From 1 October 2011, the National Minimum Wage rates will increase, as per the table below.
| Old rate(per hour) | Employee | New rate(per hour) |
| £5.93 | Workers aged 21 and over | £6.08 |
| £4.92 | Workers aged 18 to 20 | £4.98 |
| £3.64 | Workers aged 16 to 17 | £3.68 |
| £2.50 | Apprentice under 19 | £2.60 |
| £2.50 | Apprentice 19 and over but only in the first year | £2.60 |
Please contact us if you have any questions.
The first return falling within the new penalty regime will be the return for the month ending 5 November 2011. A fixed penalty of £100 will apply immediately a return is late and further penalties may arise if the return is not subsequently filed. Please see our previous article on Construction Industry Scheme (CIS) new penalty regime.
Please contact us for help if you require assistance in completing your CIS returns or have recently received a penalty.
H.M. Revenue and Customs (HMRC) have published the latest advisory fuel rates relating to mileage payments for business travel in company cars. These are as follows:
| Engine size | Petrol | LPG |
| 1400cc or less | 15p | 11p |
| 1401cc to 2000cc | 18p | 12p |
| Over 2000cc | 26p | 18p |
| Engine size | Diesel |
| 1600cc or less | 12p |
| 1601cc to 2000cc | 15p |
| Over 2000cc | 18p |
The only change this quarter is the reduction of 1p per mile in LPG for engine sizes of 1401cc to 2000cc.
The new rates will be effective from 1 September 2011, however for the first month employers may continue to use the previously published rates if they choose to.
The next quarterly review will be effective from 1 December 2011. The revised fuel rates will be published on the fuel rates page on the HMRC website when they are released.
Advisory fuel rates can be used to calculate the following:
A more detailed explanation of the use of these rates is on the HMRC website.
The rates applying for earlier periods are also on the HMRC website.
If you have any questions regarding the use of advisory fuel rates or mileage payments please contact us.
Changes have been made to the tax code used by employers in certain circumstances which have come in to effect from 6 April 2011.
The most common situation this effects for smaller businesses is when a new employee starts working for their new employer without providing form P45 and not completing form P46.
Form P46 is used by employers to notify HMRC that an employee has started work without providing a form P45. Previously in these circumstances where an individual did not complete a form P46 before first payday then the employer had to complete form P46 to the best of their knowledge and submit the form to HMRC to update individual’s records and enable HMRC to issue a code if necessary. The employer was then authorised to operate code BR (on a cumulative basis) on the employees pay until they were notified by HMRC of the appropriate tax code. This resulted in some higher paid employees paying less tax than was due and an underpayment arising at year end.
From 6 April 2011 the code to operate in the above circumstances is 0T (zero allowances) instead of BR, so that the new employee will pay tax at the basic, higher and additional rate as appropriate.
Other situations affected by these changes:
For further details on these situations and other changes concerning codes then follow link HM Revenue & Customs: Summary of PAYE regulation changes coming into effect on 6 April.
For further advice on all areas of PAYE please contact us.
