From 1 September, the Trust Registration Service (TRS) expansion means more trusts will need to register with HM Revenue & Customs.

Introduced five years ago, the TRS makes the beneficial ownership of assets held in trust more transparent.

While many trusts have already signed up to the TRS, the expanding service remit now includes more trusts. 

What are the changes to the Trust Registration Service? 

From September, the requirement to register with the TRS will apply to all trusts, not only those with a tax liability. This includes trusts set up many years ago, which may have been forgotten about or left dormant, but remain extant.

This registration process has been open since 1 September 2021, but time is running out to complete it.

Will your trust need to register? 

Under the changes, only a limited number of exemptions exist. Therefore, you likely need to register. 

Other less common types of express trusts set up for specific purposes are also excluded from registration unless they are liable for tax. This rule change means that some offshore trusts will also need to register.

How do I register for the Trust Registration Service? 

To comply with the registration requirements, trustees need to input details of the settlor, trustees and beneficiaries into an online portal.

At a minimum, trustees will need to confirm on an annual basis that there have been no changes and notify the TRS of any changes within 90 days.

Some trusts may have already completed a 41G form containing some details. 

However, HMRC has confirmed that this did not collect sufficient evidence to meet the requirements of the new rules. Therefore, trusts that separately with HMRC previously must now use a 41G form and resubmit information via the TRS. 

HMRC strongly recommends that trustees familiarise themselves with the TRS system and obtain the information required to register before the September deadline.

Speak with our Tax Partner, Tim Cook, for further guidance on the expansion of the Trust Registration Service and the steps you must take to prepare.

Link: Manage your trust’s details

When HM Revenue & Customs (HMRC’s) current guidance on the tax treatment of tips and troncs was first published back in 2014, tips and troncs were paid almost exclusively in cash or through card transactions.

Of course, in the eight years since, things have changed dramatically and payments are frequently made via app-based platforms, whether for delivery drivers or waiting staff.

Now, HMRC has updated its guidance to take account of these changes and clarify the tax position that applies to different arrangements.

Importantly, the new guidance does not change the tax status of payments made through app-based platforms. Instead, it offers further clarification of the position and its application in various circumstances.

The two key takeaways are:

• Tips and troncs passed from an app to an employer without an independent tronc master are subject to National Insurance and PAYE, even if they are intended by the customer to be passed to a specific member of staff.
• Tips paid directly by third-party apps to employees are not subject to National Insurance and PAYE. The onus is on employees to notify HMRC of this income.

App-based tipping arrangements can be set up in many different ways, with seemingly small variations in how they’re operated having sometimes significant impacts on the tax positions of employers and employees alike.

It is crucial not to make assumptions about the tax status of any app-based set-up you are using as errors can lead to HMRC inquiries and potentially hefty penalties.

Contact Wilder Coe if you are looking for tax advice by dropping us an email to info@wildercoe.co.uk 

According to Small Business, we have seen a surge in new company formations over recent years as entrepreneurs develop innovative business ideas and bring them to market.  On top of this, many workers are scaling up their “side hustles” operations to deal with customer and client demand. Many businesses initially rely solely on the founder. However, there comes a time when operations must grow, and it is time to consider hiring their first employee. 

Hiring your first employee will lighten the workload, expand your business activity and bring new tax and payroll requirements. 

Here are some tips for bringing on your first employee:

Inform HM Revenue & Customs (HMRC)

Within four weeks of your new employee’s first payday, you must register as an employer with HMRC and gain an employer PAYE reference number for managing payroll. 

Although a quick registration process, it takes five working days to get the receipt of your reference number. 

Utilise effective payroll processes 

You must manage payroll each month, report this information to HMRC, make accurate tax and National Insurance payments, and pay into any benefits or pension schemes. 

You will need to implement processes and payroll software systems that allow you to do this efficiently. Your existing system for managing your payroll might not be sufficient when hiring employees, so speak to your accountant or contact our Accounting Support team for guidance. 

Do not forget that you may need to deduct student loan repayments, pension contributions, Payroll Giving donations and child maintenance payments. 

Payroll administration can be time-consuming and often complex, with the regular rule change to legislation. Many growing organisations look to outsourcing payroll requirements to focus their energy on business growth. 

Set up a workplace pension scheme

If your workers are eligible for a workplace pension, you will need to set up and manage a scheme for them.

You must automatically enrol your staff into a pension scheme and make contributions to their pensions if all of the following criteria apply:

• They are classed as a ‘worker’
• They are between 22 years old and the State Pension age
• They earn at least £10,000 per year
• They usually (‘ordinarily’) work in the UK

Your employees can opt out and leave the scheme, but you will still need to re-enrol them every three years.

If you need advice on auto-enrolment and workplace pension schemes, please speak to Kasia Field. 

Paying the National Minimum Wage

You are legally required to pay your employees at least the correct National Minimum Wage (NMW) or National Living Wage (NLW) for those aged 23 and above. Failing to do so could result in you being fined and publicly named and shamed.

The current NMW rates, as of April 2022, are as follows:

If you are making deductions other than for income tax, NICs or these exceptions, be careful and do not reduce a worker’s pay below the National Minimum Wage. 

Protect your business

Although not directly tax or payroll related, businesses should take steps to protect their interests, including:

• ensuring new staff members have the correct legal status to work in the UK
• producing clear, written employment contracts and policies 
• taking out employer’s liability insurance in case of accident or injury at work.

Failing to take these steps could leave your business exposed to costly risks, including fines and potential compensation payments.

Seek help

As a prospective or new employer, these are only a few considerations for growing your business venture. We advise you seek payroll, HR and tax advice before hiring your first employee; to protect yourself and remove any administrative burden. 

At Wilder Coe, our business advisors assist clients of all shapes and sizes to grow their organisations. Contact us here for a free consultation so we can understand your individual needs and deliver bespoke advice.

Link: Becoming an employer for the first time? What you need to know

HM Revenue & Customs (HMRC) is retaining its online portal for workers to continue claiming the working from home tax relief for the 2022/23 tax year.

Whilst the rules and relief value remain unchanged, far fewer people like to claim this relief. 

Unless another lockdown occurs, only people instructed by their employers to work from home, some or all the time, can make a claim.

The rules require that costs must have increased due to the instructed arrangement. Most hybrid workers are now free to work in the office if they wish; if you opt for this situation you are no longer eligible for the relief.

Through the online portal, workers can claim relief worth £6 a week without needing evidence of increased expenses. Taxpayers benefit according to the rate at which they pay income tax. A basic rate taxpayer will save 20 per cent of £6 a week (£1.20).

If you have been instructed to work from home and have incurred increased costs, you can check your eligibility and claim here.

Are you an employer looking for HR guidance on hybrid-working policies and contracts for your staff? Do you require advice on claiming expenses from our tax team? Get in touch with us here.

Throughout the pandemic, the Government has offered £79.3bn in loans to help businesses survive and invest for the future. 

However, only the Recovery Loan Scheme remains open until the end of June – with no replacement lined up to take its place. 

Despite the popularity and value of these loan schemes, many small businesses are concerned they will struggle without access to the finances they need.

Government officials are now in talks with the banking sector to see if it is possible to make these small business loans a permanent fixture. 

According to the Financial Times, the loans could mirror previous COVID financial support schemes. A close source to the talks told the newspaper that the focus of any future funding is on growth rather than business survival – which was the case for the previous loan schemes. 

Among the questions asked are what level of support will the Treasury set, whether personal guarantees are needed and what sort of companies should be eligible.  

We hope that additional details on any potential new loan scheme will be announced publicly in the next few months. Although, some abuse concerns remain after the Department of Business Energy and Industrial Strategy (BEIS) revealed that £4.9 billion could be unrecoverable from the £47.4 billion Bounce Back Loan scheme. 

According to a senior industry executive in the FT article, British banks have lent more than £3 billion under this scheme. The Recovery Loan scheme, which guarantees 80% of a bank loan up to £10m, is in place until 30 June to support those in need. 

Are you looking for business recovery guidance? If your organisation is seeking help after COVID-19 to rebuild and grow, speak with our advisors today.

Wilder Coe has supported many clients throughout the pandemic and implemented the necessary steps for recovery.

Link: Treasury small business loans could be permanent

Are you or your clients making PAYE payments to HM Revenue & Customs (HMRC)?

Fresh warnings are out by HMRC to remind employers to ensure that their payment reference numbers are correct so that payments are recognised.

Each payment reference number relates to a specific employer and covers a particular accounting period.

HMRC uses these reference numbers to allocate payments and help process taxes related to PAYE payments as quickly as possible.

The tax authority has stated that using the incorrect PAYE reference number may lead to penalties and charges even if an employer has paid on time.

Online banking services may also default to a previous payment reference creating additional confusion and complications. Employers must check this is right every time they make a payment to HMRC. 

How to check if the payment reference number is correct?

Are you using the correct Accounts Office reference? You can find this on:

• The letter HMRC sent when they first registered as an employer
• The front of their payment booklet
• The letter from HMRC that replaced the booklet
• Their Business Tax Account if they’ve already added Employer PAYE enrolment to it.

As an employer, where you are not paying for the current period, you need to add four additional characters to the end of the reference number indicating the payment year and month. 

Each tax period has a different payment reference number, so you must make separate payments in each period. 

Ensuring you use the correct reference can be complicated. HMRC wants to make sure that employers get this right and avoid penalties and, therefore, encourage businesses to use its ‘Pay now’ tool on GOV.UK to find the correct reference number to use each time.

If this is a further admin burden you don’t need when trying to run a business, get in touch with us today to find out how we can take payroll headaches off your plate.

Link: Support from HMRC