Archive for November, 2010

Each week we receive a number of payroll questions on our forum, and here are this week’s batch. Can you help with any answers? Forum Posts: Does the tax exemption for free and subsidised meals apply when provided by salary sacrifice schemes or canteen cards? In a flexible benefits scheme, what is the tax situation [...]

I do hope you’re not getting bored with these items about tax code 0T but, no sooner had we written to HMRC objecting to the P46 proposals than two new, equally puzzling uses for the code are announced, with inadequate explanation, errors and significant repercussions for payroll systems developers.  So, as you will see from [...]

There is nothing specifically to report yet on the issues we have raised about the proposed use of tax code 0T in the P46 box C situation.  However, HMRC has now announced two further uses for the code from April 2011, both of which are equally inappropriate. The announcement was made first in HMRC’s weekly [...]

Among the announcements by the Chancellor in the Spending Review on 20 October was the decision to bring forward the schedule for increasing the State Pension age for women to 65 and for both men and women to 66. The changes in the timetable from April 2016 onwards have been published on the Directgov website [...]

The UK Border Agency, on 2 November 2010, published an updated version of its detailed guidance for employers on preventing illegal working. Since January 1997, employers have been required by law to check that all new employees are entitled to work in the UK.  If such checks are carried out and documented, employers are provided [...]

Section 5 of the Pensions Act 2007 requires the Government to start reviewing the basic State Pension and other state pension benefits in line with earnings from the start of a tax year that must be designated before 1 April 2011.  By means of a statutory Order, the Government has formally announced that the designated [...]

Since February 2008, employers wishing to use scale rates to administer travel expenses have been required to set the rates by means of a sampling exercise.   The sampling method is inappropriate in many cases for determining scale rates for employees who travel outside the UK as most employers do not have enough such employees to [...]

HMRC’s annual Employer CD-ROM is to be replaced from 2011 with set of Basic PAYE Tools that will have to be downloaded from HMRC’s website.  Employers who use the P11 Calculator and the database facilities provided on the CD-ROM must ensure that their installation is updated ready for the new 2011/12 facilities.  HMRC released an [...]

HM Treasury has announced that the Chancellor will present his next Budget on Wednesday, 23 March 2011. Further information: 2011 Budget

Ireland signed an Agreement on Social Security with Japan on 5 November and it comes into force on 1 December 2010.  Its main purpose is to protect the pension rights of migrant workers who move between Ireland and Japan. It is estimated that there are about 2,000 Japanese people in Ireland and approximately 1,500 Irish people [...]

The calculation of primary and secondary Class 1 NICs for company directors is the same as for employees in general, except that an annual earnings period is used.  The effect on the director of applying an annual earnings period is that no primary NICs are due until the director’s earnings in the year to date [...]

Each week we receive a number of payroll questions on our forum, and here are this week’s batch. Can you help with any answers? Forum Posts Contacting HMRC As an employer at some point you will need to contact HMRC to discuss PAYE. These days most contact is telephone driven and the first thing you [...]

Another full newsletter, with about of third of it taken up with updated guidance on how employers will administer, from the start of the 2011/12 tax year, the tax relief restrictions on employer-supported childcare.  The procedures, which are still not finalised, are cumbersome and ill-conceived, introducing in effect an additional manual PAYE system. HMRC has [...]

In last week’s newsletter we discussed HMRC’s intention to introduce, from April 2011, 0T as the tax code to apply instead of BR when box C of the P46 is checked.  We also provided the text of a letter that we have sent to HMRC questioning whether this change achieves the objective of correctly taxing [...]

In a decision given on 19 October 2010 in the case TL Russell & Ors v Transocean International Resources Ltd & Ors, the Inner House of the Scottish Court of Session ruled that, in the case of offshore workers who, in a year, work 26 weeks offshore and have 26 weeks onshore, the time onshore [...]

In a decision given on 14 October 2010 in the case Samson Publishing Ltd & Ors v Revenue & Customs, the First Tier Tax Tribunal ruled that cars made available for the use of employees must be taxed as company cars and not as assets made available, even if they are partly owned by the [...]

The Department for Business, Innovation and Skills (BIS) has published two new booklets, one for employers, the other for employees, which explain the new maternity and paternity rights that apply in the case of babies due on or after Sunday, 3 April 2011. Further information: Pregnancy and work: what you need to know as an [...]

HMRC’s weekly informal email to employer representatives dated 15 October provides more detail about the conduct and progress of the P800 Tax Calculation exercise. Employers and representative bodies have asked us for more information about timelines and volumes so that you can manage the expectations of your employees and clients. NPS will attempt to reconcile [...]

On 27 October, the Department for Work and Pensions (DWP) published the detailed results of an independent review of the procedures needed to ensure that automatic enrolment into the new pension personal accounts from October 2012 will work and be effective. Automatic enrolment will be introduced in monthly stages between 2012 and 2016, with the [...]

The European Commission has requested the UK to end discriminatory conditions on the right to reside as a worker which exclude from certain social benefits nationals from eight of the ten Member States (Czech Republic, Hungary, Slovakia, Slovenia, Latvia, Lithuania, Estonia, Poland) that joined the EU in 2004. The Commission considers the discriminatory rules to [...]