Archive for December, 2009

Some of the information that was made available immediately at the time of the Pre-Budget Report has now been made clear. The rates of SMP etc are increasing marginally from April but the rate of SSP is not changing. The regular annual changes to various employment law payments have also been announced – and some are going [...]

The weekly rates of Statutory Maternity/Adoption/Paternity Pay and Maternity Allowance are increasing by 1.5% from week commencing Sunday, 4 April 2010, despite negative retail price inflation at September 2009 (-1.4%).  The new weekly rate is £124.88 and the equivalent daily rate is £17.84.  The qualifying lower earnings limit is increasing from £95 to £97 per [...]

Section 34 of the Employment Relations Act 1999 and Article 33 of the Employment Relations (Northern Ireland) Order 1999 provide for an increase or decrease in the following statutory limits from 1 February each year according to the year-on-year change in the retail price index (RPI) at the previous September. The reductions shown for 1 [...]

HMRC has updated the technical guidance provided for its own officers and it is available publicly on HMRC’s website for the assistance of employers and advisers.  Three specific items of interest are described below and the full list of changes may be viewed at www.hmrc.gov.uk/manuals/eimanual/updates/eimupdate101209.htm. Living accommodation exemption Section 99(1) of ITEPA provides exemption from [...]

The statutory Order that was made on 11 February 2009 entered into force on 18 December 2009.  The new convention replaces that signed in 1968.  It has effect for income tax purposes from 6 April 2010 in the UK and from 1 January 2010 in France. Further information: The Double Taxation Relief and International Tax [...]

In September 2009, the Prime Minister, Gordon Brown, announced plans to extend free childcare place, funded by removing the tax relief on the provision by employers of childcare vouchers.  Details were promised in the 2009 Pre-Budget Report. However, a few days before the 2009 Pre-Budget Report, in a letter sent to two MPs on 4 [...]

On 14 December 2009, the Student Loans Company (SLC) introduced a new initiative to limit the occurrences of over-repayments of loans through the payroll.  The problem arises frequently where regular deductions are made throughout a tax year and it is only when the year-end P14 is submitted that it is discovered that more has been [...]

In an article in the December 2009 issue of Notes for Payroll Software Developers, HMRC announced that, when employers register to use the PAYE Online for Employers service, they will automatically be given online access to their PAYE notices and reminders, such as tax code notices and student loan notices. If they wish to receive such [...]

A new “additional” higher tax rate of 50% is introduced for the 2010/11 tax year and applies to all taxable income, including savings income, above the £150,000 higher rate limit.  The Finance Act 2009 made no reference to this change; it should be expected to be included in the Finance Bill for 2010. To administer [...]

Section 244 of the Income Tax (Earnings and Pensions) Act 2003 provides exemption from income tax on the provision of a cycle or cyclist’s safety equipment, irrespective of how it is provided, as long as the specified conditions are met.  The exemption, which also applies to National Insurance contributions, has prompted the creation of “cycle-to-work” [...]

Section 243 of the Income Tax (Earnings and Pensions) Act 2003 provides exemption from income tax on the provision of financial or other support for a public transport road service.  The exemption, which also applies to National Insurance contributions, allows an employer to pay subsidies to a bus company in order to obtain free or [...]

To advise employers of the implications of the new penalty rules for late payments, HMRC has published basic guidance notes and provided a series of “frequently asked questions”. Although it is obvious how HMRC will be able to identify late payments, the guidance notes and FAQs do no make clear how payments that are not [...]

The Treasury & Resources department has published an updated version of the Employers Guide to the Employees Tax Instalment Scheme.  With the taxation of all benefits in kind through the ETI Scheme, it is no longer necessary, from 2010, for benefit in kind returns to be submitted. Further information: Employers Guide (Dec. 2009) Sponsored by [...]

The Agreement ratified on 16 June 2009 entered into force on 21 December 2009.    It has effect for income tax purposes from 1 January 2010 in both countries. Further information: Double taxation agreement with Estonia comes into force Agreement between the Isle of Man and the Republic of Estonia for the avoidance of double taxation [...]

This week’s newsletter is limited to matters raised by the Chancellor’s Pre-Budget Report on 9 December and in other documents published at the same time.  Predictably, the Chancellor had little to say on PAYE tax and NICs matters.  There were, however, many unexpected changes announced in areas such as pensions, car and van benefits, canteens, [...]

Summary There are no changes to the 20% and 40% tax rates.  As previously announced, earnings above the £150,000 “higher rate limit” are taxable at the new 50% “additional” rate of tax. There is no change to the £37,400 basic rate limit.  The 20% tax rate applies on taxable earnings up to £37,400.  The 40% [...]

Summary There are no changes to NICs rates from April 2010. The only change to NICs thresholds is an increase in the lower earnings limit (LEL) from £95 to £97 per week, £412 to £421 per month. All NICs rates will increase by 1% from April 2011, not by ½% as announced in the 2008 [...]

Summary A new one-off tax, known as the “bank payroll tax” takes immediate effect (i.e. from 9 December 2009).  It will be paid by banking groups, investment companies and building societies on payments, i.e. discretionary and contractual bonuses, made to banking employees over and above their salaries and benefits.  The tax is not paid by [...]

Summary From 2011/12, a “high income excess relief charge” will be imposed on “high income” individuals, i.e. those with annual gross income (including employer pension contributions) of £150,000 or more and who, in addition, have gross income (excluding employer pension contributions) of not less than £130,000.  The effect of the charge will be to restrict [...]

Section 317 of the Income Tax (Earnings and Pensions) Act 2003 (ITEPA) provides an exemption from tax under the employment income rules whereby an employer can provide the benefit of free or subsidised meals in a canteen or on its business premises, subject to certain conditions. The 2009 Pre-Budget Report announced that, with effect from [...]