Is your tax code correct? New Disability Confident guidance for employers and R&D tax relief information, plus be aware of a safety notice issued on thermites
Today we assist you in making sure your tax code is up to date to help you ensure you are paying the right amount of tax. Plus, we share the government’s latest guidance for managers to help them ensure their business is Disability Confident….read on to find out much, much more!
Have you checked your tax code?
Prior to the tax year starting each 6 April, HM Revenue and Customs (HMRC), will issue new tax codes to employees, usually where there is a change of tax code.
These tax codes, a series of letter and numbers, allow employers to deduct the right amount of tax to be deducted from each employee when the payroll is run. That is, unless the tax code isn’t correct. Therefore, it pays to check that the tax code has been calculated correctly.
The tax code notice usually sets out what has been included. For instance, it will usually include a person’s annual tax-free personal allowance.
What do the numbers and letters making up the tax code mean?
Numeric component
This usually represents the amount of tax-free income an individual is entitled to in a tax year. For example, a tax code of 1257L indicates a tax-free allowance of £12,570 for the tax year.
Letter component
This letter indicates specific circumstances or adjustments that apply to the individual’s tax code.
Some common letter codes include:
- L – the individual is entitled to the basic tax-free allowance.
- M – marriage allowance is being transferred from a spouse or civil partner.
- K – additional deductions are being made from the individual’s pay, such as underpaid tax from previous years or tax on benefits in kind.
It is important to check that a tax code is correct to avoid overpaying or underpaying tax.
If an employee believes their tax code is incorrect or needs adjusting, such as due to a change in personal circumstances or income, they can contact HMRC directly to request a review or update of their tax code. HMRC will then make any necessary adjustments and send an updated tax code to use in subsequent payroll calculations.
If you need any help with your own or your employees’ tax codes, please do not hesitate to contact us. We will be very happy to help you.
Is your business Disability Confident?
New Disability Confident guidance has been published to help managers recruit, retain, and foster the progression of disabled people and those with health conditions in the workplace.
The Disability Confident scheme is voluntary and helps employers make the most of the opportunities that can come from employing and developing disabled people.
The new guide has been produced jointly by the Department for Work and Pensions (DWP) and the Chartered Institute of Personnel and Development (CIPD). Its objective is to help employers and employees get the most from the Disability Confident scheme, boost disability employment and reduce the disability employment gap.
The guide covers subjects such as why it makes good business sense, what the role of the manager is and legal responsibilities and definitions.
There are practical tips and advice on language and behaviour, as well as examples of the reasonable adjustments an employer might make.
It can be challenging to attract a sufficiently wide range of applicants when recruiting, so the guide provides advice on how this can be done more effectively to reach more people. Top tips are available too to help with welcoming a new starter.
Advice on how to handle an employee disclosing a disability or long-term health condition is included in the guide, and it also sets out what can be done to help with career progression.
Being a Disability Confident business can not only help more disabled people and those with long-term health conditions to improve their lives through work, but it also makes good business sense.
The practical guide for managers can be found here: https://www.gov.uk/government/publications/disability-confident-and-cipd-guide-for-line-managers-on-employing-people-with-a-disability-or-health-condition/guide-for-line-managers-recruiting-managing-and-developing-people-with-a-disability-or-health-condition#recruiting-people
Further details on the Disability Confident employer scheme can be found here: https://www.gov.uk/government/collections/disability-confident-campaign
New R&D tax relief guidance available
For accounting periods beginning on or after 1 April 2024, a new merged scheme for research and development tax credit comes into force.
The new merged scheme replaces the old RDEC and small and medium-sized enterprise (SME) schemes.
The new scheme reduces the amount of benefit that would generally have been received under the old scheme.
Loss making R&D intensive SME companies can also benefit from additional support through Enhanced R&D Intensive Support (ERIS). Broadly speaking, if a company’s R&D expenditure amounts to at least 30% of its total expenditure then it may qualify as R&D intensive.
HMRC has published guidance on how to claim, but if you need any help with an R&D claim or wonder if your business could make a claim, please contact us at any time and we would be happy to help you.
Guidance on the merged scheme and ERIS can be found here: https://www.gov.uk/guidance/research-and-development-rd-tax-relief-the-merged-scheme-and-enhanced-rd-intensive-support
Safety notice issued on thermites
The Health and Safety Executive (HSE) have issued a safety notice about the manufacture, storage and carriage of thermites and thermite containing articles.
Thermites are a type of pyrotechnic composition that produces intense heat and molten metal. In use, they can reach temperatures of several thousand degrees Celsius, which makes them useful in welding, metal cutting, demolition, mining and special effects applications.
HSE has identified that thermites, and thermite containing articles, that should be described as Class 1 dangerous goods (explosive) are instead being transported as either non-dangerous or as Class 4.1 dangerous goods (flammable solids).
This misclassification can result in additional hazards for people working throughout the transport industry as well as for emergency services who may need to attend an incident. It may also mean that appropriate safeguards are not put in place for workers and other people at affected factory or warehousing sites.
HSE are urging businesses to ensure that thermites and thermite containing articles are properly classified.