The Office Concept

October 2011:

Seven Million people's tax incorrectly calculated:

I'm not sure why we're always surprised this happens. It is obvious that sometimes, people pay the wrong amount of tax. If you change jobs and don't pass on your P45, use an emergency code or have a period of unemployment you may have paid too much or too little tax. What is surprising it that it's taken HMRC until now to work it all out. They say that the average underpayment is between £500 and £600, which seems quite a lot and suggests that there must be some tax at the higher rate involved. These rebates relate to 2007-08 or earlier, so I think we can expect this to be a regular story. Employers have to submit all their new employee's information online now but I don't think that's going to improve the situation. It takes HMRC longer to deal with the online submission of Annual Returns than it used to take them to deal with the paper ones.

Minimum Wage Increase from 1st October 2011:

From 1st October, the minimum wage rates are increasing. The standard rate is increasing from £5.93 to £6.08. For the other new rates, see our minimum wage page.

September 2011:

An End to the 50p Tax Bracket?

Lib Dems did announce that they are committed to the 50p tax bracket and are focused on protecting people on low incomes, but now they are saying it could be replaced by a "Mansion Tax". Will this raise the same amount of revenue or will it result in all the "Gummers Law" mansions decaying?

August 2011:

Closure of HMRC Bank of England Accounts:

With effect from 9 August 2011 you will no longer be able to use HMRC’s Bank of England accounts. Payments made into these accounts will no longer be accepted. You may be charged a late payment penalty and interest if your payment is not received by HMRC by the agreed deadline date. You must now use the new HMRC bank account details. UPDATE: it doesn't seem that this has actually happened. When making telephone or internet payments, your bank should have the correct details for all HMRC accounts.

January 2011:

New PAYE and National Insurance Rates and Allowances from April 2011:

See my new web pages for information on the changes: www.theofficeconcept.com/2011-12.htm explains the new rates and allowances. www.theofficeconcept.com/rates&allowances2011-12.htm shows you how the changes will affect your pay and the cost of being an employer.

October 2010:

Philip Green appointed Government Property Advisor:

Top Shop founder Sir Philip Green is to lead an efficiency review of government spending, including an examination of leases and property. Green says “I believe that our shared experience in the procurement of many goods and services, across a broad geographical area of the UK, will enable us to have important benchmarked information which will be extremely useful.

“I will give this efficiency review my very best effort knowing how hugely important it is to the recovery of the country. I want to help focus, motivate and energize to achieve these efficiency savings. It is these actions that will re-start growth in the UK.”

Sir Philip's wife is a resident of Monaco, meaning that they don't pay tax on their income from their UK businesses, Top Shop and BHS which have a 12% share in the UK clothing market. He says about this, 'My wife's not a tax exile - my family do not live in the United Kingdom, it's somewhat different.' The move has saved them tens of millions of pounds in tax. He famously paid his family a £1.2 billion dividend in 2005, which they were able to receive tax free due to their Monaco residency status. If you care so much about the UK economy, Sir Green, you know what you have to do.

Child Benefit Changes:

Child Benefit to be withdrawn for higher rate tax-payers: This hasn't been very well thought out at all. Did the Con-Dem's consult anyone before announcing this? There seems to be no thought at all about the fact that some families may only have one bread-winner, for whatever reason. In the case of single families, what will happen if the father is a higher rate payer and has absconded and is already neglecting his responsibilities? In the case of unmarried co-habiting parents, will they now want to follow Ed Milliband's lead and not put the father's name on the birth certificate? Who is going to Police this and how? If they stopped benefits for families in the 50% bracket (earning over £150,000), it would make more sense. Some people don't want to take these benefits, but have no choice. We could make it easier for them to decline them.

PAYE is calculated on a retrospective basis. What if you don't know what your income is going to be in the coming tax year - are the self-employed going to suffer yet again? Will we have the same situation as we had with tax credits where you have to guess your future income and pay back any money incorrectly claimed?

My suggestion is that for children born after a certain date (in the future); we only pay child benefit for the first one or two children. People do need to consider whether or not they can afford to have children before they have them, but I don't believe that it is children who should be the first to suffer under the Con-Dem cuts.

Equality Act 2010:

It came into force on 1st October. You can download a guide from ACAS about it here:

ACAS Equality Act 2010 Guide

Employers are no longer free to ask pre-employment health questions. Under the Equality Act 2010, any medical questions asked before a job offer is made must relate specifically to the tasks involved in carrying out the role. This is potentially good news for people who feel that disclosing information about a condition or disability may weaken their chances of getting a job.

Still in 2010, disabled people are twice as likely as the able-bodied to be unemployed. Only one in 10 tribunal claims made under the Disability Discrimination Act – which the Equality Act mostly replaces – concerns recruitment, but discrimination there isn't less common – just harder to prove.

September 2010:

HMRC Announcement that millions of UK tax payers have paid the incorrect amount of PAYE over the last 2 years and will be asked to repay any shortfall: I think that this has always happened, but new advances in HMRC's technology has enabled them to send these letters out en masse for the first time. There are many reasons why a person might have paid the wrong amount of tax; if you've had more than one job, you might have claimed your full allowance twice. If you changed jobs and didn't give your new employer a P45 from your previous job, your tax could be wrong. I don't really think that HMRC need to apologise for what's happened, maybe they should have warned us that it was coming, but in theory it always could have done and did happen to some individuals. They don't want to admit that previous years PAYE could also be wrong, because the only people that will want to question how much they've paid, are the people that are due refunds and that could be costly for HMRC. Maybe they're looking into the technology to sort that out. I do hope not!