Author: Polaris Accountants

HMRC takes next step towards creating a digital future for taxpayers

HM Revenue and Customs (HMRC) today announced that it will bring some existing IT services under its direct control, while it continues to plan the transition to a new IT delivery model following the ending of the Aspire contract in 2017.

These changes will ultimately enable HMRC to make savings of up to 24 per cent on its £800m annual IT budget by 2020-21 while maintaining consistent delivery of services to customers.

Mark Dearnley, HMRC’s Chief Digital and Information Officer, said:

We have an ambitious digital vision – to transform our IT services and use the data we hold in smarter ways, so we can deliver world-beating digital services for our customers and colleagues.

The changes we’re announcing today will allow us to maintain consistency of service for customers while we plan for the future which, as now, will include a mixed model of both internal and external delivery using multiple partners.

HMRC also announced that Capgemini would be providing ‘test and release’ services until 2020, to provide vital quality assurance during the digital transformation.

HMRC has already launched exciting and innovative online services that are quicker, lower cost and have tax compliance and security built-in. New Personal and Business Tax Accounts – which work like online bank accounts, allowing customers to deal with all their tax affairs in one place – will be available to ten million personal customers and five million businesses respectively by early 2016.

The UK tax authority has a network of Delivery Centres – hi-tech innovation hubs, based across the UK – which developed an online tax credit renewals service used this year by more than 750,000 customers, with customer satisfaction rates reaching 90 per cent.

Notes to Editors
1. Follow HMRC’s press office on Twitter @HMRCpressoffice

2. HMRC’s Flickr channel: www.flickr.com/hmrcgovuk

3. The three services and the 250 staff working on them being transferred from Capgemini are:*
*Case Management, which offers a single, unified platform for handling compliance cases.
*Customs and International (Excite), which provides a wide range of services including managing the movement of duty-suspended goods and exchanging claims for VAT refunds between EU member state tax authorities.
*Third-party supplier contracts, which means HMRC will take direct ownership of contracts with third-party suppliers for a range of IThardware, software, services and consumables.

Measures to ensure people of receive fair pay announced

Business Secretary announces a package of measures to ensure hardworking people receive the pay they are entitled to.

A package of measures to ensure hardworking people receive the pay they are entitled to is being announced today (1 September 2015).

The measures include:
*doubling the penalties for non-payment of the National Minimum Wageand the new National Living Wage
*increasing the enforcement budget
*setting up a new team in HMRC to take forward criminal prosecutions for those who deliberately do not comply
*ensuring that anyone found guilty will be considered for disqualification from being a company director for up to 15 years

Business Secretary Sajid Javid said:

There is no excuse for employers flouting minimum wage rules and these announcements will ensure those who do try and cheat staff out of pay will feel the full force of the law.

This one nation government is committed to making work pay and making sure hardworking people get the salary they are entitled to.

A new team of compliance officers in HMRC will investigate the most serious cases of employers not paying the National Minimum Wage and National Living Wage when it is introduced in April 2016.

The team will have the power to use all available sanctions, including penalties, prosecutions and naming and shaming the most exploitative employers.

The enforcement budget for the National Minimum Wage and Living Wage will also be increased in 2016 to 2017. Future budgets will be agreed as part of the Spending Review process.

Employers who fail to pay staff at least the minimum wage they are legally entitled to will have to pay double what they do now. This reform is intended to increase compliance and make sure those who break the law face tough consequences.

The calculation of penalties on those who do not comply will rise from 100% of arrears to 200%. This will be halved if employers pay within 14 days. The overall maximum penalty of £20,000 per worker remains unchanged.

A new Director of Labour Market Enforcement and Exploitation will be created to oversee enforcement of the National Minimum Wage, the Employment Agency Standards Inspectorate and the Gangmasters Licensing Authority (a non-departmental public body of the Home Office). The Director will set priorities for enforcement based on a single view of the intelligence about exploitation and non-compliance.

A consultation will be launched in the Autumn on the introduction of a new offence of aggravated breach of labour market legislation. The consultation will also propose giving the Gangmasters Licensing Authority additional investigatory powers and a wider remit to tackle serious labour exploitation more effectively.

The government has also announced today it will improve the guidance and support made available to firms on compliance and will work with payroll providers to be sure payroll software contains checks that staff are being paid what they are entitled to.

Notes to Editors
1.HMRC currently enforces the National Minimum Wage on behalf of the Department for Business, Innovation and Skills.

2.It currently conducts a programme of targeted enforcement, proactively focusing on high-risk sectors. It is currently engaged in activity in the social care, hairdressing and retail sectors.

3.In 2013, the department introduced a policy of naming non-compliant employers. Since then, 285 employers, who have owed over £788,000 in arrears, have been charged over £325,000 in penalties. HMRC puts forward the most serious cases of non-compliance to the Crown Prosecution Service for prosecution.

4.In 2014 to 2015, HMRC investigated 2,204 cases; found arrears in 735 cases for 26,318 workers totalling over £3.29 million; charged over £934,000 in penalties.

5.The current National Minimum Wage rates are:

*adult rate (21 years old and over) – £6.50 per hour
*18 to 20-year olds – £5.13 per hour
*16 to 17-year olds – £3.79 per hour
*apprentice rate – £2.73 per hour

The apprentice rate applies to apprentices aged 16 to 18 years and those aged 19 years and over who are in their first year. All other apprentices are entitled to the National Minimum Wage rate for their age.