contract is one where there can be a series of short term engagements in different places, where there can be gaps, but where the employment contract does not come to and end because of these gaps.
Overarching contracts typically allow for variable rates of pay. If you examine an over arching employment contract you will see that it states there is no normal rate of pay but that the company decide how much it will pay an employee each week. The only constraint in the contract should be that the hourly rate will never be less than the National Minimum Wage. This isn’t always the case but from January 2011, when new legislation comes into force, it will be necessary for all legitimate Umbrella Companies to include a clause such as this.
- Why is the contract so important?
It is important because it is that form of employment contract that allows the worker to claim travel related expenses. Without such a contract the company could not offset expenses before calculating an employees pay.
- It is implicit in an overarching employment contract that the employee’s normal place of work is his home, enabling expenses to be claimed from home to work and back again.
- In the absence of such a contract the employees work site becomes his fixed place of work and travel from home to a fixed place of work is not deductible. So, if there isn’t signed contract, expenses should not be allowable.
What is an Umbrella Company?
The term Umbrella Company was coined a few years ago. There is no legal definition of what an Umbrella company is, but the word is generally used to describe one where:
- many workers are gathered together within one company
- where that company supplies services to a particular type of client, the employment agency
- where the employee of the Umbrella is employed under a special form of employment contract known as an “over arching employment contract”
- What is an “over arching employment contract”?
An over arching employment contract is one which does not come to an end when a particular short term assignment ends. IE: If a man works for two weeks, then has a break of a week, then goes to another site, the employment contract persists. The alternative would be that the employment contract ends immediately the assignment ends.
An overarching contract is one where there can be a series of short term engagements in different places, where there can be gaps, but where the employment contract does not come to and end because of these gaps.
Overarching contracts typically allow for variable rates of pay. If you examine an over arching employment contract you will see that it states there is no normal rate of pay but that the company decide how much it will pay an employee each week. The only constraint in the contract should be that the hourly rate will never be less than the National Minimum Wage. This isn’t always the case but from January 2011, when new legislation comes into force, it will be necessary for all legitimate Umbrella Companies to include a clause such as this.
- Why is the contract so important?
It is important because it is that form of employment contract that allows the worker to claim travel related expenses. Without such a contract the company could not offset expenses before calculating an employees pay.
- It is implicit in an overarching employment contract that the employee’s normal place of work is his home, enabling expenses to be claimed from home to work and back again.
- In the absence of such a contract the employees work site becomes his fixed place of work and travel from home to a fixed place of work is not deductible. So, if there isn’t signed contract, expenses should not be allowable.
Monday, 9 August 2010
False self-employment in construction.
In the Budget 2009 Darling announced the government intention to clamp down on self-employed people in the construction industry.
Grant Thornton have some background here.
If HMRC can deem self-employed people as employees then the increased tax take would be substantial.
This is not to deny that there is a problem with the low paid being treated as self employed allowing end clients to effectively pay at below the minimum wage but the new rules will have be carefully crafted not to penalise skilled tradesmen and harm the flexibility of the UK’s construction sector.
The government acknowledge that they need to amend the test at point 4.18 of the summary of consultation responses.
We await HMRC's further response.
Grant Thornton have some background here.
If HMRC can deem self-employed people as employees then the increased tax take would be substantial.
This is not to deny that there is a problem with the low paid being treated as self employed allowing end clients to effectively pay at below the minimum wage but the new rules will have be carefully crafted not to penalise skilled tradesmen and harm the flexibility of the UK’s construction sector.
The government acknowledge that they need to amend the test at point 4.18 of the summary of consultation responses.
We await HMRC's further response.
Friday, 6 August 2010
HMRC: An option for exploiting Real Time Information
Part 5 of the HMRC consultation on simplifying the PAYE system, after putting forward a strong case for using Real-Time Information goes on to explore how else this information can be used, with rather bizarre and sometimes worrying ideas.
In point 5.2 they suggest that the Real Time information concept works less well for agency workers and those with several jobs. This is the opposite of what the preceding 4 parts seemed to inform us. They have thought of a radical option of moving the responsibility of doing the tax calculation away from employers and “placing it fully with HMRC”. I’m sorry but this is not at all comforting, employers are good at dealing with tax calculations and seem to make far fewer mistakes with tax codes and general administration than HMRC. Only this year thousands of individuals were placed on BR or D rated tax codes in error taking weeks to sort out. This caused hardship for many and where possible my company whilst understanding taxation, could offer to sub our employees weekly whilst they waited, and waited for HMRC to sort the problem out. Placing our faith in them to administer a complicated system is like placing our faith in a crocodile to rescue us from drowning.
There is a very serious issue I have to take with point 5.6 as follows
I mean really, not technically, not in theory, but really, this is OUR money. It is not the government’s money, the government doesn’t have any money, it is ALL OUR MONEY. So why would we just send the whole amount, gross pay plus employers national insurance to HMRC and trust in them to pay our wages correctly.
To make this even more ridiculous they then state (5.7)
and 5.9
So why leave employers to do half the job? If something aint broke don’t fix it, isn’t that what they say? This is about controlling hard earned wages and HMRC can in no way care as much about an employee being paid correctly and on time than the employer.
They then seek to assure us all that HMRC wouldn’t have access to individual bank accounts. It would be a computerised system that would split the money and send it. So who do you contact when something goes wrong, it’s bank holiday, England are playing Brazil in the world cup final and your wages are lost in the ether in HMRC’s automated payments system? They would need a new department as big as the banking systems BACS and CHAPS departments.
Apparently (5.10) “the system would adhere to the high standards of taxpayer confidentiality that characterise the existing system.” Ahem, thanks for that.
Then we see some concern for individual liberty at point 5.12
Tax codes aren’t that difficult to understand, unless of course HMRC put you on the wrong one. Why is it ok for the state to know personal circumstances and not a private company? Are we to believe that the state is more trustworthy than the population at large?
Then we go on to see some illogical reasoning. 5.14 says:
This would be a very complicated system that many would struggle to understand. Individuals would get one statement from the employer, including union deductions, or sick pay payments and would have to look at another system or wage slip to see why they were paid the amount they received in their bank? It is completely ridiculous to say that this is simplification.
In addition there could be transmission errors, internet down time or the HMRC web portal could crash, who do these individuals complain to? Would they really want to make an internet complaint, send an email, deal with someone far away over the telephone? Or would they rather go to their employer? I think the answer is obvious.
HMRC acknowledge all of these concerns on one paragraph 5.18:
But they fail to talk about the fact that all this would require an enormous department with many staff to deal with both complex and simple pay queries on a day to day basis. They want to automate the process, suggesting that they are not prepared to allocate people to deal with this. In the real world, people have questions and they like to deal with other people when they have a problem understanding their pay.
They tell us (5.19) that the estimated savings to the private sector will be £500 million. That effectively means £500 million worth of jobs will be removed from the private sector and Wotan knows how much would have to be invested (from OUR tax money) to staff the state’s new behemoth that would be the national payroll department.
At 5.22 they actually point out that this system could be at risk of “increasing avoidable contact with HMRC”. Yes that’s it in a nut shell, avoidable contact. They want our money but they don’t want to be answering to us because they know that the costs of dealing with this properly would be astronomical.
Finally, they state:
No need to worry, I will be responding. If you would like to respond, you can email to paye.consultation@hmrc.gsi.gov.uk.
My annotated notes can be viewed here.
In point 5.2 they suggest that the Real Time information concept works less well for agency workers and those with several jobs. This is the opposite of what the preceding 4 parts seemed to inform us. They have thought of a radical option of moving the responsibility of doing the tax calculation away from employers and “placing it fully with HMRC”. I’m sorry but this is not at all comforting, employers are good at dealing with tax calculations and seem to make far fewer mistakes with tax codes and general administration than HMRC. Only this year thousands of individuals were placed on BR or D rated tax codes in error taking weeks to sort out. This caused hardship for many and where possible my company whilst understanding taxation, could offer to sub our employees weekly whilst they waited, and waited for HMRC to sort the problem out. Placing our faith in them to administer a complicated system is like placing our faith in a crocodile to rescue us from drowning.
There is a very serious issue I have to take with point 5.6 as follows
Today, the majority of employer payrolls are connected to the electronic payment infrastructure. Under Centralised Deductions the employer would send the gross payment through the electronic payment system to a central calculator where the deductions calculated by HMRC would be made automatically. The resulting net payment would then be sent to the individual’s bank account and the deductions would be paid directly to the Government.
I mean really, not technically, not in theory, but really, this is OUR money. It is not the government’s money, the government doesn’t have any money, it is ALL OUR MONEY. So why would we just send the whole amount, gross pay plus employers national insurance to HMRC and trust in them to pay our wages correctly.
To make this even more ridiculous they then state (5.7)
Where the employer pays the individual by cheque or cash, HMRC could calculate and notify the employer of the deductions to be made and request their payment separately to HMRC.
and 5.9
Employers would however remain responsible for making statutory payments and third party deductions (such as Trade Union subscriptions) and for identifying whether a payment should be taxed.
So why leave employers to do half the job? If something aint broke don’t fix it, isn’t that what they say? This is about controlling hard earned wages and HMRC can in no way care as much about an employee being paid correctly and on time than the employer.
They then seek to assure us all that HMRC wouldn’t have access to individual bank accounts. It would be a computerised system that would split the money and send it. So who do you contact when something goes wrong, it’s bank holiday, England are playing Brazil in the world cup final and your wages are lost in the ether in HMRC’s automated payments system? They would need a new department as big as the banking systems BACS and CHAPS departments.
Apparently (5.10) “the system would adhere to the high standards of taxpayer confidentiality that characterise the existing system.” Ahem, thanks for that.
Then we see some concern for individual liberty at point 5.12
Individuals would no longer need to understand tax codes, which are a means of hiding an individual’s personal circumstances from the employer.
Tax codes aren’t that difficult to understand, unless of course HMRC put you on the wrong one. Why is it ok for the state to know personal circumstances and not a private company? Are we to believe that the state is more trustworthy than the population at large?
Then we go on to see some illogical reasoning. 5.14 says:
Information about deductions might no longer appear on an employer generated payslip. To compensate, one option would be to give individuals access to their consolidated tax account which would show how deductions had been calculated. This information could be made available in a number of ways – many would want to view it online but others might prefer alternative means.
This would be a very complicated system that many would struggle to understand. Individuals would get one statement from the employer, including union deductions, or sick pay payments and would have to look at another system or wage slip to see why they were paid the amount they received in their bank? It is completely ridiculous to say that this is simplification.
In addition there could be transmission errors, internet down time or the HMRC web portal could crash, who do these individuals complain to? Would they really want to make an internet complaint, send an email, deal with someone far away over the telephone? Or would they rather go to their employer? I think the answer is obvious.
HMRC acknowledge all of these concerns on one paragraph 5.18:
Nevertheless, such a reform would require individuals to get used to a new means of dealing with pay issues. They would continue to deal with their employer on questions about amounts and timing of gross payments, statutory payments and third party deductions, but questions about tax and NIC deductions would be the responsibility of HMRC. The handling of cases where the individual had a query about the deductions will be considered very carefully as part of this consultation exercise. Much of the information wanted by individuals in this situation could be provided through self-service, online or elsewhere. But there is potential to add to the administrative burden for both individuals and HMRC if people are unclear about who to contact with a question. This would require careful design to avoid significant additional cost to HMRC or employers.
But they fail to talk about the fact that all this would require an enormous department with many staff to deal with both complex and simple pay queries on a day to day basis. They want to automate the process, suggesting that they are not prepared to allocate people to deal with this. In the real world, people have questions and they like to deal with other people when they have a problem understanding their pay.
They tell us (5.19) that the estimated savings to the private sector will be £500 million. That effectively means £500 million worth of jobs will be removed from the private sector and Wotan knows how much would have to be invested (from OUR tax money) to staff the state’s new behemoth that would be the national payroll department.
At 5.22 they actually point out that this system could be at risk of “increasing avoidable contact with HMRC”. Yes that’s it in a nut shell, avoidable contact. They want our money but they don’t want to be answering to us because they know that the costs of dealing with this properly would be astronomical.
Finally, they state:
HMRC is interested in hearing proposals that could deliver a similar or better outcome through different means from those outlined in this chapter.
HMRC would like to engage with all groups of people who could be affected by this option to discuss the practical advantages and issues to be addressed.
No need to worry, I will be responding. If you would like to respond, you can email to paye.consultation@hmrc.gsi.gov.uk.
My annotated notes can be viewed here.
HMRC – Improving the operation of Pay As You Earn (PAYE)
This is the consultation document produced by HMRC to try and collect Income Tax and National Insurance more quickly and cut down on the administrative burden of repaying overpaid tax and collecting underpaid tax after the tax year end. They have added other aims but in all honesty that is just fluff to make the document bigger.
Point 2.2 states that their aim is
I don’t know why they insist on referring to us as customers because we aren’t customers, we are Her Majesty’s subjects and we have to pay tax. Its ok, I can accept that so I wish they’d just refer to us as ‘the public’. Anyway regardless of that it is a noble aim to increase tax take without actually increasing the level of taxation. Their main thrust of how to achieve this is through technology that can communicate to HMRC levels of tax and NI deducted from individual employees in real time or basically at the point of payment HMRC want to know how much was deducted and for whom. Also communicating when an employee leaves or starts should cut down on the administrative burden of issuing p45’s or P46’s and reducing the paperwork involved at year end.
At point 2.4 they point out that PAYE has been and remains very successful costing just 1 penny in every pound to collect tax. In 2009 -2010 tax year they collected £249 billion in tax and NI through this system, presumably costing £2.5 billion to collect. £2.5 billion is still a big number so the point is taken well that there is a case for improvement.
Tax credits when awarded would also be more accurate if HMRC had access to more real time information further reducing administrative burden for them (2.7).
By collating the responses to this document they should be able to assess how much the improvements will cost, how much more tax they should take and how much money they should save (2.14)
At 3.1 it is pointed out that PAYE is designed so that individuals don’t need to contact HMRC at end of year to claim a repayment. This is untrue, if you have overpaid tax you will get a letter from HMRC but you will have to contact them to ask for the money.
So why do they want to change it again? The reasons (3.2):
It currently costs employers and pension providers £700 million. Well with 50,000 people working in payroll that’s £14,000 for each one and the average salary is higher than that so this figure must be higher, but so what? It provides jobs.
- HMRC spends £1 billion on PAYE administration. Well from what we worked out earlier were does the other £1.5 billion go?
- 5 million people receive a tax refund or a tax bill each year. That’s 15% of the working population so this could be improved by real time information.
- Student loan deductions can continue to be paid once the loan is paid off. Shouldn’t the people with the loans be dealing with that?
- People with 2 or more jobs can pay too in much National Insurance (NIC’s).
I want to look at the Student loan matter in more detail. Point 3.3:
Well there’s such an easy answer to this. Stop employers having to take on the burden of repaying people’s loans! Surely the individual who borrowed the money entered into an arrangement and is responsible for the repayment. If the individual is a credit risk, don’t lend them money. I simply can’t understand why individual loan repayments are lumped in with income tax and national insurance. Take them out.
The document starts to sound like special pleading for a while. Point 3.9 acknowledges that PAYE works well for a large majority of people but in the modern age there is a significant minority of people with complex employment patterns. This is the flexible workforce in case they forgot the term, people can have many different jobs in any particular year and also they may have 2 or 3 or more jobs at any one time, and I would agree that the current system doesn’t work very well for them. HMRC says it leads to “an unsatisfactory customer experience.” Oh for the love of Thor, we are not customers! We’re just not.
It’s interesting to note in point 3.12:
So what? What is the possible relevance of this in the consultation? I can only assume that the author has in mind the Conservative Party's idea that the banking industry could become responsible for the deduction of tax and NIC direct from ones bank account. I don’t know.
Later on (3.14) the technology used by banks in order that people can log on, check their balance and pay bills online. The government wants to make use of this technology. Fair enough, use the technology, it should be quite simple. In fact p45 information and end of year documents like p35’s are already submitted online. The technology is already there.
Further aims behind the desire to change the PAYE system are discussed at 3.16.
- They want a “joined up view” of individual’s employment and pension income.
- A complete contact history that connects all the communication individuals have with HMRC to their account.
I don’t see how this can help much in the way of increasing tax take or reducing administrative burden and will cost quite a lot in terms of IT development. Given the track record of government departments in keeping personal data secure this seems to be a very bad idea. The very nature of the current system is more secure by the fact it is disjointed.
It is confirmed at point 4.5 that the responsibility for calculating the amount of tax and NIC will remain with the employer although it does not confirm that responsibility for paying with remain with the employer. I can detect an idea by the absence of this point. Are they thinking that employers calculate the deductions and pay to people’s banks the gross amount? Are the banks known for their responsibility with our money? We’ll just have to keep our eye on this one.
They suggest (4.9 & 4.25) that the current software that HMRC provide free for small employers might be enhanced to cater for the provision of real-time information. I would suggest that this is essential. It would be costly initially, but very lucrative for IT contractors. They should invest around £50 million to provide ANY employer, large or small, with a well presented piece of software, with similar functionality to that of Sage Payroll for example. It would interact with HMRC systems seamlessly and reduce software and admin costs for small to medium enterprises (SME’s) incredibly.
They repeat that real-time information will reduce the burden on employers and HMRC (4.14) at year end. I agree although it doesn’t seem to me to be too much of a burden for us, I don’t know about HMRC.
In what it would mean for HMRC (4.32) they point out that at any one time the average amount owed to HMRC by employers is £3.5 billion. Real time information would allow them to know exactly what is owed at any point in time (as opposed to knowing monthly, or in reality annually). This is a very good idea.
My notes on the consultation document can be viewed here
I will analyse section 5: An option for exploiting Real Time Information shortly, as this I think has considerable draw backs.
Point 2.2 states that their aim is
To reduce costs both for employers and for HMRC by making the system easier to administer; to improve service levels for individual customers; and to ensure accurate tax deductions.
I don’t know why they insist on referring to us as customers because we aren’t customers, we are Her Majesty’s subjects and we have to pay tax. Its ok, I can accept that so I wish they’d just refer to us as ‘the public’. Anyway regardless of that it is a noble aim to increase tax take without actually increasing the level of taxation. Their main thrust of how to achieve this is through technology that can communicate to HMRC levels of tax and NI deducted from individual employees in real time or basically at the point of payment HMRC want to know how much was deducted and for whom. Also communicating when an employee leaves or starts should cut down on the administrative burden of issuing p45’s or P46’s and reducing the paperwork involved at year end.
At point 2.4 they point out that PAYE has been and remains very successful costing just 1 penny in every pound to collect tax. In 2009 -2010 tax year they collected £249 billion in tax and NI through this system, presumably costing £2.5 billion to collect. £2.5 billion is still a big number so the point is taken well that there is a case for improvement.
Tax credits when awarded would also be more accurate if HMRC had access to more real time information further reducing administrative burden for them (2.7).
By collating the responses to this document they should be able to assess how much the improvements will cost, how much more tax they should take and how much money they should save (2.14)
At 3.1 it is pointed out that PAYE is designed so that individuals don’t need to contact HMRC at end of year to claim a repayment. This is untrue, if you have overpaid tax you will get a letter from HMRC but you will have to contact them to ask for the money.
So why do they want to change it again? The reasons (3.2):
It currently costs employers and pension providers £700 million. Well with 50,000 people working in payroll that’s £14,000 for each one and the average salary is higher than that so this figure must be higher, but so what? It provides jobs.
- HMRC spends £1 billion on PAYE administration. Well from what we worked out earlier were does the other £1.5 billion go?
- 5 million people receive a tax refund or a tax bill each year. That’s 15% of the working population so this could be improved by real time information.
- Student loan deductions can continue to be paid once the loan is paid off. Shouldn’t the people with the loans be dealing with that?
- People with 2 or more jobs can pay too in much National Insurance (NIC’s).
I want to look at the Student loan matter in more detail. Point 3.3:
There is an additional consequence where HMRC takes on collection for another Department. For example, HMRC collects student loans on behalf of the Department for Business, Innovation and Skills and passes information about repayments to the Student Loan Company (SLC). HMRC is unable to provide information about individual repayments until after the end of the tax year. This can mean that in some instances deductions continue after the loan has been fully repaid, requiring a refund from SLC.
Well there’s such an easy answer to this. Stop employers having to take on the burden of repaying people’s loans! Surely the individual who borrowed the money entered into an arrangement and is responsible for the repayment. If the individual is a credit risk, don’t lend them money. I simply can’t understand why individual loan repayments are lumped in with income tax and national insurance. Take them out.
The document starts to sound like special pleading for a while. Point 3.9 acknowledges that PAYE works well for a large majority of people but in the modern age there is a significant minority of people with complex employment patterns. This is the flexible workforce in case they forgot the term, people can have many different jobs in any particular year and also they may have 2 or 3 or more jobs at any one time, and I would agree that the current system doesn’t work very well for them. HMRC says it leads to “an unsatisfactory customer experience.” Oh for the love of Thor, we are not customers! We’re just not.
It’s interesting to note in point 3.12:
Finally, when PAYE was introduced, almost everyone was paid in cash, but nowadays, around 96 per cent of payments taxable under PAYE are made electronically via the Direct Credit system (BACS). Employers also use other payment channels in use, e.g. Faster Payments Service and the Clearing House Automatic Payments System (CHAPS).
So what? What is the possible relevance of this in the consultation? I can only assume that the author has in mind the Conservative Party's idea that the banking industry could become responsible for the deduction of tax and NIC direct from ones bank account. I don’t know.
Later on (3.14) the technology used by banks in order that people can log on, check their balance and pay bills online. The government wants to make use of this technology. Fair enough, use the technology, it should be quite simple. In fact p45 information and end of year documents like p35’s are already submitted online. The technology is already there.
Further aims behind the desire to change the PAYE system are discussed at 3.16.
- They want a “joined up view” of individual’s employment and pension income.
- A complete contact history that connects all the communication individuals have with HMRC to their account.
I don’t see how this can help much in the way of increasing tax take or reducing administrative burden and will cost quite a lot in terms of IT development. Given the track record of government departments in keeping personal data secure this seems to be a very bad idea. The very nature of the current system is more secure by the fact it is disjointed.
It is confirmed at point 4.5 that the responsibility for calculating the amount of tax and NIC will remain with the employer although it does not confirm that responsibility for paying with remain with the employer. I can detect an idea by the absence of this point. Are they thinking that employers calculate the deductions and pay to people’s banks the gross amount? Are the banks known for their responsibility with our money? We’ll just have to keep our eye on this one.
They suggest (4.9 & 4.25) that the current software that HMRC provide free for small employers might be enhanced to cater for the provision of real-time information. I would suggest that this is essential. It would be costly initially, but very lucrative for IT contractors. They should invest around £50 million to provide ANY employer, large or small, with a well presented piece of software, with similar functionality to that of Sage Payroll for example. It would interact with HMRC systems seamlessly and reduce software and admin costs for small to medium enterprises (SME’s) incredibly.
They repeat that real-time information will reduce the burden on employers and HMRC (4.14) at year end. I agree although it doesn’t seem to me to be too much of a burden for us, I don’t know about HMRC.
In what it would mean for HMRC (4.32) they point out that at any one time the average amount owed to HMRC by employers is £3.5 billion. Real time information would allow them to know exactly what is owed at any point in time (as opposed to knowing monthly, or in reality annually). This is a very good idea.
My notes on the consultation document can be viewed here
I will analyse section 5: An option for exploiting Real Time Information shortly, as this I think has considerable draw backs.
Thursday, 5 August 2010
Girl moves in to my flat
Well the Girlfriend is moving in at the beginning of next year so it was time to sort out a few issues. I have a lot of important things in my flat like every motherboard, graphics card and associated cable from every PC I have ever owned. You never know when these things could come in handy. My important things have now been classified as “Junk” and her junk is being moved in and classified “Important”.
So I emptied my junk cupboard, formally known as IT storage and what couldn’t go on ebay went to the local recycling centre. The people there seemed overjoyed with the mountains of stuff, old monitors, a UPS, a lot of telecoms equipment and old PCI cards like modems and LAN’s as well as enough cable to set up a copper smelting factory to kick start a new manufacturing base for the UK.
Anyway, cleared out now and in moves a mountain of clothes and shoes for the walk-in wardrobe she’s always promised herself. I’ve put a rail in there and soon it will become a starlet's dressing room.
I think I may start an ebay account to secretly sell her shoes…
Sunday Christening
So we went to a Christening on Sunday, a Roman Catholic Christening. I was expecting it to be a very long drawn out affair but it was surprisingly informal, for a church event. The actual ceremony took about 20 minutes and nobody told me I was going to Hell, so that was good.
One of the children was about five years old and cried a bit after the head wetting, I think she felt a bit awestruck at the thought that now she would definitely meet god one day.
There’s something quite bizarre in this day and age when four grown adults are asked to swear that they believe in a living god and that he created the earth in seven days. The four adult parents of the two children we were seeing accepted into this particular faith all agreed that this is what they believed. I didn’t point anything out later, about geographic processes, not that I know an incredible amount about that, or indeed how old the Universe seems to be when looking at the expansion rate.
Anyway, it was a very pleasant affair, the vicar was nice and we had a lovely barbeque in the village hall gardens in the afternoon. It was very sunny and warm and I met a lot of Hannah’s family friends, and I had a few beers too.
Wednesday, 4 August 2010
REC Meets Ed Davey
The REC's Chief Exec, Kevin Green met with Ed Davey yesterday (3rd August) to bash him about the industries worries regarding the Agency Workers Regulations (AWR).
Green said
So it looks like it's coming, in its current form.
Here's a link to the REC article.
Green said
Although it remains unlikely that the Government will reopen the whole debate on the current regulations
So it looks like it's coming, in its current form.
Here's a link to the REC article.
HMRC to simplify PAYE system
Ok, I know HMRC's idea of simplification can end up with a very costly, more complicated system but like it or not, the discussion is under way.
HMRC's discussion document.
The document states
So it seems the system is reaching retirement age and a new, younger, inexperienced system should take its place.
I'm reading this document keeping in mind that David Cameron suggested the deduction of PAYE should be handled by banking institutions. I mean, we know how we can trust banks with our money right?
HMRC's discussion document.
The document states
The business processes behind PAYE have remained unchanged for 66 years.
So it seems the system is reaching retirement age and a new, younger, inexperienced system should take its place.
I'm reading this document keeping in mind that David Cameron suggested the deduction of PAYE should be handled by banking institutions. I mean, we know how we can trust banks with our money right?
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