Ceridian Customer Conference 22 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 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 CO 2 emissions when driven –Reduced charge for cars which have approved CO 2 emissions of exactly 75g/km or less

Budget 2010: Announcements affecting employers Company car tax from 6 April 2012: Introduction of new CO 2 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:

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 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 19 th or 22 nd falls consider changing your payment method sign-up for alerts –visit 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 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 Employees

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 HMRC to tell us of changes to the final three Go to This will reduce the number of MS120 forms we send you

CD-ROM

Download the September update from: Don’t forget to register for alerts at:

CD-ROM 2010: Help and guidance Go to 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 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 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 Leave From August 2010: Technical specifications for Payroll software available From October 2010: Guidance for employers and workers at From April 2011: Updated Helpbook E19 and ASPP calculator available at:

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 Discusses: Real Time Information; and Centralised Deductions

Any questions?