Published Friday, 8 of April 2011

Approved mileage allowance payments
The following rates are used to calculate the maximum amount that can be exempted from tax and NICs for business miles travelled in the employee’s own vehicle.

Motor cars and vans
First 10,000 business miles* 45p per mile
Over 10,000 business miles 25p per mile
Motorcycles 24p per mile
Cycles 20p per mile

* For NICs purposes, the higher rate applies to all miles, not
only the first 10,000.

Read More...

Published Friday, 8 of April 2011

Using the new P46's form for tax year 2011-12 you will need to know what tax code to place employees on:

BOX A Ticked - 747L - Standard Personal Allowance for this year is £7,475.

Box B Ticked - 747L week 1 month 1 - Standard Personal Allowance as above. Week 1 month 1 basis is non-cumulative, which means you don't add the pay and tax to the previous weeks, or months figures of pay and tax.

Box C - OT - An 'OT' tax code indicates that yo Read More...

Published Wednesday, 6 of April 2011

PAYE Thresholds for 2011-12

The PAYE thresholds (the level of earnings at which tax becomes payable) are: £144.00 weekly, £623.00 monthly.

Tax Rates for 2011-12

Basic Rate 20% from £1 to £35,000
Higher Rate 40% from £35,001 to £150,000
Additional Rate 50% from £150,001 and above

K codes
Tax codes starting with a K have a regulatory limit of 50% of an employee’s gross pay in the pay period. This limit restricts the Read More...

Published Wednesday, 23 of March 2011

Who is likely to be affected?
Income tax payers, employers and pension providers. General description of the measure For 2012-13, legislation in Finance Bill 2012 will increase the personal allowance for those aged under 65 to £8,105 and reduce the basic rate limit to £34,370.
For 2012-13, all other income tax personal allowances and limits that are subject to indexation will be increased in li Read More...

Published Tuesday, 4 of January 2011

Where does my tax code come from?

Your tax code is issued by HMRC to your employer, so that the right amount of income tax (PAYE) that can be deducted each month from your salary.

Here are some examples of tax codes:

* 474L
* 474P, 475V, 382Y
* 384T
* K384
* BR, OT, DO, NT

Except for the last few, the majority of tax codes are a combination of numbers and letters.

The numbers are used to work out how Read More...

Published Tuesday, 14 of December 2010

As from April 2011 employers and employees are likely to see the tax code OT more frequently. The reason for this is if an employee as complete a P46 (New starter form without a P45) and ticked box 'C', they will no longer be placed on the tax code 'BR' (Basic Rate tax) but will be replaced with tax code '0T'.

An 'OT' tax code indicates that you have no personal allowances and all income is subject to basic and higher rates of tax.

Published Friday, 10 of December 2010

HM Revenue & Customs have confirmed that P46 starter forms will be changed for the year 2011/2012, so that employers can use code 0T when employers can tick a box C because they have more than a one job. It is one of the most long standing issues within payroll that the current method of using BR is not sufficient as it does not allow for the higher rate earners who need to be taxed at 40% or 50%. In most of the cases, this is the cause Read More...

Published Saturday, 13 of February 2010

HMRC recently introduced a new National Insurance and PAYE system and that we are using it to issue tax coding notices for the first time.

The transition to the new system has brought to light some discrepancies in our existing records and this is resulting in a number of incorrect Coding Notices being issued.

We have been working hard to identify situations where customers could receive an incorrect Read More...