How are qualifying years for the state pension worked out, and how easy is it to 'lose' one of them?

I attach a P60 that I generated from my firm's payroll software in which five months have £2,000 pay and seven months have just £1.

So although the gross pay is £10,007 and NI contributions have been generated, only £2,560 shows at the ‘lower earnings limit’.

The weekly paid seem to be the most vulnerable on this issue, and I wonder if you might point that out in another article.

People need to either register as unemployed or pay Class 3 National Insurance contributions. Miss a week and the year is lost - or am I missing something?

Steve Webb replies: The building blocks of entitlement to the state pension are ‘qualifying years’ of National Insurance contributions.

Where people have a regular income every week of the year, the way in which a qualifying year is built up is pretty simple.

But in the increasingly common situation where people have fluctuating incomes, or perhaps periods when they are not earning at all, things get rather more complicated.

Indeed, under the current rules there are some people who pay no NICs at all during a year but still build up a ‘qualifying year’, whilst there are others who do pay NICs who may nonetheless not build up a qualifying year!

This is currently £6,136 per year, or £512 per month (if you are paid monthly) or £118 per week (if you are paid weekly).

This is the earnings level at which your earnings start to count towards building up a ‘qualifying year’ (of which more below).

A second important number is the ‘primary threshold’ which is currently £8,632 per year, with corresponding monthly and weekly rates.

In terms of how much NICs you pay and what you get for them, there are three broad groups:

- Those who earn above the primary threshold in any given week or month: they have to pay NICs and these earnings count towards making the year a ‘qualifying year’;

- Those who earn between the lower earnings limit and the primary threshold: this group is ‘credited’ with NI contributions towards their NI record but do not have to actually pay NICs;

- Those who earn under the lower earnings limit – this group pays no NICs and gets no NI credits.

For a year of your working life to be a ‘qualifying year’ towards your state pension, you have to have paid (or been credited) with NI contributions on earnings equal to 52 times the weekly lower earnings limit.

As noted above, periods when you are earning below the lower earnings limit do not count towards this target.

But the good news is that weeks (or months) when you are earning more than the lower earnings limit help to make up for weeks (or months) when you were not earning (or earning below the LEL).

To give a simple example, suppose that you have a year in which you do no paid work for 26 weeks and then you do 26 weeks at an earnings level of £236 – double the lower earnings limit.

For the year as a whole, you have qualifying earnings of 52 times the LEL and this is therefore a qualifying year.

In the example given in the question, we can ignore the periods when the individual earned a token amount, and focus on the five months where pay was £2,000.

In each of those months, the pay was above the monthly LEL and therefore the full amount counts towards the annual target.

As five lots of £2,000 totals £10,000 for the year, and this is in excess of 52 times the weekly LEL (£6,136) this would count as a qualifying year.

From a National Insurance point of view there is therefore no need to sign on as unemployed for the ‘missing’ months and no need to pay voluntary NICs.

Source: https://www.thisismoney.co.uk/money/pensions/article-7873583/How-qualifying-years-state-pension-worked-out.html

By STEVE WEBB FOR THIS IS MONEY

PUBLISHED: 08:24, 13 January 2020 | UPDATED: 09:38, 13 January 2020

RTI troublespots: Low paid directors

One of the most frequently asked questions about RTI on AccountingWEB is what will happen under the new system to small companies that only have directors with no PAYE/NI to pay,  but who receive a small monthly salary.

“Are they really going to have to submit their payroll every month under RTI,” asked Carol@ciaccountancy in November.

In reply, 12Pay’s Tom McClelland came up with a succinct summary of the situation: “If the company has no employees above the LEL in any week, *and* P46s are held for all employees with boxes ‘A’ or ‘B’ ticked (ie you have a declaration from them that this is their only job), then you don't need a PAYE scheme.

“The moment a single employee exceeds the LEL in any week, or a single employee ticks box ‘C’ on their P46 or refuses to tick any of the P46 boxes, you must have a PAYE scheme and report all employees, regardless of pay levels, to HMRC. This is already the case.

“From April 2013 the reporting will be a full payment submission (FPS) for everyone on every payment if the employer has a PAYE scheme. You won't need to think about the status of employees once you've got a PAYE scheme; just pay them all the same way, and (I guess) whatever payroll solution you use will file them all.”

Since then, similar questions have continued to roll in. To try and bring calm to the situation, this “RTI troublespots” article examines the practicalities for directors under RTI and addresses some of the points raised so far.

The main problem for advisers is that the director may actually draw the cash and they are left to decide later how much of this is salary and how much is going to be dividend. If the director has an overall debit balance on his loan account, the amounts he draws and subsequently decides are salary payments breach the on or before rule (assuming that the total amount is in excess of LEL). This presents the risk of substantial penalties (of up to £1,200) in 2014/15 when the late filing penalties commence.

It would be sensible to decide on how much to pay the director, and when, and then prepare a payroll and RTI to reflect this; it could be monthly, quarterly or annual, but the important thing is to make payments of the amounts at the time stated on the RTI submission (at “date of payment”).

Remember that you can file a FPS at any time before payment is made, which leaves the option of running a salary for 11 months of the year in month 1, and making the payments on (say) 20^th of each month. Alternatively advisers might run quarterly payroll in advance every quarter.

Of course it is possible to still pay the salary in one lump as an annual amount, but if running a payroll in March 2014 to record an annual salary of, say £7,500, a payment would need to be made to match. Making a credit to the director’s loan account would not count as payment for RTI purposes, as payment has already been made in advance. There is also an issue in potentially triggering NIC liability if the pay is drawn before the salary run, although this frequently won’t be a problem if the director draws less than the threshold.

Where the salary is “paid” by crediting to the director’s loan account which is in credit rather than overall debit, these problems largely disappear, although if a very small company does not actually write up books and ledgers this may be difficult to demonstrate.

Any other cash drawn against loan account would (assuming that the above has been done) then not be salary and could be regarded as a loan, which might subsequently by either repaid or cleared by a dividend. A file note could record this fact.

HMRC’s view is that number of hours for many directors will be 30+ on the FPS. In particular it has been confirmed to me that the hours data on the RTI will NOT be used for minimum wage purposes. Obviously if you KNOW that a director does very few hours you should report accordingly.

Where a director is to be paid in a single month and not in others, the employer may wish to file an inactivity report (and/or nil payment returns) so that HMRC is aware that no payments are due each month.

Source: http://www.accountingweb.co.uk/article/rti-troublespots-low-paid-directors/538069

Where to find a notary?

The Notaries Society is the representative society for the 900 or so Notaries Public practising in England and Wales. From this page you will find various topics of interest to members of the profession and the public alike.

The Notaries Society was founded in 1882 and was incorporated in April 1907, the twenty fifth anniversary of its founding. Membership of the Notaries Society is open to all Notaries in England and Wales, and to other Notaries whose Faculty is derived from the Court of Faculties.

Website:
http://www.thenotariessociety.org.uk/

10 Things You Can Do Now to Have a Great Tax Season

Many tax practitioners focus on improving their efficiency during tax season, but there are plenty of things they can do in advance to ensure success from January to April
Best practices and strategies that tax practitioners can start putting in place now are:

• Make sure you have good scanners. He recommends the Fujitsu 6130, which scans 50 pages a minute, duplex, and offers despeckling and decrumpling, among other features. “You’re going to scan at the front end,” he said. “The days of having people with lots of stuff to key off, those days are over with. We scan everything at the front end.”
• Get multiple monitors. “Go home tomorrow and buy another monitor. It’s ridiculous to have just one monitor. You’ve got to have at least two,” he said, noting that at his office, staff have three, and they’re contemplating moving to four, while a McKinsey study says that knowledge workers are most productive when they have six. He also described a portable monitor that can hook into the USB port on most laptops.
• Software: scan, organize, populate. Make sure you’re using tools that do these things. “Clients bring in their stuff -- that’s the polite word for it -- and normally this ‘stuff’ would go to a tax preparer and they’d sort it and move it around and copy it and put yellow stickies on it and highlight it,” Frederiksen said. “No more -- now it goes to the administrative person who does the scanning. He counts the number of sheets, runs them through the scanner and makes sure the scanner sees the same number of pages. Then we upload it to [a service like 1040 Scan or GruntWorx]. They put all the documents in the correct order so they follow the organizer.” When the file is returned approximately 10 minutes later, the practitioner takes care of the miscellaneous items that the system can’t recognize. The system also takes the numbers from the source documents and populates them in the tax return. “We find it populates approximately 60 percent of the return,” he said. The services are generally priced per return.
• Send direct mail to homeowners. Frederiksen said that he gets most of his clients from direct mail. He buys lists of all the new homeowners in his area; a number of companies provide them, but his firm uses Homeowners Marketing Services. He generally sends as many as five letters -- an introductory letter, a letter on December 1 offering a free half-hour consultation, a letter on February 1 offering a 10 percent discount if they come in before February 15, a similar letter on March 1, and a final postcard on April 1. “It’s the best two weeks in the year to get new clients,” he said.
• Thank-you letters. These should be sent out within five days of completing a client’s return, and ask for referrals. The trick is to write them out now, before January, so they’re ready to mail during tax season, and also to include at least two business cards for the client to give out to friends and family: “You’ve got to make it easy for people to refer business to you,” he said.
• Tax organizers. “We are big believers in tax organizers as a marketing device,” Frederiksen said. His firm sends full electronic organizers from the tax prep software, but it has also created a condensed, four-page organizer, which often helps drive referrals. Among other things, they printed up 5,000 and had them inserted in a local paper on February 1. “It wasn’t a stampede of new clients, but it certainly paid for itself, and it helped in terms of our branding,” he said.
• Create an audit prepayments and correspondence program. As an add-on at 10 percent of your fee, or $100, offer to cover any audit, and to deal with nuisance mail. Very few clients will get audited, so it’s worth the risk. He also recommends offering new clients a guarantee on all prior returns for $350. “What are my odds that they’re going to get audited?” he asked.
• Preschedule mail-ins. Tell clients to send information in by February 25, even if they don’t have everything ready.
• Preschedule appointments. “You can spend a huge amount of time during tax season messing around with appointments. You end up with all of this phone tag going back and forth,” he said. Clients should be prescheduled, with a postcard that includes a map of your location. “They want to know how to find you, and what to do with their car when they get there,” Frederiksen said. You should have someone on your staff follow up the  week before and the day before.
• Expand your capacity. Because of the shortage of skilled preparers, Frederiksen said that there will only about a third of the tax preparers available that the industry needs, so practitioners may want to start exploring outsourcing returns to India and locally through firms like Xpitax and SurePrep.

source: http://www.accountingtoday.com

A guide to expenses you can claim

As a contractor it can be a bit of a minefield trying to figure out what you can and can’t
legitimately claim as expenses. For instance, if you’re buying a new all-singing-alldancing
laptop, is it pushing the mark to claim for that?
This guide will help you identify expenses you’re entitled to claim for.
Here’s an idea of some of the legitimate and above-board expense claims we’ll happily help you with:
Some general rules on expense claims:
1. All claims for expenses should be incurred wholly, exclusively and necessarily in performing
your business duties.
2. You should not claim any travel and subsistence expenses for any one place you have
worked, or know you will work, for more than 2 years.
3. Receipts for all expenses should be kept for a minimum of 6 years to provide evidence of
expense claims in case of HMRC investigation.

Business mileage (use of your personal car)
You can currently claim 45p per mile for the first 10,000 business miles you do in your car each year
and then 25p per mile after that. This mileage includes travelling to and from temporary locations and
between different sites. Of course, you need to get valid VAT receipts for fuel and these must be
kept to support your claim.
Subsistence
You’ve got to eat! So, while working at a temporary location, you can claim any reasonable meal and
drink costs supported by valid receipts. So if you buy a sandwich and coffee for lunch….keep the
receipts!
Accommodation
There are several categories for submitting accommodation costs, here’s how they all stack up:
All accommodation (hotels and B&Bs) must be accompanied by an original receipt.
If you’re claiming accommodation rental costs, your rental agreement must be the original (in
the name of the business), signed copy and meet HMRC Dual Purpose rules, which means
that you are already maintaining a property and are renting a 2nd property for the purpose of
your contract.
You may be able to make a claim for staying with friends of family whilst at a temporary work
place.
Parking charges
Parking can be claimed as long as an original receipt detailing the date and cost is available for each
amount claimed.
Rail, bus, taxi and air travelFare costs to and from your home and temporary place of work can be claimed where receipts are
provided. For low cost flights, both original tickets and online receipts are acceptable.
Training and tuition
Any training or tuition to do with your current trade can be claimed. Training is treated like any other
deductible business expense; it must be ‘wholly, exclusively and necessarily’ in the performance of
duties and related to income. If the training is not linked to existing income, then it cannot be
treated as a deductible expense through your limited company.
Manuals and text books
A reasonable amount may be claimed for the cost of manuals and text books required for business
purposes - receipts required.
Eyesight testsAn eye test may be claimed as long as a receipt is provided. The cost of spectacles may be claimed if
they are prescribed for VDU use only. This will need to be confirmed on the receipt from the optician.
Computers and other office equipment
The costs of hardware, software and other office equipment essential to your business can be
claimed. There’s no limit to the amount that can be claimed.
Postage
Anything you need to post to us here at ClearSky or any business related post can be claimed for,
again original receipts must be provided.
Office consumables and stationery
Any office consumables (printer ink, pens etc) and stationery you use for business may be claimed.
This total cost must be for a reasonable amount and you’ll need original receipts to validate your
claim.
Telephone
Itemised business calls from home or a personal mobile are fully claimable, while unfortunately
private calls or line rental costs are not. To claim business calls a copy of your itemised telephone bill
must be kept. Internet / ADSL subscriptions cannot be claimed.
If the telephone/internet contract is taken in the company name the full cost of the line rental/call
charges can be claimed.
Associated travel costsRoad and bridge tolls, tunnel fares and congestion charges incurred while on business may be
claimed. Original receipts are required for all items except toll fees. Speeding, parking or clamping
fines cannot be claimed.
Advertising/MarketingCosts of advertising your business is an allowable expense, so for example online search engine
listings, telephone directories or in some cases even sponsorship of a local sports team.
Childcare
Up to £55 per week, per employee, paid to a registered childminder can be claimed through your
company. This should be paid from the company bank account. This can be dependent on the level
of your income, you may need to speak to your Personal Accountant for specific claims.
Bicycle
You could claim for the cost of a bicycle through the “cycle to work” scheme. You may even be able
to claim a mileage expense for the journeys to a temporary workplace.
Donations
Donations made to a registered, HMRC approved, charity are allowable.
Use of home as office expenses
In 2012 a fixed rate of £4 a week was announced as an acceptable flat rate claim for general costs
associated with the use of home, and it was confirmed that no detailed expense claim need be
prepared to justify such an amount. Claim amounts above this may be able to be made – however
should be supported by sufficient evidence.
Pension contributions
Pension contributions made by an employer on behalf of its employees are an allowable expense. If
you would like to discuss setting up an employers pension scheme through your limited company
please contact ClearSky Wealth Management on 0845 060 8800.
Staff entertaining
The cost of an annual staff function can be claimed through your company. This should be supported
by receipts and it is important that the receipts for this expense do not exceed £150 per employee.
Life Insurance
You can save tax by paying for some life insurance policies through your limited company.

Бесплатный проезд на общественном транспорте в Лондоне

Приятная новость для жителей Лондона, кому исполнилось 60 лет. Теперь Вы можете перемещаться по Лондону бесплатно на следующем общественном транспорте: автобус, метро, ДЛР, трамвай и железные дороги Лондона.

Если вы постоянный житель Лондона и вам за 60 лет, вы можете оформить Лондонскую Ойстер карту на проезд с фотографией.
Для оформления вам понадобиться фотография, паспорт и счет за коммунальные услуги. Срок оформления документов - 2 недели после подачи всех необходимых документов.

Вы не можете претендовать на получение на Ойстер 60+, если:
- если у вас уже есть, или вы можете претендовать на получение, Freedom pass
- если у вас уже есть Veteran Oyster
- если вам нет 60 лет
- если вы не проживаете в Лондоне.

При оформлении запроса на Ойстер 60+ вы должны иметь:

- цветную фотографию,
- паспорт или водительские права UK,
- доказательство проживания в Лондоне - счет за коммунальные услуги

Если у вас возникли вопросы, контакты в правом верхнем углу страницы.

Free Legal Advice Centre in Tower Hamlets

Toynbee Hall’s Free Legal Advice Centre was founded in 1898 known originally as the “Poor Man’s Lawyer”. Running continuously ever since it was almost certainly the first, and is unquestionably the oldest surviving Free Legal Advice Centre in the world. We provide this service through volunteer law students and legal professionals giving quality assured advice.

 

Free Legal Advice Centre Weekly Timetable

Evening advice sessions run between 5pm and 8.30pm.  We strongly advise arriving by 5pm,  in order to guarantee that you are seen.

Contact the Free Legal Advice Centre by telephone on 020 7392 2978 or by email at flac@toynbeehall.org.uk if you have any questions about the service.

Monday evening

Employment rights

We can provide advice regarding dismissal, redundancy, discrimination, unpaid wages and can help with making claims to an employment tribunal.

Tuesday evening

Debt advice

This service works with clients in crisis debt, and helps people resolve these problems, including liaison with creditors.

Wednesday evening

General advice (including immigration)

This session advises on all issues for which there is no specialised service. Topics include: family and children, general civil litigation, criminal injury claims, and magistrate court work.

Our immigration service deals with basic applications within the Immigration Rules and naturalisation as a British Citizen.

Thursday evening

Housing and Consumer Rights

Dealing exclusively with tenants in the public sector and private sector, this service deals with all Landlord and Tenant issues; including Council House provision, eviction, overcrowding, disrepair, neighbours and fitness for habitation.

We also advise on consumer rights issues. 

Saturday 11am – 1pm

Women only general advice, including specific support for Bengali women including problems such as domestic violence, forced marriages, and immigration. Advice is provided by volunteer women solicitors only, with Bengali translators present.

Address:

Toynbee Hall, 28 Commercial Street, London, E1 6LS, England, UK