Electronic Filing

Electronic filing has been introduced by the Inland Revenue to allow the submission of year end documents (forms P35 and P14) via the Internet or EDI. This will be compulsory for all employers by 2009/10 tax year.

If you are a large employer, ie have more than 250 employees, then you must register for electronic filing with effect from the 2004/05 tax year. For the larger employer this means that not only year end documentation must be submitted electronically you must also remit the monthly tax and national insurance payments in this way.

Medium sized employers, those with between 50 and 249 employees, must file end of year forms electronically with effect from 2005/06 tax year.

If you fall into the small employer category, with less than 50 people, you do not need to be registered until the 2009/10 tax year. However, if you register from 2004/05, you will be eligible for tax-free incentive payments from the Inland Revenue. This is for the electronic submission of year end documents only. Incentive payments are not available to medium and large employers.

NATIONAL MINIMUM WAGE RATES

With effect from 1st October 2006 the new increased rates are;

£5.35 per hour for workers aged 22 and over

£4.45 per hour for workers aged 18 to 21

£3.30 per hour for workers under 18 but over compulsory school leaving age, apprentices aged 16 and 17 exempted

£4.15 per day for accommodation offset that can be taken into account in calculating NMW for employees who are provided with housing as part of their job.

Statutory Redundancy

There is a limit on the amount of a week's pay that can be taken into account in working out your entitlement. With effect from 1st February 2006 this is £290.

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Sick Pay

If an employee is off sick for 4 or more consecutive days, and they qualify for Statutory Sick Pay (SSP) purposes, they are entitled to be paid SSP. For the first 7 days (one week depending on working pattern) of absence from work they must complete a Self Certification form detailing why they have been absent from work.

Absences of more than one week must be covered by a sick note from a doctor. SSP can only be paid on receipt of a sick note or self certification form.

SSP is paid for a maximum of 28 weeks. From 6th April 2006, the weekly rate of SSP is £70.05 for employees with average weekly earnings of £84 or more.

After that the employer must complete a form SSP1 stating why the employee is no longer entitled to SSP. The form should then be given to the employee who should contact their local Department of Works and Pensions to claim incapacity benefit.

This form can be obtained from
www.dwp.gov.uk/lifeevent/benefits/statutory_sick_pay.asp

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Statutory Maternity Pay (SMP)

Statutory Maternity Pay is paid to any employee who satisfies the qualifying conditions even if she does not intend to return to work after the baby is born. SMP is paid on a weekly basis.

You must have medical evidence of the date the baby is due to pay SMP. This would normally be a maternity certificate MATB1 but you can accept other medical evidence if it shows the date the baby is due and is signed by a doctor or midwife.

You can refuse to pay SMP if your employee does not give you medical evidence.

A mother will get ordinary maternity leave no matter how long she has worked for you.

The first 6 weeks SMP are paid at 90% of the employee's salary and 20 weeks from 6th April 2006 at the rate of £108.85 or 90% of the employee's average earnings, whichever is lower.

All employers are entitled to recover 92% of any SMP paid. If you qualify for small employer's relief you are entitled to recover 100% of SMP paid plus a further 4.5% compensation. This is deducted from the National Insurance payments made to the Inland Revenue on a monthly basis.

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Statutory Paternity Pay (SPP)

Statutory Paternity Pay allows a parent to take time off work when their baby is born. It is paid for a maximum of 2 weeks, which must be taken consecutively, to employees who satisfy the qualifying conditions.

From 6th April 2006, the weekly rate of SPP is the lower of £108.85 or 90% of the employee's average weekly earnings.

All employers are entitled to recover 92% of any SPP paid. If you qualify for Small Employer's Relief, from 6th April 2006 you are entitled to recover 100% of SSP paid plus a further 4.5% compensation. This is deducted from the national insurance payments made to the Inland Revenue on a monthly basis.

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Student Loans

The Inland Revenue will advise employers of any employees who have student loans to be deducted from their salaries. The amount of the deduction depends on the salary being paid to the employee. Currently this is calculated at 9% on any earnings over £15,000 per annum. This is remitted to the Inland Revenue as part of the tax paid over on a monthly basis.

Emergency Coding

From 6th April 2006 the emergency tax code is 503L.