HMRC Update

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Phil Nilson, Employer Team, Business Customer Unit, HMRC

A topical update on payroll matters from HMRC’s perspective covering what you need to know now, as well as in the medium and long-term.

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HMRC Update

  1. 1. Softworld HR and Payroll Solutions October 2009 HMRC Update Phil Nilson HMRC Business Customer Unit
  2. 2. Agenda • Things you need to know today • Looking ahead to April 2010… • …and beyond to April 2011
  3. 3. Things you need to know today
  4. 4. The PAYE Service • Major upgrades to our IT systems were completed on time • For the first time, we can see a customer’s PAYE tax, employment and National Insurance information in one place… • …which means we are able to deal with the majority of enquiries at the first point of contact, wherever in the UK the customer lives • The new service has been made available to 28,610 HMRC staff
  5. 5. The PAYE Service Benefits: • A faster, more efficient process • Greater accuracy • Less unnecessary customer contact • Better use of resources • Better customer service
  6. 6. PAYE Desktop Viewer (PDV) PDV lets you view, manage and sort tax codes and notices • Gives you a summary of the codes you have received • Lets you mark codes as ‘Actioned’ or ‘Unactioned’ • Lets you create lists based on specific search criteria • Lets you add a comment to a code or notice • Create a file to send to another PDV user • Go to www.hmrc.gov.uk/paye/tools/PDV
  7. 7. Customers with a gap in their National Insurance record for 2007-2008 • Letters issued between 31 August and 20 November • 3 million expected • We are writing to employers to schemes whose schemes were not processed by the end of August • Employers can ring: 0191 225 3033 • Number for employees: 0845 915 5996
  8. 8. National Minimum Wage Rate Current rate New rate (up to 30 September) (from 1 October) Main rate for workers aged £5.73 £5.80 22 and over Rate for workers aged £4.77 £4.83 18-21 Rate for workers aged £3.53 £3.57 16-17 and over compulsory school age
  9. 9. National Minimum Wage – Other issues From October 2009: • Tips, gratuities, cover charges and service charges no longer count towards NMW pay From October 2010: • Main rate extended to 21 year-olds For further help: • www.businesslink.gov.uk/nmw • the Pay and Work Rights Helpline 0800 917 2368
  10. 10. Employer CD-ROM
  11. 11. Looking ahead to April 2010
  12. 12. Employer Annual Returns • Employers with 50 or more employees already have to send their Employer Annual Return online • New Regulations laid on 13 August 2009 mean that employers with fewer than 50 employees will have to send their Employer Annual Return online from 2009-10 • That Return is due by 19 May 2010 • If you file your Return on paper you may be charged a penalty of up to £3000
  13. 13. Employer Annual Returns • A few employers will not have to file their Employer Annual Returns online from 6 April 2010. • Exceptions will include: domestic employers certain religious groups carer and support employers – that is people who employ someone to provide care for them at home
  14. 14. What employers need to do • You must first register and enrol with HMRC’s Online Services by going to our website at www.hmrc.gov.uk • We have teams around the country who can help with advice, presentations and registration surgeries • Go to www.hmrc.gov.uk/bst/advice-teams-area/map2.htm • Or your CD-ROM
  15. 15. Tax changes from April 2010 • Personal Allowances to be reduced by reference to an ‘income limit’ of £100,000 • Reduction will be £1 for every £2 above the income limit • Additional higher rate of 50% for income above £150,000
  16. 16. Tax rates from 6 April 2010 Taxable income Basic Rate 20% £0 – £37,400 Higher Rate 40% £37,401 – £150,000 Additional 50% Over £150,000 Rate
  17. 17. Late payment penalties – The proposals – Announced at Budget 2009 – Implementation intended to begin in 2010
  18. 18. Late payment penalties – The proposals The intention is that they: • will apply to all employers • replace the current ‘late payment surcharge’ applied to employers with 250 or more employees • are expected to apply to payments due from 19/22 May 2010 • are likely to be calculated and assessed after the end of the relevant tax year
  19. 19. Late payment penalties – The proposals The intention is that: • There will be no penalty if there is: • a reasonable excuse for the lateness; or • only one default in the year • Penalties will range between 1% and 4% depending on the number of defaults… • …but you may have to pay additional penalties of 5% if any payments are still unpaid after 6 and 12 months • All carry the right of appeal
  20. 20. Late payment penalties – How to avoid them • Make sure you pay on time! • Phone the Business Payment Support Service if you have worries about being able to pay • No further penalties for payments made under a time to pay agreement • penalties already charged can be included in the agreement
  21. 21. Business Payment Support Service • Introduced on 24 November 2008 • For employers worried about meeting payments of tax, NICs, VAT and other payments • Ring 0845 302 1435 • Have to hand: – Your tax reference number(s) – Details of the tax involved – Details of when you expect to be able to pay the liabilities
  22. 22. Equalisation of State Pension age (SPa) • From 6 April 2010 the age at which women reach SPa will gradually rise to become the same as it is for men – 65 • The change will be phased in between April 2010 and April 2020 • All women born between 6 April 1950 and 5 April 1955 are affected • All women born on or after 6 April 1955 will reach SPa at age 65
  23. 23. Equalisation of State Pension age (SPa) • DWP’s Pension Service will write to all women affected, advising them of their revised pension age • Women should notify their employers • NICs are due from women over age 60 up to their new SPa • Category C NICs are due only in relation to employees working beyond their SPa
  24. 24. Equalisation of State Pension age (SPa) For further information: • www.hmrc.gov.uk/guidance.cwg2.pdf • www.hmrc.gov.uk/paye/employees/changes/pension-age.htm
  25. 25. …and beyond to April 2011
  26. 26. National Insurance changes from April 2011 • Class 1 employee rate raised 0.5% to 11.5% • Class 1 employee additional rate raised 0.5% to 1.5% • Class 1 employer rate raised 0.5% to 13.3% • Similar increase to Class 1A and Class 1B rates
  27. 27. Additional Paternity Leave and Pay (APL&P) • Government announced in mid-September that APL&P will be introduced for fathers of babies due to be born, or matched for adoption, on or after 3 April 2011 • Draft regulations to be published on BIS’ website • Cases possible for 2010-2011… • …but no change to reporting requirements
  28. 28. Additional Paternity Leave and Pay (APL&P) Further information available at: • www.berr.gov.uk • http://www.hmrc.gov.uk/news/index.htm • http://www.hmrc.gov.uk/comp/notes12-2.pdf
  29. 29. Any questions?
  30. 30. Further help after today www.hmrc.gov.uk Employer CD-ROM Employer Helpline 0845 7 143 143 phil.nilson@hmrc.gsi.gov.uk

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