COMPANY CAR? GEAR UP FOR CHANGE…

TODAY’S BLOG

COMPANY CAR? GEAR UP FOR CHANGE..

Do you drive a company car? do you know your NDEC from your WLTP? You now need to.

Emissions, emissions…

For many years, company car tax scales have been based on CO2 emission levels, with a supplement (currently 4%) for most diesels (although a handful of new diesels now escape this surcharge). The emissions were measured under the New European Driving Cycle (NDEC) test, which produced results increasingly at variance with the real world.

In response, a new testing regime has been developed, the World harmonised Light vehicles Test Procedure (WLTP). Unsurprisingly, this test reveals much higher emission levels than the NDEC – about 15%-20% more, with the greatest increase for cars with the smallest engines.

Company car changes

For company cars registered from 6 April 2020, the WLTP CO2 emission figure will be used in determining company car tax rates. However, for cars registered before that date, the old NDEC measure will continue to apply. As a result, from 2020/21 onwards there will be two sets of company car scales, one WLTP scale for cars registered on or after 6 April 2020 and the other NDEC-based scale for older cars. For any given level of emissions, in 2020/21 the WLTP percentage charge is 2% lower than the NDEC charge, although this difference will be phased out over the following two tax years.

Electric and Hybrid Cars

6 April 2020 will also see a change to the tax treatment of electric and hybrid cars. The charge for all pure electric cars will drop to zero – good news for Tesla – while for hybrid cars with CO2 emissions of 1-50g/km, the scale charge will be based on the vehicle’s electric-only range. For hybrids there will be separate NDEC and WLTP scales, with both offering no discount if the hybrid cannot run at least 30 miles on battery power alone.

Action

The company car tax regime has become much stricter over the years and there is some evidence that more employees are choosing cash rather than car where they have the option. You may want to join them.

If you are due to change your company car soon, make sure you understand the tax consequences of any choice you make. If you are thinking about an electric car and the required charging points at your home or office, the Pod Point website is worth having a look at. They also have a guide that gets fairly regularly updated on different types of electric cars. I haven’t used Pod Point and am not endorsing them (or paid by them) but you may find their information helpful.

Of course if you wish to see the Tesla range….

Dominic Thomas
Solomons IFA

You can read more articles about Pensions, Wealth Management, Retirement, Investments, Financial Planning and Estate Planning on my blog which gets updated every week. If you would like to talk to me about your personal wealth planning and how we can make you stay wealthier for longer then please get in touch by calling 08000 736 273 or email info@solomonsifa.co.uk

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COMPANY CAR? GEAR UP FOR CHANGE…Dominic2025-01-21T16:33:59+00:00

HOW TO FIND THAT LOST PENSION

TODAY’S BLOG

HOW TO FIND THAT LOST PENSION

I make no apology for pinching this really helpful piece from Henry Tapper and People’s Pension. I have a very high regard for Henry who constantly attempts to bring clarity and insight in plain language to anyone that comes into contact with the world of financial services. Henry set up Age Wage Ltd which hopes to revolutionise pension advice for smaller investors. His blog is hugely successful (if the number of visits is any indication). A former Bryanston pupil and Cambridge Graduate with a penchant for messing around in boats, here is his post from Wednesday. Over to Henry…

The DWP tell us that we’ll have lost 50m pension pots by 2050, unless we do better at tracking them down than we’re doing at the moment! There’s £20,000,000,000 of lost money in the pension system at the moment so let’s get finding! The dashboard ‘s going to help but – why wait for the dashboard!

Here are some handy tips from our friends at People’s Pension about how we can find our pensions today.

HOW ARE PENSIONS LOST?

People Pension’s research found that 1 in 5 people have lost track of a pension and 3 in 5 adults don’t know where all their pension savings details are.

So, why are people losing track of their pension pots?

Not sure who you’ve got pension savings with?

You may have changed jobs several times by the time you retire, so you could find yourself having to look for all your lost pension savings when you need it the most.
You may have moved house, misplaced the details and no longer receiving annual pension statements from your provider(s).
Pension scheme information can become lost as many people now choose to go paperless, so there’s emails to keep track of as well as paperwork.

How to trace lost pension savings

Finding the details of a lost workplace pension can be a little easier than finding the details of a personal pension. Often your employer, or former employer (if they are still in existence), should have the details of their pension provider.

It can often be a little bit more difficult finding the details of a lost personal pension. A good place to start would be to contact the pension provider that you set up the personal pension with.

Next steps

Start at home – dig out as much paperwork as you can and see if you can find the details of any pensions you have forgotten about.
Take a look at any previous employment contract and old payslips and check if there were any pension contribution deductions. If so, and you haven’t taken a refund, you could have a pension you’ve forgotten about.
Contact your previous employers and ask for the details of their pension schemes. They’ll be able to give you the pension provider’s contact details, so you can contact them directly to find out if you were a member of a pension scheme.
And you can use the Companies House website – they hold the names of all closed and existing companies registered in the UK.
If you are still having difficulty finding the details of a lost pension, you can use the government’s online pension tracing service.

Visit their website www.gov.uk/find-lost-pension or call them on 0845 6002 537.

Check if your pension contributions were refunded

In the past when leaving an employer, you could have had a refund of your pension contributions after only being in a pension for a short time.

So, it’s important to consider whether your pension is actually lost, or if your pension contributions could have already been refunded.

There are several key dates to help you check whether this applies to you:

If you left your employer before 1975: it’s almost certain that you’d have had a refund of your pension contributions. If you did not pay into the pension scheme, then the chances are you will not be entitled to anything – the only exception will be if you worked there for a considerable amount of time, usually over 15 years.
If you left your employer between April 1975 and April 1988: you may have a pension if you were over the age of 26 and had completed over 5 years’ service. If not, it’s almost certain that you’d have received a refund of your pension contributions.
If you left your employer after 1988: you may be entitled to a pension, as long as you completed over two years’ service for your employer. If you left before completing two years, it’s almost certain that you’d have received a refund of your pension contributions.

If in any doubt you should contact any previous employer(s) for absolute clarification.

Take a look at the steps below if you think you have a lost pension and don’t think you’ve received a refund.

Once you’ve found a lost pension provider’s details

You’ll need to contact them to give them as many details about yourself, so they can trace your lost pension savings quickly and easily. They’ll need:

your name (current and previous, if different) date of birth and National Insurance number
your address (current and where you resided when you think you had the lost pension)
the date you joined and left the pension scheme (if known).

And if it’s a workplace pension:

the name of the company you worked for
the address of the company you worked for (in case your company had multiple branches/outlets)
the date you began working for the company and the date you left the company.

Find out as much information as you can

It’s important to find out as much information as possible about any pension scheme you may be part of. For example, you should ask:

what’s the current value of the pension pot, and the estimated value on your expected retirement date?
are there any management charges, and if so, how much?
is there a nominated beneficiary?
is it a defined benefit scheme or a defined contribution scheme?
would there be any charges if I wanted to transfer the pension pot to another provider?
are there any pension guarantees included e.g. Guaranteed Annuity Rates?

Once you have the full details about your lost pension savings, you may wish to get advice. You could choose to leave it as it is until you reach retirement age or, if you have other pensions, you could consider combining them into one pot – making it easier to manage and keep track of.

Henry Tapper
Age Wage Ltd

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PRIVACY POLICY | DATA PROTECTION

HOW TO FIND THAT LOST PENSIONDominic2023-12-01T12:17:13+00:00

“What have I missed about auto enrolment?”

What have I missed about auto enrolment?

Yesterday I suggested that auto enrolment was not really about pensions, that’s because despite it being about setting up a pension, the real emphasis is much more about communications with staff and with Government agencies. The new system is rather like PAYE, though nothing quite as simple. I have come up with 11, that’s eleven, key issues where auto enrolment will challenge your business or charity.

Contracts of employment

Contracts of employment will need to be altered reflecting the new pension arrangements; this may be a difficult discussion depending upon your type of business and workforce. Do you need to get the help of HR or even legal advice to do this properly?

Pay reviews and salary sacrifice

Some employers may use this as an opportunity to consider “salary sacrifice” or “salary exchange” this is a bizarre scenario where having a reduced gross income with the reduction paid into a pension, saves both employer and employee national insurance contributions and PAYE, yet invariably the net pay is a bit more, with more money going into a pension. Odd but true.

Payroll integration, live and up to date

Your payroll software will need to be able to integrate the new scheme, if you are a small firm and outsource this to your book keeper or Accountant; they need to be up to speed and have software that does the job.

IT overhaul

Schemes will be managed online and the Pension Regulator may demand data going back 6 years in a format that they can readily use). This therefore has implications for your IT systems and security and in particular how you hold and backup your data about staff.

Garbage in, garbage out?

Communication with staff is also a big deal. You need to be able to evidence that you have provided all of the relevant information to your staff, email is the most obvious and cheapest delivery option, but we all know that not everyone uses email or has provided you with an up to date email address, so do you need everyone in the business to have a company email address, and what happens when they leave? Do you maintain records properly?

Money Laundering

As a pension is an investment, there are issues about possible Money Laundering and politically exposed people. As an employer do you have evidence that you have done thorough identity and residency checks? Can you prove this? This will also identify any illegal immigrants or visa’s that have expired.

Staying silent and impartial

You might see auto enrolment as a valuable part of your staff package, however some see it as another tax and a whole lot of bureaucracy. You are not permitted to give advice about pensions or entice or discourage staff from joining the scheme. This isn’t just frowned on, it carries hefty financial penalties if revealed.

Disgruntled employees

Non compliance with the rules is a dangerous approach. You may believe that you know your staff, but perhaps you should reflect on what could go wrong for you if a member of staff falls out with you, or is just plain awkward anyway (these people do exist in 2014) so make sure you have complied and that you can demonstrate that you have done so. It is pointless to ask for a bullet proof vest after the event.

Tax triggers

You may not be aware that some people have very large pension scheme benefits. The Lifetime Allowance has reduced and will reduce again in April. Some people have protected their larger allowances, but should they accidentally enrol into a new pension, this would scupper their plans. This could trigger enormous tax penalties (55% of £1m for example) and you won’t be terribly popular with the employee that is presented with such a bill because you didn’t communicate well enough.

Honest guv….

The cynic in me might suggest that this is another way to join-up the Government agencies, which is fine if you are doing everything properly (unless you have concerns about information flow) but of course will catch out more people that have undeclared earnings anywhere.

Impacting your budgeting

Finally, don’t rely on your costs being 3% of your payroll. It is likely that contributions levels will be raised above 8%, in Australia (where they have had compulsory pensions since 1992) employers now contribute 9.25%. You ought to allow funds for the scheme and your systems to be reviewed and of course you might be wise to provide seminars or meetings for your staff to ensure that they understand their pension.

So, auto enrolment is about pensions… well yes, but it is also about rather more besides.

Dominic Thomas: Solomons IFA

“What have I missed about auto enrolment?”Dominic2023-12-01T12:38:57+00:00

I have plenty of time to sort out auto enrolment right?

Love it or loathe it, auto enrolment is under way. The biggest companies and organisations are now running their schemes. As an employer you may be thinking that you have plenty of time to sort out your auto enrolment, you don’t. On the face of it one would think that setting up a pension for everyone to be opted in from the outset would be straight-forward (if I were King…) however there are all manner of obstacles to overcome, many of which employers are not terribly aware of. The truth is that this is not really about pensions, but about compliance and communication. Whilst the process is dressed as a pension, the reality is that the pension bit is probably the easiest element to resolve.

The real issue is to ensure you are compliant with the rules. This means not being late for your date, that is your staging date (find it here). If you are a small firm with 4 or fewer staff the fixed penalty is £400 and then £50 a day. If you have 5 staff its £500 a day, rising to £10,000 a day for firms with 500 or more staff. So it simply isn’t worth being late and in practice the entire process is likely to take 12 months from start to “implementation” and rather like having a baby, the pregnancy and then birth is not the end of the job… its an ongoing process, requiring a lot of time, effort and understanding.

So in preparation (the pregnancy part) quite a lot needs doing, this is where a financial adviser can help, though many employers will hope that they don’t need assistance, they probably will. In this analogy (and I don’t want to stretch it too far) the financial adviser is rather like the local GP, who is involved with the care, monitoring and progress and the life-long after care, but the parents (the employer) carry the responsibility.

To make matters harder there are a lot of companies all trying to do the same thing at the same time. Staging dates have been staggered, but there is a genuine problem with capacity. An estimated 1.4million firms will be attempting to bring their schemes into life. This is not going to be easy and most of the pension companies that you have heard of are alarmed at the prospect and cherry picking those that they want to work with, some are also simply closing the doors. This will leave pensions that you haven’t heard of as your main choice. Here is a chart showing the staging dates over the next 3 years by quarter. So you are just going to have to trust me on this – get on with the process, wave of applications is going to cause all sorts of capacity problems for pension companies.

So, let’s see how far I can get away with the analogy…whilst you have be currently of the view that you are searching for a new date (Valentine’s is shortly upon us) you are actually already in an arranged marriage and fairly stern in-laws have planned the baby-shower and booked a hotel to be near your local maternity ward…. Well maybe it doesn’t work too well as analogy, but you get the point. Time is running out whilst auto enrolment provides the opportunity for opting out (by employees) employers are not permitted to do the same and under no account permitted to influence employees.

Tomorrow I will outline some of the key issues that have little or nothing to do with pensions, but everything to do with compliant auto enrolment… after all how many small firms can afford fines of £15,000 a month?

Dominic Thomas: Solomons IFA

I have plenty of time to sort out auto enrolment right?Dominic2023-12-01T12:38:57+00:00

Auto enrolment – fools rush in?

If you are not drawing your State pension, then by now you should have picked up that pensions are changing – again! This time rather than making employers set up a pension that nobody might use, they have decided to force employers to set up a pension that everyone in that firm will use (unless they have an exemption or opt out). This will include mandatory contributions, which will be 3% from the employer and 5% from the employee (eventually). Whilst the employee can opt, he or she will be opted back in after 3 years (with the option to opt out again) – the ideal being that eventually you will forget and naturally begin building up a pension. Auto-enrolment is the path of least resistance.

Employers have begun (well some months ago) asking about AE. To say that there have been teething problems for the first of the large schemes would be an understatement. So today Steve Webb has intimated that SMEs will have a more simplified approach – now please note that AE is already meant to be a “no brainer” with no question asked other that “do you want in or out?”. I am left perplexed at what other new idea could be so simple… perhaps reforming NI and collecting payments directly would be sensible? I suspect that such “radical thinking” would be rather unwelcome. Anyhow when any Government uses terms like “simplified” or “simplistic” my cynicism really kicks in, as invariably this is code for “we have no idea of the consequences” but someone at a think tank thought this would work.

I am attending another presentation on AE next week, I am hoping that this will provide better insight into the latest “alteration”. I freely confess that it is better to change and adapt based upon experience, but for once, it would be nice to have some firm guidelines so that we all know where we stand..

Auto enrolment – fools rush in?Dominic2023-12-01T12:23:27+00:00