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.

1. Softworld HR and Payroll Solutions
October 2009
HMRC Update
Phil Nilson
HMRC Business Customer Unit

2. Agenda
• Things you need to know today
• Looking ahead to April 2010…
• …and beyond to April 2011

3. Things you need to know today

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. The PAYE Service
Benefits:
• A faster, more efficient process
• Greater accuracy
• Less unnecessary customer contact
• Better use of resources
• Better customer service

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. 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. 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. 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. Employer CD-ROM

11. Looking ahead to April 2010

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. 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. 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. 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. 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. Late payment penalties – The proposals
– Announced at Budget 2009
– Implementation intended to begin in 2010

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. 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. 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. 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. 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. 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. 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. …and beyond to April 2011

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. 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. 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. Any questions?

30. Further help after today
www.hmrc.gov.uk
Employer CD-ROM
Employer Helpline 0845 7 143 143
phil.nilson@hmrc.gsi.gov.uk