2009 Payroll Changes

IMPORTANT NOTICE

1). Changes to Holiday Entitlement

From 1 April the statutory amount of holidays for any employee increases to 5.6 weeks or 28 days. Please note that this can include the 8 bank holidays so in effect an employee must be paid for 4 weeks holiday.

You will need to apply this to whatever date your leave year commences on, to see the difference. For example if the leave year starts on 1 January, the employee’s new entitlement for this year will be 27 days as the new rule does not apply for the first 3 months of the year. If it’s 1 April, the employee’s entitlement will be 28 days.

If you have any queries about the above changes and how they will affect you, please feel free to call our Pay roll Manager Mr Rob Bentley on 01263 722122 or 07866 509324.

2). Increases to PAYE and National Insurance

The emergency tax code applied to all new starters who are unable to provide a P45 changes from 1 April to 647L. This means that employees on this code can earn £125 per week or £540 per month without paying tax. The threshold for paying NI also changes to £110 per week or £476 per month.
Please ensure that if you currently have any employees on 603L, you automatically increase their tax code to 647L unless you have received a separate coding notice from HM Revenue & Customs.

3). Changes to Statutory Payments

From 1 April the rate of Statutory Sick Pay increases to £79.15 per week, and the rates for Statutory Maternity Pay, Paternity Pay and Adoption Pay increase to £123.06 per week. Please ensure that these rates are correctly applied where required and that any entitlement to reclaim these payments is correctly made.

4). Filing of PAYE forms online

If you have more than 50 employees, you must send all P45s and P46s online from 6 April. For employers with less than 50 employees this does not come in until 6 April 2011, but you may prefer to start filing online before then, so you are fully prepared. Please note that the number of employees includes leavers so if you have a high turnover of starters and leavers, you could be required to start filing forms from next month.
New Automatic Penalties for those who do not comply with National Minimum Wage Rules
From 6 April 2009, a new automatic penalty will be levied on employers where compliance officers find arrears of the National Minimum Wage (NMW) after 6 April 2009. Penalties will range from £100 to £5,000 and those employers who settle within 14 days of notification will receive a 50 per cent discount of the penalty for prompt payment. The penalty must be paid in addition to any arrears owed to the workers. The most serious cases of non compliance may be tried in a Crown Court and subject to an unlimited fine.
To reflect this change, the current system of separate NMW enforcement and penalty notices will be replaced by a combined notice of underpayment and penalty. This will be issued whenever we discover that arrears were outstanding at the start of our enquiries.
The notice will detail the amounts due to workers (calculated according to the formula shown below) and any penalty due on those arrears. The penalty will be half the total underpayments shown on the notice, for pay reference periods starting on or after 6 April 2009. HMRC can pursue arrears claims for workers going back up to six years.
You will be able to appeal both the amount of the arrears and the penalty to an Employment Tribunal (an Industrial Tribunal in Northern Ireland) under new appeal rights. If you have any questions about the NMW you can call the National Minimum Wage Helpline in confidence on Tel 0845 6000 678.