Ceridian Customer Conference22 September 2010

HMRC Update

Richard McGuire

Business Education & Support Team

Agenda

• Budgets 2010

• Changes from 6 April 2010

• NPS – An update

• CD-ROM

• Looking ahead

2010 : The year of two Budgets

2010’s Budgets: Communications

• We did not issue an updated CD-ROM following either Budget

• You were sent issue 35 of Employer Bulletin following the March Budget – the last paper copy we will issue

• e-mail alerts

Budget 2010: Announcements affecting employers

Company cars and vans

• For years from 6 April 2010 to 5 April 2015:

– Full relief for cars and vans which cannot produce CO2 emissions when driven

– Reduced charge for cars which have approved CO2 emissions of exactly 75g/km or less

Budget 2010: Announcements affecting employers

Company car tax from 6 April 2012:

• Introduction of new CO2 g/km emissions limits

• Company car tax bands extended down to new 10% band

• All emission thresholds moved down by 5g/km

Budget 2010: Announcements affecting employers

Income Tax from 6 April 2011:

• Personal Allowance to be increased by £1,000 to £7,475

• Basic rate limit - currently £ £37,400 – to be reduced; figure to be announced following publication of the Retail Prices Index for September 2010

Budget 2010: Announcements affecting employers

National Insurance Contributions from 6 April 2011:

• Employees will pay 12% on earnings between the primary threshold and the Upper Earnings Limit; and 2% on earnings above the UEL

• Employers will pay 13.8% on all earnings above the secondary threshold

• The secondary threshold will rise by £21 a week above indexation

Changes from 6 April 2010

Penalties for late payment

In this context, PAYE includes:

• Tax

• National Insurance Contributions

• Construction Industry Scheme deductions

• Student Loan deductions

Penalties for late payment of PAYE

The new penalties:

• apply to any employer or contractor who does not pay on time and in full

• replace the Mandatory Electronic Payment surcharge currently applied only to ‘large’ employers

• apply to payments due on or after 19/22 May 2010…but will be assessed after the end of the tax year

More information at:

www.hmrc.gov.uk/paye/problems-inspections/late-payments.htm

Penalties for late payment of PAYE: When we will charge penalties

• Do not expect a letter each time you pay late

• We will review employers’ and contractors’ payment records after the end of the 2010-2011 tax year; and

• Issue first penalties from April 2011

Penalties for late payment of PAYE: How to avoid them

Pay on time!

• don’t leave payment to the last minute

• check on what day the 19th or 22nd falls

• consider changing your payment method

• sign-up for e-mail alerts

– visit www.businesslink.gov.uk and search ‘key filing dates’

Penalties for late payment of PAYE

If you face difficulties paying:

• Let us know as quickly as possible – but before the payment is due

• Contact the Business Payment Support Service on 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

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 is writing 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, employer-only NICs are due only in relation to employees working beyond their SPa

Equalisation of State Pension age (SPa)

For further information, go to:

Employers

• www.hmrc.gov.uk/guidance.cwg2.pdf

• www.hmrc.gov.uk/paye/employees/changes/pension-age.htm

Employees• http://pensions.direct.gov.uk/en/state-pension-age-calculator/home.asp

NPS – An update

National Insurance and PAYE Service (NPS)

• In June 2009, NPS replaced the 25 year old PAYE IT system (COP)

• Customer-centric so easier for HMRC as well as customers

• Delivers a faster, more efficient and accurate service

• In the majority of cases, queries can be answered at first point of contact, saving time and resources

• Greater accuracy in our records as we update them with information from our customers

• Reduces the burden on employers…

• …but the transition from COP to NPS has highlighted some issues

National Insurance and PAYE Service (NPS)

Issues:

• Annual Coding

• Importance of quality of data

• End of Year Reconciliation

Notifying changes in personal information

• It is vital that HMRC has correct personal information

• National Insurance Number

• Date of Birth

• Full name

• Address

• Daytime telephone number

• Employees and pensioners can now e-mail HMRC to tell us of changes to the final three

• Go to www.hmrc.gov.uk/individuals/change-of-circs.htm

• This will reduce the number of MS120 forms we send you

CD-ROM

CD-ROM

• Download the September update from:

www.hmrc.gov.uk/employers/cdrom/index.htm

• Don’t forget to register for e-mail alerts at:

www.hmrc.gov.uk/paye/forms-publications/register.htm

CD-ROM 2010: Help and guidance

Go to

www.hmrc.gov.uk/employers/cdrom/index.htm

for updates and Frequently Asked Questions

Watch this space for future developments…

Looking ahead

National Minimum Wage: Changes from 1 October 2010

• The main rate of NMW will be payable to workers aged 21 and over

• Revised rates come into force for all age bands

• There will be a new NMW rate for apprentices

NMW rates from 1 October 2010

NMW rate Rate from October

Workers aged 21 and above £5.93

Workers aged 18-20 years £4.92

Workers under 18 years and over compulsory school age

£3.64

Apprentices £2.50

Accommodation offset rate (weekly maximum)

£32.27

Accommodation offset rate (daily) £4.61

Electronic P60s

• Employers to have the option to provide P60 information in paper or electronic format

• The change comes into effect for the tax year 2010-11 onwards, meaning that the first P60 that can be provided electronically will be that for the year ending 5 April 2011

• The information recorded on form P60 is not changing

• HMRC publication RD1 (Substitute forms P60) will be updated

Additional Statutory Paternity Pay and Leave

Will apply to:

• Parents of babies due to be born on or after 3 April 2011; and

• Partners of children matched for adoption on or after the same date

Additional Statutory Paternity Pay and LeaveFrom August 2010:

• Technical specifications for Payroll software available

From October 2010:• Guidance for employers and workers at

• www.hmrc.gov.uk

• www.businesslink.gov.uk

• www.direct.gov.uk

From April 2011:• Updated Helpbook E19 and ASPP calculator available at:

• www.hmrc.gov.uk

Shaping the future?

‘Improving the operation of Pay As You Earn (PAYE)’

• Discussion document issued 27 July 2010

• Comments to be sent by 23 September 2010

• Access via www.hmrc.gov.uk/consultations/index.htm

• Discusses:

• Real Time Information; and

• Centralised Deductions

Any questions?