Welcome to the May 2014 Newsletter from Connolly Accountants Ltd

April was a busy month for many, with long-awaited changes finally coming into effect on the 6th plus a few Budget surprises to take into account. The start of the 2014/15 financial year is a time for business owners to breathe the spring air and look to the future.

You can view our summary of the 2014 Budget, visit the tax information section of our website.


Changes to legislation for employers

A number of significant changes for employers have taken place, meaning that every business with employees must re-evaluate their practices to make sure they are conforming to legislation.

The new Employment Allowance

Last year Chancellor George Osborne announced plans to introduce a new Employment Allowance designed to reduce the national insurance liability for businesses and charities, and to encourage businesses to expand and take on new staff.

Since April 2014 every business, charity and Community Amateur Sports Club in the UK has been entitled to claim up to £2,000 off their employer national insurance contributions (NICs) bill.

Employers must confirm their eligibility through their regular payroll process, to ensure that up to £2,000 is deducted from their employers' Class 1 NIC liability over the course of the year's PAYE payments.

The new Employment Allowance is delivered through standard payroll software and the HM Revenue & Customs (HMRC) Real Time Information (RTI) system.

The Employment Allowance applies per employer and can only be claimed once, irrespective of how many PAYE schemes the employer chooses to operate. It is up to the individual employer to decide which PAYE scheme to claim it against.

New rules on Early Conciliation

An alternative to an employment tribunal - Early Conciliation is designed to be fast and less stressful when resolving workplace disputes. This free service is available to anybody who wishes to lodge an Employment Tribunal claim.

From 6 May 2014 it will be necessary to contact Acas as a first step in the process. Their advice is aimed at resolving disputes as early as possible and reaching a settlement without a tribunal hearing.

Acas should respond to the potential claimant or representative within two working days of receiving the initial form. Once further details have been established the case will be passed to a conciliator who will contact both parties and talk through the issue.

Early Conciliation aims to resolve the majority of workplace disputes, including:

  • unfair dismissal claims
  • workplace discrimination
  • redundancy payments or disputes around selection procedures
  • deductions from wages or unpaid notice/holiday pay
  • rights to time off or flexible working
  • equal pay.

After Early Conciliation is introduced, anybody who wishes to lodge a claim with an Employment Tribunal will have to provide an Acas Early Conciliation Reference Number.  Exemptions may apply.


The New ISA

On 6 April the annual overall investment limit increased to £11,880 (including a cash maximum of £5,940). However, the new limit is only relevant for a few months, because from 1 July 2014, ISAs will be undergoing a radical overhaul and will be replaced by the 'New ISA' (NISA).

From that date all existing ISAs will become NISAs, and the overall annual subscription limit for these accounts will be increased to £15,000 for 2014/15.

ISA savers will be able to subscribe this full amount to a cash account (currently only 50% of the overall ISA limit can be saved in cash), and will also be able to transfer their investment from a stocks and shares to a cash account and vice versa.

There will be changes to the rules on the investments that can be held in a NISA, so that a broader range of securities, including certain retail bonds with less than five years before maturity, can be invested.

Between 6 April and 1 July 2014, the total amount that can be paid into a Cash ISA is £5,940. For those with a Stocks and Shares ISA, money can still be paid into that account, but the combined amount paid into Cash and Stocks and Shares ISAs must not exceed £11,880. From 1 July 2014, when any ISA will automatically become a NISA, further money can be added to either a Cash or a Stocks and Shares NISA up to the new £15,000 limit.

We can help you make the most of your personal and business finances - please contact us for assistance.


ESSENTIAL TAX DATES FOR MAY

1 May
Start of daily penalties for 2013 online Tax Return not yet filed. Additional penalties may apply for further delay.

3 May
Submission date of P46 (Car) for quarter to 5 April.

31 May
Last day to issue 2013/14 P60s to employees.


QUOTE OF THE MONTH

'Countries emerged from the financial crisis with an even bigger problem. Many banks were even larger than before and so were the implicit government guarantees.'

The International Monetary Fund's Global Financial Stability Report.


WEBSITE OF THE MONTH

www.quora.com

Ask a world of experts for free advice or search out questions that have already been answered.


ON OUR WEBSITE

Your Money
For updated tips on personal taxation, savings and investments, visit the Your Money section of our website.

Business Information
Updated business guides for 2014/15 are free to view on the Your Business section of our website.

A good time to sell, say home owners
Mortgage lender Halifax has released a survey of almost 2000 UK adults, revealing 56% of them feel that it is a good time to sell their property.
Click here for the full story

Economy still reliant on consumer spending
Growth remains reliant on consumers while investment and exports have fallen by the wayside, according to the International Monetary Fund (IMF).
Click here for the full story

Freedom on annuities bought before Budget
Savers who signed up for annuities just before the Budget are allowed to switch to one of the new options laid out in the new legislation.
Click here for the full story

Shop prices show steepest fall in years
The British Retail Consortium (BRC) have published figures showing that in March overall shop prices reported deflation for the eleventh consecutive month.
Click here for the full story

Energy boss embraces market reforms
SSE Chief Executive, Alistair Phillips-Davies, said the energy industry should have a less confrontational stance against reform.
Click here for the full story