26.04.2010

New tax penalties, HMRC bank details, national minimum wage and fit notes.

Click on the links below to read each alert.

More New Tax Penalties
New bank details 
Student Loan repayments 
Changes to the National Minimum Wage
Introducing Fit Notes 

More New Tax Penalties
The “late notification” penalty applies to anyone who has an obligation in law to notify HMRC about a liability to a tax and who fails to do so by the relevant date. This penalty can apply to those who are late registering their business for VAT, or individuals who have taxable income and fail to notify HMRC so that a tax return can be issued in timely fashion. The penalty can be reduced when the failure is put right by the taxpayer coming forward voluntarily to correct the position, and can be reduced to nil if this is done without prompting and quite soon after the failure occurred.

Changes have been made to the legislation for late payment of PAYE/NIC.  At the end of the next tax year HMRC will review employers' payment records and where applicable they will apply penalties. Contact the HMRC if you cannot pay your PAYE as these penalties can be avoided; they will only apply to payments not made by the agreed date.

Details of penalties can be seen below. In a twelve month period the level of penalty increases as the number of late payments increase.

No of late payments	Penalty
1	no penalty
2-4	1% of outstanding tax
5-7	2% of outstanding tax
8-10	3% of outstanding tax
11+	4% of outstanding tax

Additional penalties of 5% will be charged on any tax outstanding at 6 and 12 months.

New HMRC bank details -
Cumbernauld  Sort Code 08-32-10, Account 12001039
Shipley           Sort Code 08-32-10, Account 12001020

Student Loans repayment
To try and stop overpayments being made via PAYE, Student Loans can be repaid by Direct Debit within the last 23 months of repayment.   The Student Loan Company take repayment figures from forms P14 at year end.

Changes to National Minimum Wage 01 October 2010
The Government has confirmed that from October 2010 there will be a 2% increase in the National Minimum Wage (NMW), as recommended by the Low Pay Commission (LPC). The LPC estimate that this increase will benefit 950,000 workers. 

Additionally, for the first time, a new apprentice rate is being introduced – although this rate does not apply to all apprentices. The following are exempt from the NMW;
• Non-employed apprentices 
• Those under age 19 or over 19 in their first 12 months of apprenticeship 
These apprentices will work and train at the £2.50 rate.

The adult rate applies from age 21. The change to the minimum age for the adult rate means that the minimum rate for workers who are age 21 in October 2010 will increase from £4.83 to £5.93 per hour. 

See below for a breakdown of all these new rates;
• apprentice rate - £2.50 per hour
• 16-17 year-olds – up from £3.57 to £3.64 per hour
• 18 to 20 year-olds – up from £4.83 to £4.92 per hour
• 21 year-olds and over – up from £5.80 to £5.93 per hour.

The government has also accepted the following LPC recommendations;

For apprentices in England transitional arrangements are made for current apprentices to retain a contractual entitlement to a minimum of £95 a week for the remainder of their apprenticeship or until they would become eligible for the NMW.   
 
Guidance on the NMW for the entertainment sector should be provided, and whether contract and agency cleaners in the hotel sector are receiving entitlement under the NMW should be investigated by HMRC.

New “Fit Notes”
Doctors are to be encouraged to state whether an employee who might previously have been signed off as sick might be fit for work if the employer makes suitable modifications to working arrangements. The Government believes that employees should be encouraged to return to work as soon as possible, and that employers should be encouraged to make suitable arrangements so that employees come back into the workplace as soon as possible. Hence the new certificates which will state either that the employee is unfit for work or make suggestions and recommendations about how the employee might return to work. They come into use on 6 April 2010.
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