Chartered Accountants of Poynton, Cheshire |
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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. Money launderingThere have been changes to the identification procedures (ID) that accountants have to legally carry out on their clients. Until December 2007 this was only required for new clients taken on after 2004. In December this changed, so now we may need to carry out a formal ID check on all our clients. While this is unlikely for long-established clients, we might have to carry out an additional ID check on some clients for whom we do not have sufficient ID details on our files, to satisfy the regulatory requirements. |
New Tax PenaltiesA new penalty regime is being introduced for incorrect returns for income tax, corporation tax, PAYE, National Insurance and VAT. This new penalty regime will apply to most taxes, rather than the separate rules that currently apply. The new penalties will be based on the amount of tax avoided and the reasons for that avoidance. So, there will be lower penalties for 'genuine mistakes' and much higher ones for deliberate actions to conceal income. The new penalty regime is expected to be introduced for accounting periods starting from 1 April 2008. Penalty levelThe amount of the penalty will depend on three criteria: - the amount of tax that would have been lost - the nature and behaviour giving rise to the understatement - the extent of the disclosure by the taxpayer. The penalties that can be levied will range from nil to 100% of the tax lost. The new regime means that there will be lower or no penalties for genuine mistakes that the taxpayer discloses, but potentially higher penalties for deliberate tax evasion. This should encourage taxpayers who discover errors in their tax affairs to disclose them without fear of excessive penalties. Suspended penaltiesA new concept of suspended penalties will be introduced. HMRC can impose a penalty that they will not enforce if no further errors are revealed while the suspension is in force. |
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