Chartered Accountants of Poynton, Cheshire |
|
National minimum wageFrom 1 October 2007 this is set at £5.52 per hour for workers aged 22 or older. The reduced development rate for employees aged between 18 and 21 is £4.60 per hour. The rate for workers who are under 18 and no longer of compulsory school age is set at £3.40 per hour. National Insurance numbersIt is vital that, as an employer, you show full and correct National Insurance numbers on all documents on which you record contributions, particularly when the forms are submitted to HMRC as part of PAYE compliance. If an employee does not know their National Insurance number, you can trace it through HMRC by filling in HMRC leaflet CA6855. If you have doubts over the accuracy of the National Insurance numbers that you hold, HMRC can check and update them for you. The full procedure is set out in HMRC leaflet CA89. Employee leaving?When one of your employees leaves, you need to give them a form P45 and send a copy to HMRC. You can file P45s online, and this will be compulsory for small employers by April 2011. Employers with 50 or more employees must file online by April 2009. The form is straightforward to fill in but even simple errors could mean your form is rejected. These errors include incorrect or missing National Insurance numbers, pay details or tax codes. |
New Rules for Subcontractors in the Building IndustryFrom 6 April 2007 HM Revenue and Customer (HMRC) will be introducing a revised and stricter regime for subcontractors in the building industry. This will affect the vast majority of workers and employers in the industry. The main changes are shown below. CardsThere will no longer be any CIS (Consruction Industry Scheme) cards, certificates or vouchers. VerificationThere will be a new process whereby all new subcontractors must be 'verified' with HMRC by the main contractor. This can be completed online or by telephone. Pre-existing subcontractors do not need to be verified and all current contractors will be sent a list of their subcontractors who will not need verification. PaymentThe verification process will determine whether the subcontractor will be paid gross or net after a deduction of tax at a rate to be set by HMRC. Monthly returnsMain contractors are required to submit a monthly return of payments made to subcontractors, with fines for late or non-submission. The monthly return also requires the contractor to confirm that none of the subcontractors are, or should be, employees - this is known as a 'status declaration'. Nil returns must still be made even if no payments are made in the month. (The annual returns ceased on 5 April 2007.) Current subcontractorsMost of the current subcontractors will be transferred to the new scheme. Subcontractors who are new to the main contractor will need verifying. Employment StatusThis is the big change in the new system. Basically, the rules to determine whether an individual is an employee or a subcontractor have not changed. What HAS changed is the requirement for the main contractor to confirm that they have determined the correct status for each subcontractor. You can carry out a status check at www.hmrc.gov.uk by clicking on this sentence. This is an online facility where the contractor will key in the main features of the contract to determine the employment status of the individual. If it is determined the person is an employee rather than a subcontractor, this will mean extra costs for the main contractor in terms of employer's National Insurance, contracts of employment and possible sick and holiday pay entitlement. If you need any help on implementing these new rules in your business, please give us a call here at Appletons! |
Whilst all due care and attention is taken in preparing the articles which appear on this website, no liability can be accepted for any of its contents. It is designed to be of a general nature, and no action should be taken without our specific help tailored to your unique circumstances. |