2014 Tax Credits To Be Calculated Using RTI
HMRC are now using the information provided by employers through the PAYE RTI system to calculate the amount of tax credits due.
Tax credits are due to be renewed by 31st July so this means that if you are an employer you could face questions from your employees soon.
What Questions?
The renewal notices sent out this year will include the gross pay for the year and will state on them that the information came from the claimants employer.
The claimants will be told to check that the figures are correct and there are a couple of reasons why they might not be accurate.
RTI is still relatively new so there could be errors or timing differences on the employers side but (and I’m sure this will shock most of you) there could be errors on HMRC’s side too, gasp! RTI is not problem free so I’m sure there will be quite a few errors which come to light.
What To Do
If your employee comes to you and says that they don’t think the figures on their tax credit renewal form are correct then you just need to check it against your PAYE records.
If the figure is correct then just tell the employee that the form is right.
However, if the figure isn’t right then make sure that they haven’t had any other income in the year as the form will show all sources of income, not just their employment income from your company.
Additionally, you will need to have a look at any benefits in kind they may have received as the value of some will be included in the gross figure. Here is what is included as income for tax credit purposes.
Once it has been established that there is an error then tell your employee to call the number on their renewal form and advise HMRC of the correct information. You do not need to contact HMRC personally, it is down to your employee to contact them.
For more information on how to renew tax credits this year please click this link.
I hope that there isn’t too much confusion caused by the new system this year but that remains to be seen.
Vikki
Did You Know?
Striped Leopard provide a payroll bureau service for many clients.
We can run your RTI PAYE scheme, provide your employees with payslips, P60’s, prepare P11D’s, advise you on all things payroll related and basically take away all of the hassle related to running your own payroll.
To find out more about what we do please click here