National Minimum Wage NMW (October 2009)
Starting on 1st October 2009 the National Minimum Wage rates have increased. It is vital that you ensure your employees are paid at least these minimum rates as it is a criminal offence to pay less. We will try to spot when you are underpaying your staff but the onus is on you to be certain that you are operating within the rules.
(1) NATIONAL MINIMUM WAGE RATES:
MAIN RATE - WORKERS AGED 22 AND OVER £5.80
DEVELOPMENT RATE - WORKERS AGED 18 - 21 £4.83
DEVELOPMENT RATE - WORKERS AGED 16 - 17 £3.57
(2) ACCOMMODATION OFFSET RATE:
DAILY RATE £4.51
WEEKLY MAXIMUM £31.57
National Minimum Wage NMW (October 2008)
Starting on 1st October 2008 the National Minimum Wage rates have increased. It is vital that you ensure your employees are paid at least these minimum rates as it is a criminal offence to pay less. We will try to spot when you are underpaying your staff but the onus is on you to be certain that you are operating within the rules.
(1) NATIONAL MINIMUM WAGE RATES:
MAIN RATE - WORKERS AGED 22 AND OVER £5.73
DEVELOPMENT RATE - WORKERS AGED 18 - 21 £4.77
DEVELOPMENT RATE - WORKERS AGED 16 - 17 £3.53
(2) ACCOMMODATION OFFSET RATE:
DAILY RATE £4.46
WEEKLY MAXIMUM £31.22
CIS Penalty Charges (August 2008)
The government began charging for late CIS submissions on 19th October 2007. Recent figures suggest that these penalties have become a good source of income for the treasury. Remember that over 10% of UK businesses were affected by the change.
Figures show that the number of penalty notices issued for late CIS monthly returns was 118,458 between 1st October and 31st December 2007. This has yielded at least £11.8 million because the smallest penalty is £100. Assuming that this quarter is representative of a normal three month period, this equates to over £47 million per annum.
More worrying is the fact that HMRC reviews the gross status for tax treatment every month using the Tax Treatment Qualification Test (TTQT). If returns or payments for CIS, self assessment or payroll are late then there is a very real risk of losing gross payment status.
Changes to the Construction Industry Scheme (October 2007)
HMRC has warned of heavy automatic penalties of £100 for every monthly return that has not been submitted either by paper or online by the due date of the 19th of each month. This includes any returns due for earlier periods that remain unsubmitted. It is also vital to ensure that zero returns are submitted when no payments have been made because penalties still apply. There is more detailed information available on the HMRC website
HMRC is also looking each year at subcontractors who are entitled to receive gross payments from contractors. If a subcontractor is also a contractor and their PAYE and CIS taxes are not up to date then they will lose the right to receive gross payment.
P46 and P45 forms are about to be quality checked (October 2007)
There are changes coming into effect from April 2008 that mean it will no longer be possible to set employees up on PAYE with missing details.
For many years we have attempted to ensure the quality of all documentation submitted to HMRC but have often failed because a client has not insisted that new employees complete P45 and P46 forms. HMRC will apply these checks strictly and will return all failed documents for correction.
Our advice continues to be compatible with the new requirements. We strongly recommend that all employees are encouraged to complete form P46 as part of their induction programme. In this way all of their important data can be collected and we will be able to ensure that your staff are being dealt with and paid correctly within the regulations.
We will continue to use a Basic Rate tax code at 22% tax for all employees without a properly completed P46 and/or P45.
Find all of these important forms here in PDF format. Simply print off as many as you need and send them to us, via post, fax, or email, for the first payroll run.
Statutory Holiday Entitlement increased to 24 days (October 2007)
From the start of October 2007 the minimum holiday entitlement will increase from 20 days a year to 24 days (pro-rata for part-time staff). This will increase to 28 days from October 2008.
There has been some confusion as to whether bank holidays are additional to or included in the total. For the record there is no statutory right for employees to be paid for bank holidays, although it is usual for companies to pay them either as part of the old 20 day entitlement or as an addition over and above the statutory entitlement. It follows that all employers paying 20 days plus bank holidays will already be complying with the legislation. Those that pay 20 days including bank holidays will need to increase entitlements by 4 days this year and another 4 days in October 2008.
National Minimum Wage NMW (October 2007)
Starting on 1st October 2007 the National Minimum Wage rates have increased. It is vital that you ensure your employees are paid at least these minimum rates as it is a criminal offence to pay less. We will try to spot when you are underpaying your staff but the onus is on you to be certain that you are operating within the rules.
(1) NATIONAL MINIMUM WAGE RATES:
MAIN RATE - WORKERS AGED 22 AND OVER £5.52
DEVELOPMENT RATE - WORKERS AGED 18 - 21 £4.60
DEVELOPMENT RATE - WORKERS AGED 16 - 17 £3.40
2) ACCOMMODATION OFFSET RATE:
DAILY RATE £4.30
WEEKLY MAXIMUM £30.10
National Minimum Wage (NMW)
The NMW is set to increase to the following rates from 1st October 2006:
Main Rate:
For workers 22 years of age and over the NMW is £5.35 per hour.
Development Rate:
For workers between the ages of 18 and 21 the NMW is £4.45 per hour.
This rate can also be paid to workers of 22 years of age and over who start a new job and commence UK Government approved accredited training in order to obtain a vocational qualification. You may pay the developmental rate for six months under these circumstances but must then switch to the main rate of £5.35 per hour.
Young Workers Rate:
For workers above compulsory school leaving age and under 18 years of age the NMW is £3.30 per hour.
For further information you can visit the interactive website of the Department of Trade and industry at www.dti.gov.uk
Paytec-Online will highlight any workers who are being paid below these statutory rates.
Statutory Sick Pay (SSP)
With effect from 1st October 2006 the UK Government has lifted the long-standing age restrictions on SSP meaning that employees above 65 and below 16 years of age can now qualify for SSP as long as all other qualifying conditions are met. This move helps to protect the statutory rights of employees who have traditionally been at a disadvantage and discriminated against simply because of their age.
Paytec-Online will be operating SSP under these new rules automatically.
HMRC underpayment letters cause concern
Many Paytec-online customers would have been thrown into a panic earlier this month thanks to a letter from HMRC claiming that they have underpaid their tax and National insurance.
Companies with fewer that 50 employees that filed their 2004-2005 end of year returns online qualified for an incentive payment of £250. This was correctly deducted by Paytec-online from payments to HMRC during the 2005-2006 tax year. Unfortunately, a computer error at the Revenue put the incentive into the wrong tax year and resulted in underpayment notices being sent to business owners. To add insult to injury, interest was charged on top.
Understandably, this has caused major concern but thankfully we have now requested, on behalf of all of our customers, that the incentive be offset against the correct tax year.
Should you have any further problems regarding underpayment notices then please contact us here
New Construction Industry Scheme CIS
We are ready for the new CIS when it is launched in April 2007. You will be pleased to hear that HMRC has dropped the cards and vouchers in favour of a verification based scheme.
Thankfully not all subcontractors need to go through the verification process. HMRC will be sending you two lists of all your existing subcontractors. Any subcontractor appearing on your lists does not need to be verified again. It is crucial that the lists are kept safely filed for future reference
Contacting HMRC:
CIS verification for new subcontractors can be requested by phoning HMRC on 0845 366 7899 or online at www.hmrc.gov.uk/new-cis.
When contacting HMRC you must provide: your name; your ten digit unique tax reference (UTR); and your accounts office reference (look for it on your yellow payslip booklet). Then you need to give the details of your new subcontractor. The details vary according to the subcontractors trading style. For sole traders you must provide: name; UTR; and NI number. For partnerships you must provide as for a sole trader plus partner's: name; UTR; and NI number. For a subcontractor that is a limited company you must provide: company name; company UTR; and company registration number.
There are three possible outcomes from the verification process: Gross - you pay the subcontractor without deduction; Net - you pay the subcontractor after deduction of tax at 20% (2007/8); or Unmatched - you pay the subcontractor after deduction of tax at a higher rate of 30%.
Statutory requirements:
From April 2007 each subcontractor must be given a statement each tax month declaring how much tax has been deducted from their pay. It is also a statutory requirement to submit a monthly return to HMRC using form CIS300
Our Services:
Paytec Online can help you and save you time and worry by producing monthly statements for subcontractors and completing and submitting monthly returns to HMRC. We can also help you decide about a workers status and tell you whether the worker is employed or self-employed. You can read about this online at www.hmrc.gov.uk/employment-status. We will be providing these services at very reasonable prices.
If you would like to find out more about the new CIS or our services then please contact Kelly Palframan on 0845 052 9456 for further details
