Are you keeping up to date with changes?

No matter how long you have been employing staff and operating the payroll, changes happen and catch us unawares. HMRC provide a summary of 'what's new' in the front section of most of their guides or highlight any changes by way of a horizontal line next to newly inserted or changed text, so take our advice,  make yourself a cuppa and take a few minutes to look through the guides, the CDRom or the HMRC website and see what's new. Isn't it better to find out sooner rather than later that something important and affecting your payroll has changed?

Electronic filing of Employer Annual Returns 

Well, the new tax Year is with us and for small employers we move one year closer to the need to submit our Employer Annual Return electroncially. For thos intrepid small employers who have been submitting their returns  electronically for the last few years, you will already have enjoyed £650 in cash incentives from HMRC, and for filing your 2007/2008return you will be looking forward to receiving your cash incentive of £100 (if you haven't already received it?). 2008/2009 is the last year in which the cash incentives will be payable to small employers who choose to file their return this way - it's not too late if you haven't yet taken the plunge and £75 could be yours for making the change early.

Budget (in brief) 2008

As we approach the new tax year it isn’t so much the March 2008 budget that is going to have an impact on employers and their payrolls, in deed it is the March 2007 budget that will be having the biggest impact as we process our April wages & salaries, particularly if we employ predominately lower paid workers (either part-time or on a low rate of pay). The removal of the Starter Rate band of 10% on the first £2,230 of taxable pay is going to have a significant impact even allowing for the reduction in the Basic Rate of income tax from 22% - down to 20%.

However, back to the budget 2008:

Income tax allowances will increase in line with inflation:

Personal allowance will increase to £5,435.

Age-related personal allowances will rise to:

£9,030 for people aged between 65 and 74

£9,180 for those aged 75 and over.

Married couple's allowance (for those aged less than 75 and born before 6th April 1935) is increased to £6,535 and for those over 75 is increased to £6,625.
 
Income limit for age-related allowances will be increased to £21,800.
 
Blind person’s allowance increased to £1,800.

Gift Aid - transitional relief for charities
With the reduction in the standard rate of income tax from 22% to 20% from the 6 April 2008, charities were facing a reduction in their income as refunds of tax would have been proportionately reduced. To maintain cash flow charities would have needed to approach their donors for more funding. To counter this problem the Revenue are introducing a 2% supplement. The extra tax concession will apply for the tax years 2008/09, 2009/10 and 2010/11.