Archive for June, 2010

We published our detailed coverage of the Coalition government’s 2010 Budget last Wednesday and we hope you found it useful. If you missed it, or would like to refresh your memory about any aspect of the announcements, you can still find the links at www.payroll-help.com. Two of this week’s news items are related in some [...]

If a pool car or van, otherwise called a “pooled” car or van by HMRC, meets the statutory conditions, it is not treated as a company vehicle. As a result, the drivers using the vehicle are not liable for the car or van benefit and fuel charges. Meeting the conditions is therefore critical. In the [...]

A first-time Double Taxation Agreement between the UK and the Hong Kong Special Administrative Region of the People’s Republic of China was signed in London on 21 June 2010. The Agreement enters into force once both countries have completed their legislative procedures. The provisions of the Agreement will then take effect from the next calendar [...]

Form P46(Car) is used to notify HMRC when a car becomes available to an employee, or ceases to be available, or the employee ceases to be a lower-paid employee and becomes liable for the car benefit charge. However, there is no way of informing HMRC when one car is replaced with another – that facility [...]

Chapter 1 of HMRC’s CWG2 Further Guide to PAYE and NICs provides instructions, under the heading “When to work out NICs and PAYE” on page 7, on how to handle marginal items of pay (such as expenses) for NICs purposes when notification that they have been paid is received by the payroll department too late [...]

The Seafarers’ Earnings Deduction (section 40 of the Income Tax (Earnings and Pensions) Act 2003) can provide 100% UK tax relief on earnings from carrying out duties as a seafarer wholly or partly outside the UK. One of the qualifying conditions for the deduction is that the claimant must be ordinarily resident in the UK. [...]

On 7 June 2010, member States of the European Union (EU) agreed to update the maternity leave directive to give standard maternity leave rights to self-employed women and the spouses or life partners of self-employed men.   It is common for self-employed workers in farming and small firms and for professional workers to be helped in their jobs by their spouses or partners.  [...]

Between 2010 and 2020, the State Pension age for women is already due to rise from 60 to 65, to match the State Pension age for men. From 2024, the State Pension age for both men and women will increase from 65 to 66 over a two-year period, with further increases to 67 over a [...]

In March 2010, the Low Pay Commission (LPC) published its eleventh National Minimum Wage Report. The recommendations for an increase of approximately 2% in the National Minimum Wage (NMW) rates from October 2010 were accepted by the Labour government at the time. Draft Regulations have been published which, in addition to increasing the rates to [...]

Recovering arrears of tax Following a successful pilot exercise in 2009/10, HMRC has announced that it will use Debt Collection Agencies during 2010/11 to provide it with additional capacity to pursue and collect tax debts. As part of HMRC’s debt strategy, all debts are risk assessed and in-house resources are focused first on the highest [...]

Anti-avoidance measures Various consultations and legislative measures are to be introduced to close down tax avoidance schemes. These include: “geared growth arrangements” for employment-related shares and securities arrangements using trusts and complex intermediary structures to avoid tax and NICs on earnings and restrictions on pensions tax relief schemes that involve profits arising to a company [...]

Enterprise Management Incentives Enterprise Management Incentives (EMI) is a share option scheme that provides tax and NICs advantages and is aimed at smaller, higher-risk companies to help them recruit and retain key employees. In order to qualify for EMI, a company has to meet various conditions with respect to its size, independence and trading activities. [...]

Basic State Pension The Government confirmed its commitment to review the basic State Pension each year by the highest of earnings, prices or 2½% from April 2011. The Consumer Price Index (CPI) will be used as the measure of prices, consistent with the Government’s decision to index all benefits and tax credits by the CPI. [...]

Rates and thresholds As indicated in the coalition government’s initial announcement in May 2010, the 1% increase to all NICs rates will go ahead from April 2011 as intended by the previous government. The Budget documents also state that the primary (employee) threshold, currently £110 per week, will be increased as “already planned” from April [...]

Allowances and thresholds From April 2011, the personal allowance for individuals under age 65 will increase by £1,000, from the current £6,475 to £7,475. The change is expected to take 880,000 people out of income tax altogether. This increase is a major step towards the coalition government’s longer term policy objective of increasing the personal [...]

The new Chancellor, George Osborne, presented his Emergency Budget on Tuesday, 22 June 2010.  This review covers all of the proposals that are relevant to payroll, many of which will be enacted in the Finance (No. 2) Act 2010. The new Budget proposals do not necessarily replace the changes announced in the previous government’s Budget [...]

A bank holiday may occur while an employee is away on maternity, paternity or adoption leave.  What action, if any, the employer takes with regard to payment for the bank holiday is a contractual matter. In the case of salaried staff, for example, where an employee’s salary is paid as normal when there are one [...]

While contemplating for a few hours what the Chancellor has in store for us in his Budget, why not give a little thought to how you might detect fake “fit notes” and what you would do if you found that an employee had presented one to justify absence and claim SSP? Sponsored by Learn Payroll

A recent IPP newsletter highlighted a recent BBC news item about a website, www.doctorsnotestore.com, that sells fake “fit notes” from £25 each, with a money-back guarantee if they fail you get the purchaser our of work or school. Selling sick notes is apparently not illegal, only using them fraudulently to obtain payment of SSP.  Employers [...]

In its recent newsletters, the Institute of Payroll Professionals (IPP) has provided details of changes to the bank account details to be used from payments by employers to the Centralised Attachment of Earnings Payment System (CAPS), operated by HM Courts Service (HMCS). The changes were added by HMCS to the website page that explains how [...]