A survey of 1,000 accounting professionals in the UK by software specialist Caseware, revealed that 56 per cent of accountants are currently carrying out manual tasks that could be automated. But only 43 per cent believe this practice will continue beyond 2020. While 24 per cent consider ability to use in a specific software as important skill today, 33 per cent believe that this will become more important in the near future.
Automation eliminates tedious, manual accounting processes that consume time and effort, leads to greater productivity, so that accountants can focus on value-added services and analysis..
Shez Hamill, a director at Caseware, said: “Whether 2020 marks the beginning of the age of accounting automation remains to be seen, but it is definitely where accountants expect the industry to go. The area of concern however is not about whether automation will take jobs, but rather if the industry as a whole has the skills it needs to take on this new, more strategic and planning focussed role - based on what our research has found, there is serious doubt about this, and it is something accountants and finance teams should be looking to address from 2020 and beyond.”
Over the last couple of weeks you will have noticed that we have released a few updates for PAYE Plus. This has been due to the Daily changes in information for claiming Coronavirus Job Retention Scheme (CJRS) payments. We have tried to help where possible in easing the difficulties in working out how much you are able to claim when paying split weeks and/or topping up Furlough payments.
With each of these updates we have also released the PAYE Plus Changes Document with information to help use these features. Please refer to these if you are unsure – Help>PAYE Plus Changes.
Tax Rate Changes 11th May 2020
One change that requires a manual intervention by yourselves is the change to the Scottish Tax Tables which need to be applied for any payrun dated on or after 11th May 2020 – according to the Tax Tables this will apply to Week 6 and Month 2 payruns. The tables need to be changed even if you only employ UK Tax Payers.
To change the tables, go to Company > Company Setup > General Preferences > Tax/NI Rates - From the drop-down menu, select "From 11th May 2020"
If you are using the incorrect Tax Tables for the date you are trying to run the payroll, when selecting Payroll > Payrun you will receive a message box as follows:-
If [OK] Week and Month will display as -1
If this message is displayed, you have not changed the Tables correctly.
Another change that was announced from HMRC after the release of our Tax Year End Update was the increase of the Employment Allowance for Tax Year 2020/21 from £3000 to £4000. There is no change required to the software, just to be aware of the increase in the allowance.
A reminder that this Tax Year, HMRC will not carry forward from previous years the eligibility for the Employment Allowance. You will need to prepare and send an Employment Payment Summary (EPS) advising of your eligibility. To do this, go to Online Filing > Real Time Information (RTI) > Prepare Employment Payment Summary. When you select that you are eligible for Employment Allowance, you now need to select the Business Sector that applies from the list displayed. Once saved, go to Online Filing > Real Time Information (RTI) > Submit Employer Payment Summary (EPS).
Also please be aware that if you have used the Coronavirus Job Retention Scheme (CJRS) Grant then you cannot also claim Employment Allowance for the Furloughed NIC payments. HMRC states that you must not claim the Employers National Insurance through the grant scheme if you are reducing payments using Employment Allowance.
As you are aware the Government are issuing information daily regarding COVID-19. It has now been confirmed that Employers can use a portal to claim for 80% of an employee’s usual monthly wage costs, up to £2500 a month, plus the associated Employers National Insurance and the minimum automatic enrolment Employer Pension Contribution on that wage. Employer minimum contribution is currently 3%. The online service to make claims is not currently available. However, it is expected to be so towards the end of April 2020.
To view the information made available for the Coronavirus Job Retention Scheme, to identify if you are eligible and what employees you can claim for, please follow this link:- https://www.gov.uk/guidance/claim-for-wage-costs-through-the-coronavirus-job-retention-scheme
At this time, we are not aware if changes will need to be made within payroll software or if HMRC will deal with all claims via an online portal available via your HMRC Login. We want to assure you though, that as soon as we receive guidance that changes are necessary, we will implement these and release an update.
Until we get this information, We wanted to advise you of a way to make payments to employees using our PAYE Plus software.
Coronavirus Job Retention Scheme (Furloughed Workers)
Follow the steps below within CIA and PAYE Plus to create the necessary codes to enable payment and to make it easily identifiable as to the amounts needed to be claimed when the service is available from HMRC.
Nominal> Nominals and Groups - Create two new nominal codes for Furlough Pay and Furlough Employers NI, these should both be Balance Sheet nominals and Current Liability group. Tick Journal Entries when setting up.
You may also wish to create a new nominal code for Furlough Employer Pension Contribution, If so, this will be the same as step 1.
Within PAYE Plus:-
Company> Departments - Create a Department for Furlough and set the Gross Pay nominal and Employer NI nominal as those created within CIA (Step 1). Set the Security level the same as the Department this is replacing. If you run more than one payroll i.e. Monthly and Weekly, you may wish to set more than one Furlough Department. If so, the Department codes will need to be different.
Company> Pay Codes - Create a Pay Code FURLOUGH with a description Furlough Pay, or Coronavirus Job Retention Scheme, or a description you wish to appear on the payslips. You may need to setup more than one pay code depending on the type of payments you make. i.e FUROFF / FURSITE if some employees are paid rates of pay and others fixed amounts. Enter the nominal created for Furlough Pay. These codes need to be setup in the same way as your existing codes that you wish to pay 80% of. i.e. Taxable, NIable, etc.
If you created a nominal code for Furlough Employer Pension Contribution, you will need to either edit your existing pay code and change the nominal code, or alternatively, create a new Furlough Employer Pension Contribution pay code. If not all your employees are being made “Furlough” you will need to create a new paycode.
Employee> Employees> Other Details - Edit each employee to be furloughed and change the Department to the Department Code set in step 1.
Employee> Employees> Pay Codes – Add the pay code created in step 2 and enter the calculation of 80% as a Rate or Fixed Amount. If Rate, you may also wish to enter a default quantity. Remember to remove the default quantity against rates of existing codes that the Furlough code is replacing.
Employee> Employees> Pay Codes – If you created a new pay code for Furlough Employer Pension Contribution, you will need to add this code to each furloughed employee and ensure the % is set at 3. Remember to change the existing code to 0%. If you are going to continue using your existing pay code, and you currently contribute more than 3%, you can only claim a maximum contribution of 3%, so therefore you will need to alter your existing % or make your own calculation as to how much you are able to claim.
Sick Pay from Day 1
Nominal> Nominals and Groups – Create a nominal code for COVID-19 Sick Pay. This should be a Balance Sheet and Current Liability group.
Within PAYE Plus:-
Company> Pay Codes – Create a pay code COVID19 with a description of COVID-19 Sick Pay or COVID-19 Self Isolation Sick Pay, whichever you prefer to display on the payslip. Set as a Rate, Payment, Taxable, NIable, tick the box labelled SSP, allocate the nominal as set in CIA (Step 1).
Employee> Employees> Pay Codes – Add the pay code to employees as required. The rate up to 05/04/2020 is £18.85 per day and from 06/04/2020 will be £19.17 per day. This is for a 5 day working week, payment totalling £94.25 and £95.85 accordingly.
Currently there is no facility to claim this back, but by following the above it will be easily identifiable how much to claim when HMRC have the procedure in place to do so.
If you have any questions or are unsure how to follow these suggestions, please contact our Support Department on 01935 443340.
A further link regarding COVID-19 information is as follows:-
Following the acquisition of CLiP IT by Eque2 in November, we are writing to make you aware of a new postal address to use for all correspondence from now, as follows:
Please ensure all correspondence is addressed as follows:
CLiP IT Solutions Limited
37 Peter Street
All telephone numbers remain unchanged as:
Sales: 01935 434435
Support: 01935 443340
As previously mentioned, it is very much business as usual at CLiP IT, however if you do have any questions or concerns, please do not hesitate to contact a member of the team on the numbers above.
On 6th September 2019, HMRC published a Policy Paper confirming the Domestic Reverse Charge VAT for Construction Services will be delayed for a period of 12 months, meaning the new implementation date will be 1st October 2020.
Construction Industry representatives raised concerns that not all businesses were ready for original start date of 1st October 2019. Therefore, to help these businesses HMRC have agreed to a delay of 12 months. This will also help avoid any changes that Brexit brings about.
For more detailed information, please find the link to the Policy Paper https://www.gov.uk/government/publications/revenue-and-customs-brief-10-2019-domestic-reverse-charge-vat-for-construction-services-delay-in-implementation/revenue-and-customs-brief-10-2019-domestic-reverse-charge-vat-for-construction-services-delay-in-implementation
HMRC will also update the Reverse Charge Guidance found at https://www.gov.uk/guidance/vat-domestic-reverse-charge-for-building-and-construction-services
As from 1st October 2019 if you are working as a subcontractor for a main contractor (who isn't the end user of the work) and they operate within the CIS Scheme the way you charge VAT is changing. Please ensure your software has the ability to deal with this. (our CIA software has been updated to deal with the change).
HMRC have introduced this change to protect themselves from the most common fraud they suffer in the Construction Industry.
HMRC estimates around £100m a year is lost from subcontractors billing main contractors (and being paid) VAT but then "disappear" before paying the VAT to HMRC.
CLiP IT Solutions are pleased to say we have passed HMRC’s checks and the CIA software will be updated to meet all new VAT Making Tax Digital (MTD) requirements as part of the tax year end update.
We are pleased to announce that the CIA (Construction Industry Accounts) Software update for the new making tax digital VAT reporting was passed by HMRC this week ready for the deadline in April 2019.
All customers will receive the update as its released
Week 53 payments may result in an underpayment or overpayment of tax for the year. This is due to HMRC guidelines specifying that a Week 53 payroll must be calculated on a Week1/Month1 basis. Thus giving an additional personal allowance to protect the level of take home pay the employee receives.
The yearly tax allowance is calculated on a 52 week year. i.e. The Tax Code 1150L gives the employee a tax allowance of £11,505 for the 2017/18 tax year spread over 52 weeks, giving a free pay of £221.34 per week. For a week 53 calculation, the employee is given an additional free pay allowance of £221.34, therefore increasing the yearly allowance to £11,731.02. The difference is what HMRC will be requesting.
An overpayment will occur if within the 52 week year, an employee has not reached the £11,505.
Please remember the HMRC servers are changing on the 14th February. If you still haven’t run the update please do. After the 14th you need the new server address to upload your HMRC returns (PAYE,VAT,CIS)