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14th Annual HR & Payroll Conference 2008 - 5 March to 8 March 2008
Here are some details of our 14th Annual HR & Payroll Conference 2008, to be held at 18th Century Heythrop Park Hotel, Golf & Country Club, at Enstone near Chipping Norton, Oxfordshire, on the edge of the Cotswolds.
(For you X-Factor fans it was where the recent boot-camp was held for the 200 or so 'hopefuls' - we were considering renaming the Conference the 'taX-Factor')
The dates are Wednesday 5th March to Saturday 8th March 2008 but see please see page 6 of the downloadable PDF brochure for three different options.
Included in Conference price:
- 48 different workshop modules to choose from
- 4 key plenary sessions
- 12 key modules repeated
- 3 breakfast discussion groups
- 'by request' and 'one-to-one' sessions
- 3 nights accommodation
- Breakfast, lunch and evening meal
- Friday evening 'end of conference ball'
- Use of leisure facilities
We look forward to welcoming both new and past attendees to what is regarded by many as 'simply the best' conference for HR and Payroll.
For downloadable PDF brochure and booking form:
http://www.hrdps.co.uk/conference2008.pdf |
News Items – at 25th January 2008
Included in the 2007 Budget Report was an announcement of a review of the residence and domicile rules. Among the proposals was a change to the way in which residence status for UK tax purposes is determined. Currently, the day on which a person arrives in the UK or leaves the UK does not count towards the 183 days presence in the UK that are used to decide whether or not the person is resident in the UK for UK tax purposes. (Income Tax Act 2007, section 832)
HMRC has published draft Finance Bill legislation and guidance that explain the new rule that is intended to come into force from 6 April 2008. In deciding whether a person has spent less than 183 days in the UK for residence purposes, days of arrival in and departure from the UK will have to be included. This includes a day on which a person both arrives in and departs from the UK, unless the person is a passenger in transit, i.e. remains in a part of an airport or port that is not accessible to members of the public in the period between the arrival and departure.
Other provisions in the draft Regulations relate to the introduction of a £30,000 charge for persons who choose to use the remittance basis for the taxation of their foreign earnings. However, this is a self-assessment matter, not a payroll/PAYE matter.
The draft Regulations are still subject to Parliamentary approval and the measures could, in principle, change from those described above.
Further information:
Residence and Domicile Review http://www.hmrc.gov.uk/pbr2007/pbrn18.pdf
Draft Finance Bill legislation http://www.hmrc.gov.uk/cnr/res-dom-legislation.pdf
Explanatory notes http://www.hmrc.gov.uk/cnr/res-dom-explan-notes.pdf
FAQs http://www.hmrc.gov.uk/cnr/res-dom-faqs.htm
The Border and Immigration Agency (BIA) has published general guidance on the new rules that employers must follow when recruiting from 29 February 2008. In order to provide themselves with a “statutory excuse” and thereby avoiding the possibility of a penalty or even imprisonment for employing an illegal immigrant, employers must carry out document checks prior to the start of employment. Information is also provided about the “Employer Checking Service” offered by BIA to help employers who are uncertain about the validity of documents presented.
A comprehensive guidance booklet is also being prepared.
Further information:
Preventing Illegal Working – Summary Guidance for Employers http://www.bia.homeoffice.gov.uk/sitecontent/documents/employer
sandsponsors/guidancefrom290208/
Payroll deadlines during the next month
February 2 – This is the date by which any changes to the provision of company cars in the three months to January 5 must be reported using form P46(Car).
February 5 – This is the final day of tax month 10. Tax and NICs etc. for payments made in the tax month to February 5 are due for payment to the Accounts Office by February 19, or by February 22 if paid electronically.
February 19 – For employers required to pay tax and NICs etc to the Accounts Office monthly, this is the deadline for payment to be received by the Accounts Office, unless made electronically.
February 22 – For employers required to pay tax and NICs to the Accounts Office monthly, this is the deadline for electronic payments to be cleared into the HMRC bank account. Payments through BACS must be initiated by February 20 at the latest.
Payroll FAQ's
Pay Periods and Earnings Periods
Pay period
The term “pay period” does not appear, as might be expected, in the income tax legislation. The term appears frequently in employment and social security legislation in the context of maternity, paternity and adoption pay periods, e.g. “maternity pay period”. It is used once in the Social Security (Contributions) Regulations 2001 in connection with the pay of mariners. It is also used in the stakeholder pension and student loan legislation, but is not defined. The term “normal pay period” is used in the employment and trade union legislation in the context of tribunal awards for the continuation of an employment contract, and it is also not defined.
The only definition of “pay period” appears in the social security legislation for jobseeker’s allowance, disability working allowance and family credit. It is defined as “the period in respect of which a claimant is, or expects to be, normally paid by his employer, being a week, a fortnight, four weeks, a month or other longer or shorter period as the case may be”.
The common term “pay frequency” is not used anywhere in legislation. Instead, the Income Tax (Pay As You Earn) Regulations 2003 refer to employees having a “payment interval”, for example, “weekly”, “monthly”, in “regular intervals which are multiples of a week”, in “regular intervals which are fractions or multiples of a month”,or some other regular or irregular pay interval.
For the purposes of this discussion, we will use the term “pay period” to denote the period indicated by the employee’s “payment interval”, e.g. a week, a fortnight, four weeks, a month, etc.
The length of an employee’s pay period is used to determine the amount of the employee’s pay on each payday that is “free pay”, i.e. not liable for income tax, as indicated by the employee’s tax code.
(For completeness, it must be added that the PAYE Regulations use the term “payment period” in the context of a number of different but specific situations, e.g. where a payment is made to an employee on a day other than the employee’s normal payday, where it refers to the tax week or tax month in which a payment is made.)
Earnings period
The term “earnings period” is used only in social security legislation, in the context of the calculation of earnings-related (Class 1) National Insurance contributions. For employees who are paid at regular intervals, the first earnings period in a tax year starts on the first day of the tax year and each subsequent earnings period starts on the day immediately following the previous period. Class 1 NICs are calculated on all of the earnings paid to an employee in the employee’s earnings period.
This means that an employee’s “earnings period” is not necessarily the same as the employee’s “pay period”. However, the distinction between the two is usually only relevant where more than one payment is made to an employee in the same earnings period. As that situation does not apply to most employees, the dates on which an employee’s earnings period start and end are not important – the NICs on the earnings for the pay period are calculated at the same time as the tax.
However, the actual period covered by the earnings period is critical when
- an employer makes two or more payments to an employee at different pay intervals, or
- an employee’s payment interval changes to a longer period, e.g. weekly to monthly.
In the first of these situations, the Regulations provide rather complex rules to decide which of the pay intervals is used to determine the employee’s earnings period.
Example – two jobs with the same employer
An employee is paid on the 20th of each month for work performed in that calendar month. The employee has another job with the same employer and is paid weekly each Friday for work done up to the previous Saturday. Because the earnings from the monthly job are contracted-out in a COSR pension scheme, the earnings period for NICs, as specified in regulations, is one month. The earnings during June and July 2008 are as follows:
6 June - £150 27 June - £150 20 July - £1500
13 June - £150 4 July - £150 25 July - £150
20 June - £1500 11 July - £150 1 August - £150
20 June - £150 18 July - £150
(a) The employee’s pay period in the weekly-paid job is one week, the period from Sunday to Saturday preceding the payday.
(b) The employee’s pay period in the monthly-paid job is one month, the period from the first day to the last day of the calendar month.
(c) The employee’s weekly payday is Friday of each week. This date determines the tax week that must be used for PAYE purposes. Tax is deducted from the weekly earnings but, because the earnings period is a month, no NICs are calculated.
(d) The employee’s monthly payday is the 20th. This date determines the tax month that must be used for PAYE purposes.
(e) According to the rules for aggregation of earnings for NICs, the employee’s earnings period is a period of one month. A regular earnings period of one month starts on the 6th of each month. In the month from 6 June to 5 July, the employee received earnings of £750 in the weekly employment, and £1500 in the monthly employment. NICs are due on £2250.
Example – change from weekly to monthly pay
An employee starts a new monthly-paid job with the same employer on 11 August 2008 and is paid for the period between the 11th and the end of the month on 29 August. The last two payments for the previous weekly-paid job are paid on 1 August and 8 August.
The earnings period in which the monthly payment on 29 August is paid runs from 6 August to 5 September. The weekly payment on 8 August is also paid in that earnings period. The total NICs due for the earnings period is based on the total pay for the two payments.
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