Day: June 23, 2012

RTI and the Universal Credit

Under the new rules companies submitting payroll payments to BACS will need to include additional information along with the BACS transaction including the payee’s tax code, pay to date and tax to date amongst other items of information. These new rules have been named RTI or Real Time Information by HMRC.

Migration started in April 2012 with an aim to have all companies migrated by the end of 2013.

RTI will:

  • make the PAYE process simpler and less burdensome for employers and HMRC; for example by removing the need for the end of year return (P35 and P14) and simplifying the employee starting and leaving processes
  • make PAYE more accurate for individuals, over time reducing the number of bills and repayments sent after the end of the tax year
  • enable HMRC to pursue late payments more effectively
  • support the payment of Universal Credits
  • reduce Tax Credits error and fraud

http://www.hmrc.gov.uk/rti/employerfaqs.htm

To enable RTI payroll providers and BACS providers are currently rolling out new software and applications.

The Universal Tax Credit will be launched in 2013 and will replace:

  • income-based Jobseeker’s Allowance
  • income-based Employment and Support Allowance
  • Income Support
  • Child Tax Credits
  • Working Tax Credits
  • Housing Benefit.

What’s different about Universal Credit?

The main differences between Universal Credit and the current welfare system are:

  • Universal Credit will be available to people who are in work and on a low income, as well as to those who are out of work
  • most people will apply online and manage their claim through an online account
  • Universal Credit will be responsive, as people on low incomes move in and out of work, they’ll get ongoing support – giving people more incentive to work for any period of time that is available
  • most claimants on low incomes will still be paid Universal Credit when they first start a new job or increase their part-time hours
  • claimants will receive just one monthly payment, paid into a bank account in the same way as a monthly salary
  • support with housing costs will go direct to the claimant as part of their monthly payment.

http://www.dwp.gov.uk/policy/welfare-reform/universal-credit/

steve@bicknells.net

ABI to withdraw notification of Bank’s interest on Insurance Policies

Since 1992, an agreement has been in place between the Association of British Insurers (‘ABI’) and the British Banking Association (‘BBA’) whereby a bank could notify its interest in relation to secured properties and the insurers would tell the bank of any cancellation or alteration in cover, with a grace period to allow the bank to arrange its own policy if the borrower had failed to maintain the required cover.

Last September the ABI announced that they were ending this agreement and that co-insured status either as Joint Insured or Composite Insured would be the only options open to Banks. These options are likely to increase insurance premiums.

Banking sources tell me that last week it was agreed that ABI would extend the agreement with BBA to December 2012, the BBA are yet to issue guidance and comment.

steve@bicknells.net