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September 2010 - E-NEWS
Please browse through this month’s articles using the links below and contact us if any issues or questions arise.
- National minimum wage rates rise from 1 October
- Helping hand on VAT errors
- HMRC steps up online employer information
- Taxpayers warned of phone con
- HMRC brings in debt collectors in 2010-11
National minimum wage rates rise from 1 October
Employers are reminded that new national minimum wage rates (NMW) will come into force from 1 October. The new rates are:
- £5.93 an hour to workers aged 21 and above (the main rate)
- £4.92 an hour to workers aged 18-20
- £3.64 an hour to workers aged below 18 who are no longer of compulsory school age
Changes to the NMW from 1 October 2010 include a reduction in the age threshold for the main rate from 22 to 21.
For the first time, a NMW rate also applies to apprentices. Apprentices under the age of 19 or apprentices over the age of 19 in the first year of their apprenticeship must be paid at least £2.50 an hour.
Employers who provide living accommodation for employees are able to offset the NMW by £4.61 for each day that accommodation is provided.
LINKS: National minimum wage – the basics
- The Low Pay Commission is carrying out consultation to help it make recommendations for NMW rates from October 2011.
The commission is seeking feedback on questions including how firms are coping with the minimum wage as the economy emerges from the recession and how the NMW affects the competitiveness of small firms.
LINKS: Low Pay Commission consultation letter
- From 1 January 2011, employers will need to ensure that they pay workers the NMW in addition to payments for travel to a temporary workplace.
The move follows consultation earlier in the year and is designed to prevent what the government describes as “potentially exploitative arrangements” affecting some temporary workers paid at or near NMW.
Many temporary workers take part in travel and subsistence schemes operated by certain types of business that take advantage of tax relief on travel from home to a temporary workplace, by agreeing that some of the pay that would be subject to tax and national insurance contributions (NIC) is replaced with expenses payments, which provide tax and NIC savings.
In its consultation paper, the government says that such arrangements can adversely affect NMW workers access earnings-related contributory benefits and that travel and subsistence schemes seen by HM Revenue & Customs leave them only slightly better off in terms of take home pay. It also says that in some schemes, it is the business employing the workers who enjoy the greatest financial benefit.
LINKS: Travel and subsistence expenses consultation
HM Revenue & Customs (HMRC) has issued new guidance on correcting VAT errors.
HMRC says it has found that many mistakes reported to its Error Correction Team could have been corrected by customers and that as there is currently a six to eight-week delay in processing corrections, it makes sense for customers to correct errors themselves if possible.
The guidance, contained in a notice issued in July, cancels and replaces Notice 700/45 dating from July 2009 and includes advice on how to:
- amend VAT records if errors are discovered
- correct errors discovered on VAT returns already sent to HMRC
- claim a refund if VAT has been overpaid or not enough credit has been claimed on a return
- complete VAT returns or make a claim if there is disagreement with an HMRC decision on the VAT treatment of a supply.
LINKS: Correcting VAT errors
HMRC steps up online employer information
Employers will be able to access more HM Revenue & Customs (HMRC) advice and guidance online and via downloads as HMRC works to reduce the amount of information it posts out.
HMRC has already stopped issuing paper copies of its Employer Bulletin and most employers can now register to receive an email when a new edition of the bulletin is published on the HMRC website.
This alert service will then include other publications and services when they are replaced with online versions.
It is also expected that the tools and support currently provided by the Employer CD-ROM will be available to download from next year.
LINKS: Registration for email alerts
HM Revenue & Customs (HMRC) is warning taxpayers to be vigilant following reports that thieves are making phone calls pretending to be the taxman.
The fraudsters tell taxpayers they are due a tax rebate and ask for bank card details over the phone. They then attempt to take money from the account using the details provided, with victims also running the risk that their personal details will be sold to other organised criminal gangs.
HMRC director of customer contact Chris Hopson said: “We only ever contact customers who are due a tax refund in writing by post.
“We never use telephone calls, emails or external companies in these circumstances. We strongly urge anyone receiving such a phone call not to give any information to the caller, but report it to the police straightaway.
“If customers receive an email claiming to be from HMRC, we recommend they send it to us for investigation before deleting it permanently.”
HMRC strongly advises customers to:
- Check the advice published at www.hmrc.gov.uk/security/index.htm to see if the email received is listed
- Forward suspicious emails to HMRC at phishing@hmrc.gsi.gov.uk and delete it from their computer/mail account
- Do not click on websites, links contained in suspicious emails or open attachments and follow advice from www.getsafeonline.co.uk
- If they believe they have been the victim of an email scam, report the matter to their bank/card issuer as soon as possible. If in doubt, please check with HMRC at http://www.hmrc.gov.uk/security/fraud-attempts.htm
HMRC brings in debt collectors in 2010-11
Debt collection agencies will be used by HM Revenue & Customs (HMRC) during 2010-11 to collect an additional £140m of tax debt.
HMRC will be working with Commercial Collection Services Ltd, Credit Solutions Ltd, Fairfax Solicitors Ltd and ivory Recovery Services Ltd on the project.
In the June 2010 Budget, it was announced that, following a successful pilot, HMRC would use debt collection agencies (DCAs) operating under industry and HMRC standards to boost HMRC’s debt collection capacity and help pursue lower value debts.
Nick Lodge, HMRC’s director of debt management and banking, said: “We do understand that some businesses and individuals are not in a position to pay what they owe and we have put procedures in place to help those who are genuinely struggling.
“But those who simply refuse to pay have to be pursued, and our partnership with DCAs ensures they will be.”
HMRC will write to the debtor providing a final opportunity to pay or reach an agreement with the department before referring a debt to a DCA.
LINKS: Press release
HWB
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