Archive for September, 2011

HMRC responds to severe criticism by First-tier Tax Tribunals over the policy of waiting until September to penalise employers who did not file their P35s by the May deadline. The following is an extract from the latest weekly informal update (dated 23 September) from HMRC to employer representatives. The 2010-11 Employer Annual Returns (P35 and P14s) were [...]

The decision of the Court of Justice of the European Union in the context of calculating the holiday pay of airline pilots calls into question the “week’s pay” rules. On 15 September 2011, the Court of Justice of the European Union (CJEU) issued its ruling in the case Williams and others v British Airways plc. [...]

The Scottish Agricultural Board has fixed new minimum pay rates from 1 October 2011 The Scottish Agricultural Wages Board has confirmed the new minimum wage rates for agricultural workers from Saturday, 1 October 2011: £6.11 (an increase of 15p per hour) for those in the first 26 weeks of employment £6.67 (an increase of 16p [...]

The new National Minimum Wage (NMW) rates take effect from 1 October – or do they?  The UK legislation actually requires the new rates to be paid for the first “pay reference period” that starts on or after 1 October.  So, for example, with 1 October this year falling on a Saturday, if a weekly-paid [...]

Persons engaged on work experience placements are entitled to the national minimum wage unless the employer can demonstrate that they are volunteers or a specific exemption applies. The Business Link website section on the National Minimum Wage (NMW) has been updated to include specific guidance about “work experience” placements and internships. Businesses that offer work [...]

New regulations allow certain fees to former members of the armed forces and their family members to be exempt from tax. Section 394 of the Income Tax (Earnings and Pensions) Act 2003 imposes a tax charge on the provision of relevant benefits from an employer-financed retirement benefits scheme (EFRBS).  For example, if a retired employee continues to [...]

Employer procedures on receiving inappropriate SL1 start notices. The following is an extract from the latest weekly informal update (dated 16 September) from HMRC to employer representatives. HMRC is starting a programme of work to align employer and employment information held on our systems.  Specifically within the Collection of Student Loans environment: Those employers who have employees [...]

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 Do regular payments towards housing costs have to continue to be paid during maternity leave? If an employer makes a taxable and Ni-able payment towards housing costs to his [...]

We have just a few brief news items for you this week, the most important of which, perhaps, is a reissue of the guidance document on the changes to the deduction from earnings orders (DEOs) that are being introduced from next year.  If you are making a number of such deductions, you may wish to [...]

Minimum rate for Grade 1 workers increases to match the national minimum wage rate. Minimum wage rates for agricultural workers inNorthern Irelandare set by the Agricultural Wages Board forNorthern Irelandand are reviewed annually in April.  From 4 April 2011, the Grade 1 rate, which applies to workers in their first 40 weeks of employment, was [...]

The Government has decided not to proceed with proposals to counter continuing exploitation of the provisions of DTAs. In August 2011, HMRC published a technical note and draft regulations that set out a proposed approach to combating tax avoidance arrangements which exploit the provisions of double taxation agreements (DTAs).  Comments were sought by a deadline [...]

New versions of specifications for payroll software developers published by CMEC. An earlier newsletter  described the changes that are being made by the Child Maintenance and Enforcement Commission (CMEC) to the calculation of Deduction from Earnings Orders (DEOs) and the related reports from the 2012/13 tax year.  In response to a number of queries on [...]

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 An employee has been overpaid and recovery is being made during weeks that count towards her average weekly earnings (AWE) for SMP purposes? Should we calculate her AWE from [...]

This newsletter is being written eight time zones away from GMT in a very hot place with excellent Internet access, so guess away!  No, it isn’t Hungary.  In this country employer-supported childcare is minimal, contracting-out is an incomprehensible concept, and rest periods are generally not regulated.  In fact, most employees here enjoy just one week’s paid holiday [...]

HMRC gives further information on the impact of abolition from April 2012. From April 2012, all contracted-out “defined contribution” (DC) pension schemes will revert to “not contracted-out” schemes and, depending on their earnings levels, employees in such schemes will start to accrue pension benefits under the State Second Pension scheme. Schemes that are “defined contribution” [...]

The UK and Hungary have signed a replacement double taxation agreement. A new comprehensive Double Taxation Convention between the United Kingdom and the Republic of Hungary was signed in Budapest on 7 September 2011, replacing the earlier 1977 agreement. The Convention enters into force once both countries have completed their legislative procedures. Further information: UK/HungaryDouble [...]

HMRC’s Employment Income Manual has been updated to cover recent statutory changes to the provision of employer-supported childcare. HMRC provides guidance for its own staff on all “employment income” matters in the Employment Income Manual.  It is a technical manual and comments on the tax legislation itself.  It is published online and is available for [...]

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? My employer includes holiday pay in my self-employed rate of pay, so I do not receive holiday pay when I take holiday.  Is this the correct legal position I am a [...]

We are now in late summer, approaching autumn, when a manager’s thoughts turn to winter and the problems it brings. So start thinking now about actions that you could usefully take to minimise or eliminate some of those problems. Does the boiler need a service, does the heating system work? Give it a run for [...]

Making discipline decisions should be easy. You follow your procedure and then know whether or not the employee should be given a penalty. But what if that is not the case? What if you finish up feeling unsure? A record of poor performance or unacceptable attendance level is one thing, but what if the employee [...]