Changes to Minimum Wage from October the 1st

As explained in a previous blog post, Minimum Wage is defined as the lowest wage payable to most employees as fixed by law or union agreement.

As from 01/10/09 new rates came in place:

•£5.80 - as the main rate for workers aged 22 and over;
•£4.83 - the 18-21 rate;
•£3.57 - the 16-17 rate for workers above school leaving age but under 18.

A very important change from 01/10/09 is that fact that employers running bars and restaurants can no longer be allowed to use tips to top up pay up to the minimum wage.

Workers will now be paid at least the National Minimum Wage and be paid their tips on top of this.

If your employer is paying you less than the Minimum Wage entitlement you must report this by filing an online complaint form.

If you have any queries regarding Minimum Wage or any other tax related question, please feel free to ring us on 020 8761 8000 or come to see us in our office in Tulse Hill on the South Circular.

Payments on account towards 2009/10

Payments on account are normally required from any taxpayer who is assessed to income tax, of any amount, for the preceding tax year (HM Revenue and Customs).
These payments are due by the end January and July each year.
You will be asked to make two payments on account for the current tax year if the total tax due in the previous tax year is less than 80 per cent of the tax deducted at source through the Pay As You Earn system and your Self Assessment tax bill for the previous year was over £500.
Each payment on account equals half of the total tax bill that you had to pay directly to HMRC on your income for the previous tax year.
If you expect your income for the current year to be significantly different from the previous year you can ask for these payments to be adjusted. You can reduce your payments on account by filling in an additional form called SA303.
If you ask for your payments to be reduced and it turns out that you did not pay enough tax on account, you would have to pay interest on the difference from the date the payment was due.

HMRC charges interest at a variable rate, currently 2.5% since (applicable since 24/03/09).

From 6 April 2009, the threshold below which taxpayers do not need to make in-year payments on account of their annual income tax liability under the income tax self-assessment system will double from £500 to £1,000.
So if your tax liability in 08/09 is less than £1000, will not have to make instalment payments on 31 January and 31 July 2010 towards that 2009-10 liability, but will instead make a single payment on 31 January 2011.

If you would like to know more about payments on account and in what circumstances they can be reduced, Taxfile's tax agents could help.
Just drop us an email at info@taxfile.co.uk or ring us on 020 8761 8000.
Alternatively, you could pop in to see us at our office in Tulse Hill on the South Circular.