Newton & Co Monthly E-Newsletter
Here we’ve included our top tax stories from the last month for your perusal. Please also check out our Facebook and Twitter pages too.
Top 10 mistakes employers make when paying the National Minimum Wage
There are lots of reasons why an employer might find themselves not paying the National Minimum Wage (NMW) correctly. To help you avoid making mistakes we have drawn together a list of the most common reasons that cause underpayment.
- Failure to apply the annual minimum wage rate increase as they go up each year on 1 April.
- Missed birthdays as employees turn 18, 21 or 25 years old and move from one NMW rate to another.
- Paying the apprentice rate to somebody who isn’t actually an apprentice. Recognised apprentices must have an apprenticeship contract and undergo an element of structured training.
- Continuing to pay the apprentice rate for too long. The apprentice rate only applies to apprentices who are under the age of 19, or if aged 19 or over within the first year of their apprenticeship.
- Making wage deductions for items or expenses that are connected with the job. This could include, for example, safety clothing, uniforms, tools etc.
- Making wage deductions that are deemed to be for the employer’s “own use or benefit”. For example a Christmas club saving scheme. It doesn’t matter that the worker can choose to buy into the scheme and the employer doesn’t have to make a profit from it.
- Charging a worker more than the stated offset rate for living accommodation, currently £49 a week.
- Not paying for all the time worked such as time spent travelling, training or downtime at the employer’s disposal.
- Not paying for additional time worked such as time spent clearing security checks once a worker’s shift has finished.
- Including elements of pay that don’t count towards minimum wage such as tips and the premium element of pay associated with shift premium.
Have you stopped claiming child benefit because of the High Income Child Benefit Charge?
The HICBC starts to claw back child benefit when the income of the highest earning partner reaches £50,000. This article explains why you may want to claim child benefit in order to preserve entitlement to your state pension, even if you then later opt-out of receiving the benefit.
Each year for which child benefit is claimed provides a qualifying year for a person for whom that year may not otherwise be a qualifying year. Even if a person has only one child, the number of qualifying years that may potentially be lost by a stay-at-home parent as a result of not claiming child benefit is 12. This is just over a third of the qualifying years needed to qualify for the full state pension.
Have you earned a small amount of trading, casual or property income?
We are reminding people who have earned a small amount of income through self-employment, casual work, the sharing economy or from any property they own (such as renting out a driveway), that they may not need to inform HMRC or pay any tax on that income because of two new allowances, the Trading and Income Allowance (known as the ‘Trading Allowance’) and the Property Income Allowance. These new allowances were introduced for the 2017/18 tax year and each allowance can reduce taxable income by up to £1,000.
If you would like to discuss your personal tax needs further, please don’t hesitate to contact one of our expert team on 0191 428 3337 or firstname.lastname@example.org