JANUARY 2010 - INTRODUCTION

In this month’s enews we report on the latest HMRC disclosure opportunity and advise you to check any PAYE tax code you receive with care.

Please browse through the articles using the links below and contact us if any issues or questions arise.

The Tax Health Plan (THP)

HMRC new scam emails

Employment Rights - Statutory limits

Dispensations - new online application form

Tax codes being issued

Scrappage Scheme

Statutory payments

Using your own car for work

Tax payments

The Tax Health Plan (THP)

HMRC have obtained information from various sources, including NHS trusts, private hospitals and medical insurers and are introducing the THP as an opportunity for medical professionals with tax to pay to get their affairs up to date with the benefit of a fixed penalty.

Taxpayers must notify HMRC of the intention to make a disclosure by 31 March 2010 and must make a full disclosure of all undeclared liabilities and full payment of all outstanding taxes and duties, interest and penalties by 30 June 2010.

The penalty is fixed at 10% of the taxes/duties underpaid unless the total amount of unpaid liability being disclosed is less than £1,000, in which case there is no penalty.

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HMRC will pursue those with undeclared tax liabilities who decide not to make a disclosure.

The THP is initially open to members of the General Medical Council but is expected to be extended to other health professionals including dentists.

If you have any concerns in this area please do get in touch.

Internet link: HMRC guidance on THP

HMRC new scam emails

HMRC have issued a warning about a new scam email which is being sent from ‘HMRC Online Services – This e-mail address is being protected from spam bots, you need JavaScript enabled to view it ’ stating that the recipient has one new ALERT message and should log onto their Online Account to read the message.

The email includes a link to a fraudulent website which asks the taxpayer for their personal account information and password. HMRC are advising that the email is not from them and that anyone receiving a copy should forward it to them at This e-mail address is being protected from spam bots, you need JavaScript enabled to view it

Internet link:  HMRC scam email example

 Employment Rights - Statutory limits

The limit on the amount of the compensatory award for unfair dismissal is set to decrease from 1 February 2010. The current maximum of £66,200 is to reduce to £65,300, due to the decrease in the retail prices index measure of inflation. This new limit applies where the event giving rise to the entitlement to the payment arose on or after 1 February 2010.

The maximum amount of a week's pay for the purpose of calculating the basic or additional award of compensation for unfair dismissal or redundancy payment has not been amended from the current amount of £380. This rate has been in force since 1 October 2009.

The Business Link website includes a useful calculator of statutory redundancy entitlement.

Internet links: Business link calculator Statutory instrument 

Dispensations - new online application form

HMRC have introduced the facility to apply for dispensations online.

Where an employer has a dispensation they do not have to report expenses and certain benefits to HMRC on forms P9D or P11D at the end of the tax year. Where employers have a dispensation in place this can be time saving.

If you would like to discuss applying for a dispensation please do get in touch.

Internet link: HMRC guidance on dispensations

Tax codes being issued

HMRC are advising employees that between January and March 2010 they will be issuing new PAYE coding for 2010/11. The tax codes should reflect the individual’s personal circumstances and include the tax allowances and reliefs that individuals are entitled to.

HMRC are advising that this is the first time the annual coding process will take place using HMRC's new computer system for processing PAYE, known as the National Insurance and PAYE Service (NPS). HMRC are expecting more employees than usual, approximately 25 million, to receive coding notices because of the new system.

However, it appears that there may be a problem with the new coding notices, according to the Chartered Institute of Tax President Andrew Hubbard

 “Most people on PAYE are used to assuming that what the taxman sends them is correct. Many file away coding notices without even bothering to check them.”

“But this year, many of them are being given wrong information, and unless they spot it and tell HMRC, their employer will receive the wrong information too, and they could get a nasty shock when they open their April pay packet and see it is as much as a hundred pounds lighter than they are expecting.”

According to the CIOT website

‘Those affected are thought to include taxpayers who have left a job in the last few years. The HMRC database appears to have ‘lost’ the information it holds about people leaving jobs and as a result is combining taxpayers’ current employment records with old data and concluding that they have two (or more) jobs and much higher earnings than they do.

Anyone with two jobs normally has their personal allowance (the portion of your income you do not have to pay tax on) counted against the job with the highest wage. As a result of the error many people will, in effect, have their personal allowance split between two jobs or allocated to a job they no longer have, meaning their current employer will be obliged to deduct too much income tax. The personal allowance will be £6,475 for most people under 65 in 2010/11. If the whole of that personal allowance is wrongly applied that would cut a basic rate taxpayer’s pay packet by about £108 a month or £1,295 a year.’

If you receive a new tax code and are unsure whether or not it is correct please let us know so we can check it for you.

Internet links: HMRC guidance on tax codes Chartered Institute of Tax statement

 Scrappage Scheme

The Vehicle Scrappage Scheme is a voluntary scheme for motor dealers under which participating dealers give buyers a £2,000 discount off the purchase price of a new car (or certain types of small van) in exchange for scrapping their old qualifying vehicle.

Funded jointly by the government and manufacturers, the scheme has proved very popular. Although the scheme is set to run until February 2010, recent figures show that approximately 80% of the available budget for the scheme has already been utilised. As the scheme enters its final stages the Department for Business will allocate order quotas to manufacturers based on brand popularity and it is hoped it will help to ensure a smooth closing of the scheme.

Lord Mandelson, Business Secretary, said:

“I’m pleased to see that the scheme has been taken up by so many people, supporting our automotive manufacturers through a very difficult time. With limited orders as we near the close of scrappage there is a risk of disappointment for car buyers. I would urge people who are still keen on taking part to put their orders in as soon as possible as time is running out.”

For general information on the £2,000 scrappage discounts and other conditions visit the scrappage website link below. For HMRC’s views on the business tax and VAT implications of the car and van scrappage scheme use the HMRC link below.

If you have any queries on the tax implications of the scheme please do get in touch.

Internet links: BIS press release Scrappage website  HMRC Brief

Statutory payments

The new Statutory Payment Rates for 2010/11 have been announced. The new rates are as follows:

The current Statutory Sick Pay ( SSP) weekly rate of £79.15 is being retained for 2010/11.

The Statutory Maternity Pay ( SMP) standard rate will be £124.88 for payment weeks beginning on or after 4 April 2010.  The current rate is £123.06.

The same weekly rate applies to Statutory Paternity and Statutory Adoption Pay.

If you would like any help with any of these statutory payments please do get in touch.

Internet link: Business link statutory payment rates

Using your own car for work

HMRC have updated their guidance on using your own vehicle for work. The guidance needs to be read in conjunction with the mileage rates which for those using their own car for work purposes are unchanged at 40 pence a mile for the first 10,000 miles dropping to 25 pence a mile thereafter.

Internet links: HMRC factsheet mileage HMRC mileage rates

Tax payments

For those making tax and national insurance payments on 31 January 2010 HMRC are reminding that their bank details changed last year.  To confirm that you are making payment to the correct bank account please visit the link below.

Internet link: HMRC bank details

DECEMBER 2009 - INTRODUCTION

In this month’s enews we report on key announcements made in the Pre-Budget Report.

Please browse through the articles using the links below and contact us if any issues or questions arise.

With best wishes for 2010.

Extra national insurance burden ahead

Special Annual Allowance charge – new limits for 2009/10

Bank payroll tax

Offshore disclosure extension

Changes to the advisory fuel rates from 1 December 2009

HMRC warn of more scam emails

Tax relief on nursery vouchers

Cross-border VAT changes 2010

Bad weather advice

Extra national insurance burden ahead

One of the significant announcements in the Pre-Budget Report earlier this month is a further increase in national insurance contributions (NIC) which is to take effect from 6 April 2011. 

The NIC rates and limits are broadly frozen for 2010/11 at the 2009/10 figures, with a couple of minor exceptions.

An increase in the rates of NIC is proposed from April 2011 with an extra 1% being added to the rates applicable to employers, employees and the self-employed. The main rate of Class 1 (employee) NIC will be 12% and the Class 4 rate will be 9%. The employer rate will increase to 13.8%.

The additional rate of Class 1 and 4 contributions, payable on pay and profits currently in excess of £43,875, will also increase from the current 1% to 2%.

The government has announced that it will protect those at the lower end of the earnings scale by an increase in the point at which contributions become payable. It is therefore expected that employees paying the standard employee rate and earning below £20,000 will pay less NIC overall as a result of the change.

The government had previously announced that NIC rates would increase by 0.5% from April 2011. This further increase of 0.5% will represent a significant increase in costs particularly for employers.

Internet link: HMRC pbrn1

Special Annual Allowance charge – new limits for 2009/10

In the Pre-Budget Report earlier this month changes were announced to the complex rules for the Special Annual Allowance (SAA) charge which affects those with substantial income who make significant pension contributions. The current rate of the SAA charge is 20% on excess pension contributions. The aim of the charge is to discourage individuals from making significantly higher pension contributions in anticipation of the removal of higher rate tax relief which will occur in 2011.

The main features of the charge are:

·               It applies for 2009/10 and 2010/11 to individuals with relevant income in excess of £150,000 in either of those years or the two preceding years and where increased pension contributions have been paid after 22 April 2009.

·               The total pension contributions paid exceed £20,000 (the ‘SAA threshold’). A higher threshold of up to £30,000 may be possible depending on the level of contributions in previous years.

·               The SAA threshold is reduced by the amount of so-called ‘protected’ contributions which are sums being paid at least quarterly under arrangements put in place before 22 April 2009.

It is now proposed to lower the threshold for triggering the SAA charge by reducing the relevant income limit to £130,000 with effect from 9 December 2009. Individuals will be affected by this if their relevant income in 2009/10 or either of the two preceding years exceeds £130,000. For 2009/10 only, protected contributions will include any contributions paid up to and including 8 December 2009.

The rules will catch one-off contributions made by employers as well as lump sum payments made by the scheme member. In either case the charge is on the individual.

If you think you may be affected by this change in the rules please do get in touch.

Internet link: HMRC pbrn18

Bank payroll tax

In a move designed to tackle certain remuneration practices that are considered to have contributed to ‘excessive risk taking’ in the banking industry, a temporary bank payroll tax of 50% is to apply to certain bonuses regardless of how they are paid. The tax will apply to the amount of the bonus which exceeds £25,000 for any individual employee and is applicable to banks, building societies and other related financial businesses.

The bank payroll tax will apply to all discretionary and contractual bonus awards made after the announcement of the measure on 9 December 2009, except for contractual bonus entitlements which existed at the time of the announcement, where the payer has no discretion as to the amount of the bonus. The initial charging period will run until 5 April 2010. However the government has indicated that this period of charge could be extended until other relevant provisions of the Financial Services Bill come into force.

This one-off tax is payable on 31 August 2010. It will not be deductible in calculating the institution’s profit or loss for corporation tax or income tax purposes.

Internet link: HMRC bank payroll

Offshore disclosure extension

HMRC is giving taxpayers with offshore investments more time to come forward under the New Disclosure Opportunity (NDO). The registration deadline, which was due to expire on 30 November 2009 has been moved to 4 January 2010 as some banks need more time to contact their offshore customers.

HMRC are reminding individuals that the NDO is the last opportunity for taxpayers to obtain ‘favourable terms’ when advising HMRC of offshore investments that they have never reported previously. HMRC are currently in the process of obtaining information from 308 UK banks regarding their offshore customers in an effort to ensure that everyone pays the right tax. 

Dave Hartnett, HMRC’s Permanent Secretary for Tax said:

“We know that some bank customers will not be contacted by their banks in good time for the original deadline of 30 November so in the interests of fairness we have decided to extend our deadline by a month to 4 January. 

“I strongly urge anyone who has been hiding taxable assets offshore to go on line and register. The NDO is voluntary but from the start of the New Year we will begin to investigate those who were eligible to use the NDO but instead buried their heads in the sand. Don’t let that happen to you.”

“This is a great way to start the New Year – with the knowledge that your tax affairs are in order and the certainty that the penalty will be capped at 10%.”

If you have any questions or concerns in this area please do get in touch.  

Internet link: HMRC press release

 Changes to the advisory fuel rates from 1 December 2009

To reflect the increase in fuel prices, HMRC have issued new advisory fuel rates for employees driving employer provided cars. These take effect for all journeys undertaken from 1 December, so employers using the advisory rates should advise affected employees and update any expense forms as soon as possible.

The advisory fuel rates may be used for journeys undertaken on or after 1 December 2009.

HMRC have in the past given employers a month’s notice of changes to these rates. However, according to the HMRC guidance:

“After discussions with the relevant trade bodies, the month's notice previously given has been withdrawn for this change. Employers are not obliged to reimburse their employees for business fuel at these rates as long as they do not exceed them overall. Employers making or collecting payments at the superseded rate because they have not been able to change their systems in time may use their judgement on whether to make or require a second payment in respect of the same period in order to apply the new rate from its effective date. However, employers should note that under the normal rules, employees are only able to avoid the car fuel benefit charge if the amount they repay in respect of private fuel at least equals the amounts based on the rates as published.”

Other points to be aware of about the advisory fuel rates:

• Employers do not need a dispensation to use these rates.
• Employees driving employer provided cars are not entitled to use these rates to claim tax relief if employers reimburse them at lower rates. Such claims should be based on the actual costs incurred.
• The advisory rates are not binding where an employer can demonstrate that the cost of business travel in employer provided cars is higher than the guideline mileage rates. The higher cost would need to be agreed with HMRC under a dispensation.

If you would like to discuss your car policy, please contact us.

Internet link: HMRC advisory fuel rates

   HMRC warn of more scam emails

As the end of the year fast approaches HMRC are reminding taxpayers to be vigilant as scam emails have been reported. For details of their latest guidance on scam emails, more information on this and other scams together with a copy of the latest example visit the links below.

Internet links: HMRC guidance Latest example

 Tax relief on nursery vouchers

Gordon Brown had revised his proposal to withdraw the income tax and NI exemption on employer provided childcare vouchers.

Currently employees are exempt from tax and NIC on childcare vouchers provided by employers. The exemption is available on the first £55 a week of vouchers per employee, as long as a range of conditions are met. Any excess over the £55 is liable to tax and to NIC (both employees’ and employers’ contributions).

In a change to the original announcement Gordon Brown has now said:

‘I have already made clear that no family currently in receipt of tax relief for their childcare vouchers will see any change in the support they receive. But following our discussions I can now also say that we will retain tax relief for new childcare vouchers issued in the future. However, there still remains a concern that a disproportionate benefit is accruing to higher rate taxpayers. So in order to ensure that this tax relief is given on a fairer basis to all families, we will ensure that all taxpayers get the same income tax relief as basic rate taxpayers do currently. This will take place from April 2011 and will not affect those receiving vouchers issued before that date.’

Under the revised proposals it appears that from April 2011, vouchers will not attract the full current tax and NIC exemptions as their tax relief will be restricted to the basic rate.  Higher rate taxpayers will be liable to tax on the vouchers at their marginal rate of tax of 20%, being the difference between basic rate of 20% and the higher rate of 40%.

Vouchers issued prior to April 2011 will be unaffected by the change.

Internet link: Number 10 website

 Cross-border VAT changes 2010

HMRC issued some important guidance regarding the changes in the place of supply of services rules which take effect from 1 January 2010.

This guidance is part of a package of measures being introduced to simplify and modernise the VAT system for cross-border trading and to counter fraud across the EU. The measures include:

• changes to the basic place of supply of services rules
• changes to the time of supply rules
• European Sales List ( ESL) reporting for supplies of cross-border services
• a new electronic refund procedure for VAT incurred in other EU Member States.

If you are unsure how these changes affect you or your business please do get in touch.

Internet link: HMRC cross border changes

Bad weather advice

The Institution of Occupational Safety and Health (IOSH) are warning people to be prepared for poor weather conditions when travelling. They have produced a few tips to help ensure that travel, whether it is for work or pleasure, remains safe despite the weather.

Their advice can be found by visiting the link below.

Internet link: IOSH website

NOVEMBER 2009 - INTRODUCTION

In this month’s enews we report that the Chancellor has announced the date of the Pre-Budget Report.

We also include our usual round up of news. Please browse through this month’s articles using the links below and contact us if any issues or questions arise.

Pre-Budget Report 2009

Intrastat thresholds

VAT and New Year’s Eve traders

Parties for employees

Swine flu and SSP

Online filing of VAT returns

First aid at work

Business rates bills

Pre-Budget Report 2009

Alistair Darling will make his Pre-Budget statement to the House of Commons on Wednesday 9 December 2009 at 12:30.

We will let you have details of the important announcements in the next issue.

Internet link: Treasury website

Intrastat thresholds

HMRC have announced significant changes to the Intrastat thresholds. Intrastat is used to report the movement of goods within the EU over certain thresholds. Those traders with an annual intra-EU trade in goods exceeding the exemption thresholds are required to provide monthly statistical returns (Intrastat Supplementary declarations).

From 1 January 2010, subject to parliamentary approval:

• the exemption threshold for arrivals will be increased from £270,000 to £600,000 and
• the exemption threshold for dispatches will be reduced from £270,000 to £250,000.

The significant change in the arrivals threshold is due to a reduction in the EU minimum requirement for Member States to collect data from 97 to 95%.

The threshold for dispatches has been reduced to £250,000 due to the current economic downturn and the consequent reduction in the number of UK businesses trading within the EU.

If you would like any advice as to how this change affects your business please do get in touch.

Internet link: HMRC Brief

VAT and New Year’s Eve traders

If you are going to be out celebrating on New Year’s Eve or indeed if your business will be operating over midnight, you will be glad to hear that the government has announced a relaxation of the VAT rules. Pubs, clubs, restaurants and other retail businesses remaining open past midnight on New Year’s Eve will be allowed to continue charging VAT at 15% on their sales until they close or until 6am on 1 January 2010, whichever is the earlier.

Similar arrangements will apply to telecommunications companies in respect of calls and texts made up to 6am on 1 January.

Internet links: HMRC VAT Brief Press release

Parties for employees

Are you planning a party for your employees? The good news is that, unlike entertaining customers, the costs of entertaining employees are generally allowable against the profits of the business.

But what is the tax treatment for the employees themselves? Is it a perk of their jobs and will they have to pay tax on a benefit?

Generally, as long as the total costs of employee annual functions in a tax year are less than £150 per attendee (VAT inclusive) there will be no tax implications for the employees themselves. In considering this limit make sure you have included all the costs, which may include not only the meal itself but also any drinks, transport and accommodation that you provide.

If the costs are above the £150 limit then do get in touch so we can advise you how best to deal with them.

Internet link: HMRC guidance

Swine flu and SSP

Under existing rules for Statutory Sick Pay (SSP) employees can self-certify for the first seven days of their illness and employers cannot ask for medical evidence during this period. There has been no change to this requirement.

If employees are ill for more than seven days, employers can ask for reasonable evidence that they are not able to work and decide what, if any, further information they may need.

During the swine flu pandemic, employers are being asked to consider other evidence (instead of a doctor’s certificate) as proof of an employee's illness. This will hopefully help to reduce the burden on GPs.

Internet link: HMRC guidance

 Online filing of VAT returns

HMRC are reminding businesses that new rules on how VAT returns are submitted and payments are made will come into force next year. Paper VAT returns will be phased out from 1 April 2010.

As a start of this phasing out process, businesses with:

• annual turnover of £100,000 or more, and  
• all businesses which register or should have registered for VAT on or after 1 April 2010

will need to submit their VAT returns online and make payments electronically from April 2010. Those businesses that are already VAT registered, with a turnover below the threshold, will have the choice to use paper returns but this will be reviewed by 2012.

Further guidance has been issued together with details of the penalties for failing to make an electronic return. The penalties will be:

• turnover £100,000 (VAT exclusive) and below - £100
• turnover £100,001 to £5,600,000 - £200
• where turnover exceeds £5,600,000 the penalties charged will be higher.

HMRC have announced a period of grace which means that penalties will not be imposed initially, however periods ending on or after 31 March 2011 will be charged. This grace period is to allow businesses to adjust to the change in procedures.

HMRC have also announced simplified procedures for agents to submit their clients VAT returns, so please do get in touch if you would like any further advice in this area.

Internet link: HMRC VAT Statutory instrument

First aid at work

The Health and Safety Executive are reminding businesses that the guidance for first aid at work changed from 1 October 2009. 

To insure that you are complying with the revised requirements please visit the link below.

Internet link: HSE website

Business rates bills

The government has confirmed that 60% of business rates will fall next year as a result of revaluation and that it will not collect a penny more of extra revenue as a result of the 2010 revaluation, which is carried out every five years.  However, rates bills for some businesses will rise significantly.

The government recently announced that it will remove the requirement to re-apply for small business rate relief, which can reduce business rates by up to 50%, at revaluation, reducing bureaucracy for small businesses and billing authorities.

John Cridland, CBI Deputy Director-General, said:

“We’re concerned by the government’s announcement on business rates today. Although business rates will fall overall, in some areas of the country they will rise sharply, which is worrying at this critical time for the economy.

We called for the government to cap business rate increases at lower levels than those announced today. For example, we called for a maximum rise of 7.5% for larger properties, but the government has announced a maximum rise of 12.5%. This is worrying.

We’re particularly concerned about the potential for sharp rises in business rates in London, where properties were revalued near the height of the market. Given the economic situation, a significant rise in business rates could make a critical difference to companies trying to survive the recession.”

Internet links: CBI press release Press release

OCTOBER 2009 – ENEWS

In this month’s enews we report on various issues including the announcement that tips no longer count towards employees pay for National Minimum Wage purposes.

Please browse through this month’s articles using the links below and contact us if any issues or questions arise.

Tips don’t count towards the NMW

Tax relief on nursery vouchers to be withdrawn

Scrappage Scheme

Paying PAYE on time

31 October self assessment deadline

Online payroll starter and leaver forms

Royal Mail postal strike

Tips don’t count towards the NMW

As you may be aware the National Minimum Wage (NMW) rates increased from 1 October 2009 to:

• an adult rate of £5.80 an hour. This is payable to those age 22 and over.

• a development rate of £4.83 for those aged 18 – 21

• and for 17 year olds a rate of £3.57 an hour.

A change was made from the same date, to the elements of pay which can count towards the payment of the NMW rate. Tips, gratuities, cover charges and service charges do not count from 1 October 2009 towards NMW in any circumstances. This is a change to the previous rules which allowed such payments to count towards the NMW rate in certain circumstances.

As detailed on the Business Link website:

“…before 1 October 2009, tips, gratuities, service charges and cover charges did count towards the NMW as long as you paid them to your workers through your payroll. They no longer count towards the NMW, regardless of whether they are paid through your payroll or are given direct to workers by customers or a tronc master.”

If you have any queries on the NMW, or how this change impacts on your employees, please do get in touch.

Internet links: Business Link Website Employer Bulletin

Tax relief on nursery vouchers to be withdrawn

In his speech to the Labour Party Conference, the Prime Minister, Gordon Brown announced an extension of free nursery places, to be financed by the withdrawal of the tax and National Insurance (NIC) exemptions for childcare vouchers.

The proposal is that the provision of free nursery places will be extended to two year-olds (this would be on top of the existing free childcare available to three and four year olds). It is expected that 250,000 children will benefit from this by 2015/16.

However, the quid pro quo would be the eventual withdrawal of tax and NIC exemptions for employer provided childcare vouchers. Currently employees are exempt from tax and NIC on childcare vouchers provided by employers. The exemption is available on the first £55 a week of vouchers per employee, as long as a range of conditions are met. Any excess over the £55 is liable to tax and to NIC (both employees’ and employers’ contributions).

Under the proposals, it appears that from April 2011, employees who join an employer-supported voucher scheme will not be entitled to the current tax and NIC exemptions. Those already receiving vouchers will be unaffected until April 2015, when the exemptions for vouchers will be withdrawn completely.

More details are expected in the 2009 Pre-Budget Report.

Internet link:  Childcare vouchers

Scrappage Scheme

The Vehicle Scrappage Scheme is a voluntary scheme for motor dealers under which participating dealers give buyers a £2,000 discount off the purchase price of a new car (or certain types of small van) in exchange for scrapping their old qualifying vehicle. Funded by the government and manufacturers the scheme has proved very popular and according to the Department for Business Innovation and Skills (BIS) website 260,226 cars have now been scrapped under the scheme, which is set to run until February 2010.

An extra 100,000 (£100 million) has been added to the number of scrappage deals that the government will fund, taking it to 400,000 in total. In a change to the qualifying conditions, the age of the vehicle has also been adjusted to first registered on or before 29 February 2000 for cars or 28 February 2002 for vans.

For general information on the £2,000 scrappage discounts and other conditions visit the BIS website link below. For HMRC’s views on the business tax and VAT implications of the car and van scrappage scheme use the HMRC link below.

If you have any queries on the tax implications of the scheme please do get in touch.

Internet links: Scrappage website  BIS website HMRC Brief

Paying PAYE on time

HMRC are warning employers that from May 2010 they may have to pay a penalty if they do not pay their PAYE on time.  These are generally due each month, on time and in full.

HMRC will implement late payment penalties for payments due from May 2010. From then on, employers may have to pay penalties if they make more than one PAYE payment late in a tax year. The new penalties will apply to all employers, including large employers (those with more than 250 employees) who currently are subject to a Mandatory Electronic Payment surcharge.

HMRC are advising employers to let them know if they are likely to have difficulty making a payment on time, so that arrangements can be made and penalties can be avoided. Their guidance states that where employers enter into ‘time to pay’ arrangements, before the liability becomes due, no penalty will be charged. Penalties for late payment start at 1% increasing to 4% depending on the number of late payments in the year. Extra penalties will be added where liabilities our outstanding for a further six and then 12 months.

Internet link: Employer Bulletin

  31 October self assessment deadline

HMRC are warning taxpayers who wish to file a paper (non electronic) tax return for the 2008/09 tax year, should generally reach them by midnight on Saturday 31 October 2009 (or be hand delivered by Monday 2 November).

However, due to proposed postal strike action, HMRC are further advising that returns:

• posted before the 31 October but not delivered by that date (proof of posting will be required) or
• hand delivered to a local tax office, if more convenient

will also not attract a late filing penalty.

The deadline for filing returns may be later in some circumstances for example:

• you received your tax return or a letter (called a 'Notice to File') telling you to file online after the 31 July
• there's no software available to file your tax return online for example Non-Resident Companies.

If you fail to make the paper filing deadline, please do get in touch if you would like us to help you file your return online.

Taxpayers generally have until 31 January 2010 to submit their self assessment return online.

Internet links: HMRC guidance on tax return deadlines and penalties

Online filing guidance HMRC guidance due to proposed postal strike

Online payroll starter and leaver forms

HMRC are reminding employers with 50 or more employees that they should now be filing online their starter and leaver information online. The forms which need to be filed electronically, and should have been online since 6 April 2009, include:

• P45 (Part 1) – details of employee leaving
• P45 (Part 3) – new employee details
• P46 – details of employees starting work who do not have a P45
• P46 (Pen) – new pension details
• P46 (Expat) – details of those seconded to work either wholly or partly in the UK whilst remaining employed by an overseas employer

Penalties

HMRC advise that they will shortly begin issuing warning letters to those employers with 50 or more employees who are still not filing their starter and leaver forms online. These warning letters will refer to paper submissions made up until 5 January 2010 and will only refer to one paper submission.

From the start of the fourth quarter of 2009/10 (6 January 2010) HMRC will begin charging penalties to those employers with 50 or more employees who send HMRC starter and leaver notifications on paper. Penalties will range from £100 to a maximum of £3,000 depending on the number of paper forms sent in paper format.

The first penalty notices will be sent in April 2010. Although this is some time away it is important to check that employers are sending starter and leaver notifications online.

Internet link: Employer Bulletin

Royal Mail postal strike

For the latest information on postal strike action please visit the link below.

Internet link: Royal Mail website