Chris Derby Limited

31/12/2024

31/12/2024

What's the craic?

Dublin New Year

28/03/2024

Are you fully entitled to a UK state pension ?

To receive the full pension your national insurance record must include 35 “qualifying years”. A qualifying year is one in which you were either:
1. working and made National Insurance contributions*, or
2. getting National Insurance credits e.g. if you were unemployed, ill or a parent or carer, or
3. paying voluntary National Insurance contributions.

*If you are working it is not always necessary to pay contributions in order to qualify for a pension. For directors and employees, if your earnings exceed the lower earnings threshold of £533 per month then they do qualify for state pension notwithstanding that no employee contributions are payable on earnings of less than £1,048 per month. (And, no employer contributions are payable on earnings of less than £758 per month). Similarly, for the self-employed, those with profits between £6,725 and £12,570 will qualify for state pension without paying contributions.

If you are in doubt as to whether you will have sufficient qualifying years we recommend that you should check before you reach state pension age. This is fairly simple by opening an online personal tax account. Please visit:

https://www.gov.uk/personal-tax-account

Once the account has been set up you will be able to review your record for state pension purposes and the amount of your expected pension. If you expect to have insufficient qualifying years for the full pension, you may be able to boost the number of qualifying years by one of the following alternatives:

For the self-employed, it is no longer required that you should pay class 2 contributions. However, if your business profits are less than £6,725 per annum then you would not otherwise qualify for state pension. In order to so qualify, you can however opt to pay class 2 contributions which are at a set rate of £3.45 per week. You can normally pay contributions for the last 6 years.

For those who are not self-employed, you may pay class 3 voluntary contributions. These are set at a rate of £17.45 per week; class 2 contributions are therefore always the preferred alternative for the self employed as they are far less expensive.

A useful link towards paying Class 2 is found at
https://www.gov.uk/pay-class-2-national-insurance

For those who reach state pension age after 5th April 2016, state pension is paid at a flat rate. The weekly rate of state pension for the year commencing 6th April 2024 is £221.20 (the 2023-24 figure was £203.85).

Whilst the level of state pension entitlement is set as weekly figure, most people elect to receive their pension at 4 weekly intervals. You would therefore receive 13 payments each year. However, for taxation purposes it is your entitlement to a weekly sum that will be included in your taxable income. Your annual taxable income will usually include 52 weeks of entitlement, and may occasionally include 53 weeks when there are 53 payment days falling within the tax year (the due date for payment varies according to the last two digits of your national insurance number).

Sign into or set up a personal tax account to check and manage HMRC records, including Income Tax, change of address, Self Assessment and company car tax.

23/02/2024

National Minimum Wage – are you paying the correct minimum rates ?

If HMRC finds that an employer has not paid the minimum wage, they can issue a notice to pay money owed going back for a maximum of 6 years. They can also issue a fine of a minimum of £100 for each employee affected and up to a maximum of £20,000.

Where a business might be caught out, as indeed happened in the cases of 182 employers whose names were published between 2019 and 2022, is where deductions are made from the pay of those employees who are paid at close to the minimum rates. Examples of such deductions which took place were for the cost of;

1. Food, meals, or refreshments,
2. Training,
3. Childcare costs,
4. Salary sacrifice schemes,
5. Purchase of overalls or other clothing

Employees must be paid at least at the minimum rate without such deductions.

Care should be taken that the employee is paid for all of their working time.
There should be no unpaid time; if an employee may be required for example to travel in the course of their work they should be paid for the time spent travelling.

We are pleased to offer a payroll service at competitive rates

08/02/2024

Tax Free Perks are a wonderful way of motivating your workforce. An employer can provide any number of small tax free benefits in kind to their staff. “Small” means £50 or less. The benefit has to be provided “in kind” so cannot be paid in cash but might be a voucher.

For company directors the tax free perks are capped at £300 per annum and again the maximum is £50 for each perk. For example, the perk could be given as retail vouchers. The benefit arises when the voucher is given. If six vouchers are bought from the same place at the same time, HMRC might argue that this is a single benefit. Best practice is therefore to buy the vouchers at different times. Call us if you have any questions on this.