Employment Tax Advisory Services

Which employment tax issue can Aspire help you with?

  • Expense policies and procedures
  • Real Time Information (RTI)
  • Employment status
  • IR35
  • Pay As You Earn (PAYE)
  • National Insurance Contributions (NIC)
  • Income Tax (Earnings and Pensions) Act 2003

All about employment tax

How your tax is collected in the UK depends on your specific circumstances. People who are paid by companies that directly employ them are taxed at source, which means their income tax and NICs are taken from their pay before they receive it. This is the operation of the PAYE or Pay As You Earn system.

Those that work directly for employers are provided with tax codes, which determine how much income tax needs to be taken from their pay. They are also handed P60 certificates at the end of each year, which show their total gross pay and how much income tax they have paid. Some people also have to pay tax on certain benefits provided by their employers, which can include things like company cars, medical insurance, tips and low-interest loans.

Self-employed people and people who receive money through capital gains, income from rent or as distributions from a company are required to complete self-assessment forms to establish the correct amount of tax payable.

Income tax allowances

The standard UK personal allowance for 2017/18 is £11,850. This is the amount of money that an individual can earn each year without paying income tax. Those who earn between £11,851 - £46,350 are taxed at 20%, with those earning between £46,351 - £150,000 paying tax at 40%. Individuals earning £150,001 or more pay 45% on everything over £150,000.

What are payroll taxes?

Payroll taxes are taxes imposed on both employees and employers, including taxes that employers pay based on the wages of their employees as well as deductions from employee wages. Payroll tax includes taxes that employers are legally obliged to take from their employees’ wages as well as taxes paid by employers that are linked to employing workers.

What is IR35?

IR35 is a form of tax legislation designed to prevent tax avoidance. The legislation was introduced to clamp down on workers that supply their services through their own personal limited company that would be treated as an employee of the end hirer without the use of such an intermediary. HMRC has branded such workers as ‘disguised employees’. IR35 is designed to prevent avoidance of income tax and NICs, though genuine freelancers, consultants and contractors are said to have nothing to worry about regarding the legislation. It was also brought in to stop employers avoiding the provision of employment and benefits to their staff.

Why Aspire?

At Aspire, we can provide all the advice and assistance you need if you have a concern about any aspect of employment tax and wish to stay on the right side of the law. Aspire provide sound, accurate and beneficial advice that helps you make the right decisions on tax and finance, also offering services including employment law, HR and accountancy. To find out more about the employment tax advisory services that we offer, call 0121 445 6178, send an email to enquire@aspirepartnership.co.uk or complete the contact us form on our website.