You need to tell HM Revenue and Customs (HMRC) straight away if you stop employing people.
Closing your PAYE scheme
You need to submit a final payroll return – either a Full Payment Submission (FPS) or Employer Payment Summary (EPS). You should:
- deduct and pay any outstanding tax and National Insurance to HMRCwithin 17 days (or 14 if you’re paying by cheque)
- select the ‘Final submission because scheme ceased’ box
- put the date you closed your PAYE scheme in the ‘Date scheme ceased’ box – you can’t put a date in the future
You also need to:
- send your expenses and benefits returns
- enter a leaving date on each employee’s payroll record
- give your employees a P45 on their last day – most payroll software can produce a P45 for you or you can order them from HMRC
If you start employing anyone in the same or next tax year, you should reopen your PAYE scheme by sending an FPS with your PAYEreference.
If you temporarily stop employing staff
Your PAYE scheme continues to run if you stop employing staff for less than a whole tax year (eg if you run a seasonal business). You don’t need to give your employees a P45 if you keep them on your payroll.
More details can be found here
A workplace pension is a way of saving for your retirement that’s arranged by your employer.
Some workplace pensions are called ‘occupational’, ‘works’, ‘company’ or ‘work-based’ pensions.
If you change jobs
Your workplace pension still belongs to you. If you don’t carry on paying into the scheme, the money will remain invested and you’ll get a pension when you reach the scheme’s pension age.
You can join another workplace scheme if you get a new job.
If you do, you may be able to:
Ask your pension providers about your options.
If you move jobs but pay into an old pension, you may not get some of that pension’s benefits – check if they’re only available to current workers.
If you worked at your job for less than 2 years before leaving, you may be able to get a refund on what you’ve contributed. Check with your employer or the pension scheme provider.
You can find out more details about Workplace Pensions here
Last Thursday we had a trip out to Women’s Work, Derby to the presentation of the Andrew Buxton Memorial Award 2017. The certificate and cheque were presented by Mrs Janet Buxton.
They won the award for presenting the best-kept set of accounts this year. One might think that this is the sole responsibility of the Finance Officer, but they are only able to do their job well if the rest of the team work with them. Women’s Work Derby are a shining example of how to work as a team, and their award is well deserved.
Again, it’s nothing to do with acrobatics – but we liked the picture!!
The balance sheet is the second-most-important financial statement that an accounting system produces, after an income statement. A balance sheet reports on a business’s assets, liabilities, and reserves at a particular point in time
- The assets shown on a balance sheet are those items that are owned by the business, which have value and for which money was paid
- The liabilities shown on a balance sheet are those amounts that a business owes to other people, businesses, and government agencies
- Reserves are the amounts that the charity has generated over the lifetime of its existence
As long as you understand what assets and liabilities are, a balance sheet is easy to understand and interpret
No, it’s nothing to do with acrobatics!
A trial balance is a useful tool and the essential first step in developing your financial reports.
What is a ‘Trial Balance’?
Basically, a trial balance is a worksheet prepared manually or generated by your computer accounting system that lists all the accounts in your General Ledger at the end of an accounting period (whether that’s at the end of a month, the end of a quarter, or the end of a year).
If you’ve been entering transactions manually, you create a trial balance by listing all the accounts with their ending debit or credit balances. Then, you total the debit and credit columns. If the totals at the bottom of the two columns are the same, the trial is a success, and your books are in balance.
WARNING – A successful trial balance is no guarantee that your books are totally free of errors; it just means that all your transactions have been entered in balance. You still may have errors in the books related to how you entered your transactions
The P45 is a certificate which contains earnings and tax payments over the financial tax year up until when an employee leaves a job, and it is issued to employees by the employer. Form P45 shows how much tax has been paid on their salary for the current tax year.
You must give all employees a P45 when they stop working for you. You can either:
You can’t download blank P45 forms
You can’t get a replacement P45. Instead, you can use a ‘Starter Checklist’ (link below) or ask your employee for the relevant details about their finances to send to HM Revenue and Customs (HMRC)
Use this form if you’re an employer and need to record information about a new employee for PAYE
Our training courses this year have again been very popular.
Here is some feedback from course participants in our recent
Business Planning Course
We hope to resume our training courses early in 2018, so if you would like to be put on the waiting list, or have other financial training needs, please contact us here
If your charity’s income is under £500,000 (and providing it doesn’t have assets worth more than £3.26million), prepare a simple report including:
- your charity’s name, registration number, address and trustee names
- its structure and details of how it is managed, including how it recruits trustees
- its activities and objectives in the year
- its achievements and performance, including reporting on its public benefit
- a financial review including any debts and details of your reserves policy (if applicable)
- details of any funds held as a custodian trustee
You can put more detail into your trustees’ annual report if you want to. You only have to send a copy to the commission with your annual return if your income is more than £25,000. But you need to send the commission a copy if it asks for it.
Click here for a template Trustees’ Annual Report for small charities
One of the most important tasks in preparing accounts for Independent Examination is Bank Reconciliation
A Bank Reconciliation is used to compare your records to those of your bank, to see if there are any differences between these two sets of records for your cash transactions. The ending balance of your version of the cash records is known as the book balance, while the bank’s version is called the bank balance. A monthly reconciliation helps you identify any unusual transactions that might be caused by accounting errors or fraud.
Our training manual “The Adventures of Mr Claw in the World of Charity Accounting” explains Bank Reconciliation and Statement production, and how to implement these procedures in to your organisation’s accounting procedures. Get your copy here
Our Summer Newsletter 2017 is now ready, and those on our mailing list should have already received their copies.
If you want to read it online, click here Summer 2017 Newsletter
If you would like to be added to the mailing list, let us know here
Articles in this issue include:
- Right to Work in the UK
- The Andrew Buxton Memorial Award 2017
- Inspiring Public Confidence in Your Charity
- People and Skills – Vetting Potential Trustees