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Auto Enrolment was brought in by the government in October 2012 to ensure employees save into a pension. It began with larger companies and has gradually been phased in so that all employers, regardless of size, will be included. 2016 and 2017 will see a huge wave of over a million SMEs reach their staging date, so it’s vital that you’re prepared.

All employers will be required to assess their workforce and set up a compliant pension scheme. 

Workers must be automatically enrolled if:
• They are between 22 and State Pension age.
• They earn at least £10,000 a year.
• They work in the UK.

Workers who meet the criteria will need to have their contributions calculated through payroll software, then submitted to the pension provider. Employee and employer contributions will be set at 1% each initially, and will gradually increase over the next few years.

Workers who have been enrolled can opt out and those who do not comply can opt in, so these facilities need to be in place.

NB: If you use HMRC’s Basic PAYE Tools please note that HMRC have not yet developed any add-on feature to deal with assessment, although this link suggests it is in the pipeline. It may be worth considering your options in the meantime, so feel free to speak to us for more info.

When do I need to act?

To find out when your staging date is for Auto Enrolment go to The Pension's Regulator's staging calculator. You will need to enter your PAYE reference.

It is advised that you start putting things in place around 6-12 months prior to staging to ensure everything is set up in time. The Pensions Regulator will issue fines for non-compliance so it’s worth making sure that you have ticked all the necessary boxes. See this link for what you need to do and when.

It’s worth noting that you can look into pensions and set everything up yourself – it’s not a legal requirement for you to seek financial advice first.  However, this can be a complicated and time-consuming area, so even though it may prove more costly, it may save you an awful lot of time if you seek advice/pay for someone to set everything up for you.

The Pensions Regulator provides a lot of advice on choosing a scheme and setting it up yourself and there are numerous companies offering Auto Enrolment solutions on the web.

Currently individual landlords receive tax relief at their highest rate of income tax on all of the interest they pay to finance their letting business. From April 2017 the amount of interest that will be eligible for tax relief at the marginal rate will be restricted to the following:

• 75% of the interest paid in 2017/18

• 50% of the interest paid in 2018/19

• 25% of the interest paid in 2019/20

The balance of the interest will be eligible for 20% tax relief in each case. From April 2020, only basic rate tax relief will be available for interest.

Tip: Review the funding structure for your buy-to-let business.

From Tait Walker’s ‘Summer Budget 2015’

The HMRC benchmarking team is targeting more trade sectors and extending it to VAT returns.

There’s nothing new about benchmarking. In looking at taxpayers’ accounts, HMRC staff have always used a variety of business ratios to identify businesses falling outside of expected norms – as explained in HMRC Enquiry Manual. What’s new is that HMRC’s use of technology for risk analysis is becoming ever more sophisticated, and the threat of HMRC enquiries on client records is becoming more real.

A case of private residence relief illustrates the kind of evidence needed to support a main residence exemption. What should clients be compiling ?

Helpfully a court tribunal has made a few suggestions of the kind of documentary evidence that clients could retain to support a claim for PRR. These include:

• letters received when living at the premises
• photos of clients in occupation
• witness statements
• TV licence
• utility bills
• car registration address
• address for any refurbishments
• council tax correspondence
• insurance documents.

Whilst none of these factors determine a main residence in its own right, each piece of the jigsaw contributes to the overall picture.

According to HMRC, agents can now print off a client’s tax calculation from its website to support mortgage applications. But is this really the case ?

The problem is that the SA 302s are difficult to get hold of, as HMRC will only automatically issue them when a paper tax return has been submitted. As most agents submit TR’s on-line no SA302s will be issued automatically. The agent has to ring HMRC – and we all know how long that can take !
There have been some impractical attempts at a solution but the best one remains for the client has to call HMRC, sorry but we are really still no further forward. However, in some cases if you state that you need the form urgently they will be able to fax it over to you the same day.