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Compulsory
pensions
National
Minimum Wage Changes
Change
in VAT rate on 4th January 2011
Change
in VAT rate on 4th January 2011
The standard rate of VAT
was increased on 4th January 2011 to 20 per cent. For any sales of
standard-rated goods or services that you make on or after 4th January
2011 you must charge VAT at the rate of 20 per cent. Detailed advice is
available from Debbie at
our office.
The compulsory VAT
registration threshold from 1 April 2011 for turnover during the previous
12 months is £73,000.
National
Minimum Wage
Changes
In the current recession
you may have been forced to freeze or even reduce wages. If your workers
are low paid you must be careful that you continue to pay at least the
national minimum wage rate (NMW).
The hourly NMW rates increased on 1 October 2011 and now apply to workers
in the following age bands:
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21 and over:
18-20:
16 and 17:
Apprentice rate:
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£6.08
£4.98
£3.68
£2.60 |
The apprentice rate applies to apprentices aged under 19, or those
aged 19 or more in the first year of their apprenticeship.
The Taxman can impose penalties of up to £5,000 if you do not pay the
statutory NMW rate, and you may even be tried in the Crown Court for
non-compliance with the NMW rate regulations, leading to an unlimited
fine. You must also pay any arrears of wages owed (for the previous 6
years), based on the current NMW rate, not the rate in force when your
employee was underpaid.
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Compulsory
Pensions
Another
set of regulations is set to fall on the shoulders of all employers. This
time it's a compulsory pension scheme for all employees.
This new pensions law is due to be introduced over four years from October
2012. The largest employers (120,000 or more employees) will be forced to
sign up first. Those who employ less than 50 workers will be required to
take part in the scheme from a date sometime in 2014 to 2016. The exact
date will depend on your PAYE reference number.
Only one-man companies will be exempt, otherwise every employer who has
workers in the UK will be required to enrol those workers in a pension
scheme. There will be exceptions for workers aged under 22, over state
retirement age or paid less than £7,475. Employees will have to take an
active decision to opt out and sign a form to do so. The employer will not
be permitted to induce employees to opt out, or to screen out potential
employees who do not wish to opt out of the pension scheme.
Employers and employees will be required to make contributions to the
pension scheme totalling 8% of the workers earnings,
including tax relief given on the employees' contributions. The employer
must contribute at least 3% of the workers' earnings. This level
of compulsory contributions will be imposed gradually over five years to
2017.
Employers can use an existing pension scheme, set up a new one, or use the
new low cost pension scheme established by the Government called NEST
(National Employment Savings Trust). Where an existing scheme is used the
employer will have to certify that it meets all the requirements for
compulsory pension saving. Every employer will also be required to
register with the pensions regulator.
To prepare for these new regulations talk to your pension scheme provider,
if you have one. If you don't have a workplace pension scheme you need to
plan to set one up as this can take sometime to implement, and to start
budgeting for the costs!
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This
newsletter deals with a number of topics which, it is hoped, will be of
general interest to clients. However, in the space available it is
impossible to mention all the points which may be relevant in individual
cases, so please contact us for personal advice on your own affairs.
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