Softworld HR and Payroll SolutionsOctober 2009

HMRC Update

Phil Nilson

HMRC Business Customer Unit

Agenda

• Things you need to know today

• Looking ahead to April 2010…

• …and beyond to April 2011

Things you need to know today

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

The PAYE Service

Benefits:

• A faster, more efficient process

• Greater accuracy

• Less unnecessary customer contact

• Better use of resources

• Better customer service

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

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

National Minimum Wage

£3.57£3.53Rate for workers aged

16-17 and over compulsory

school age

£4.83£4.77Rate for workers aged

18-21

£5.80£5.73Main rate for workers aged

22 and over

New rate

(from 1 October)

Current rate

(up to 30 September)

Rate

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

Employer CD-ROM

Looking ahead to April 2010

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

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

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

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

Tax rates from 6 April 2010

Over £150,00050%Additional Rate

£37,401 –£150,00040%Higher Rate

£0 – £37,40020%Basic Rate

Taxable income

Late payment penalties – The proposals

– Announced at Budget 2009

– Implementation intended to begin in 2010

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

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

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

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

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

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

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

…and beyond to April 2011

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

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

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

Any questions?

Further help after today

www.hmrc.gov.uk

Employer CD-ROM

Employer Helpline 0845 7 143 143

phil.nilson@hmrc.gsi.gov.uk