New company car fuel rates

Even though the government is in recess and most of UK plc has gone abroad to escape the appalling weather don't be lulled into thinking that the nothing changes until the autumn in the world of HM Revenue & Customs (HMRC).

From 1 August new advisory fuel rates for company car drivers come into force.

These affect journeys undertaken on or after 1 August.

As the rates are increasing this time there is no danger of incurring a benefit-in-kind charge on behalf of your employees by continuing to pay the old rates as there was when the rates dropped with two days' notice in February. Rather, I would guess that you will incur the wrath of your employees if you aren't seen to react quickly!

The new rates are as follows, with the February rates in in brackets:

Engine size Petrol Diesel LPG
Up to and including 1400 cc 10p (9p) 10p (9p) 6p (6p)
1401cc - 2000cc 13p (11p) 10p (9p) 8p (7p)
Over 2000cc 18p (16p) 13p (12p) 10p (10p)


HMRC commit to amend the rates only where there are fuel price fluctuations of
more than 10%. The rates can also be used for VAT purposes as long as the
relevant receipts are retained.

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NIC refunds - details at last

Back in January the Paymaster General bowed to pressure and announced that HM Revenue & Customs (HMRC) would consider refunding any Class 2 or Class 3 NICs that had been paid voluntarily after 25 May 2006.

This was the date that the government announced that in future the number of NIC qualifying years needed to receive a full state pension would be reduced to 30.

Given that there was only a passing reference to this potential change in pension policy on the 2004/05 NI Deficiency Notices (received last autumn), it was argued that HMRC had encouraged individuals to make voluntary contributions to bolster their NI record under false pretences.

Details have now been published of the refund process, which is not automatic of course and requires an application.

Refunds will be made to those who apply and meet the following conditions:

  • they reach state pension age on or after 6 April 2010 (the 30 year limit can't apply to those any younger);
  • they paid voluntary NI contributions on or after 25 May 2006 but before the Pension Bill received Royal Assent on 26 July 2007; and
  • they had not received information about the pension changes at the time they made the payment of NICs.

Application forms are available from www.hmrc.gov.uk/nic/vc3-important.htm.

Appendix 1 is for those who paid Class 2 voluntary NICs, Appendix 2 for Class 3 and Appendix 3 for those living abroad who paid either Class 2 or Class 3. Individuals abroad can receive a direct debit payment, individuals in the UK only a cheque – goodness knows why when direct debits are so much cheaper and this is public money.

The tone of the application form implies that strenuous efforts will be made to refuse refunds – is this why the announcement was so delayed and the refunds' guidance has taken another six months to emerge?

If you are advising employees to make a refund claim they should be told to be very careful when completing the part of the form headed 'why do you want a refund' to ensure that they meet the refund criteria.

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Annual leave guidance just before B(ER)Reak 

It doesn't trip off the tongue like the DTI, but BERR (the Business Enterprise and Regulatory Reform) Department released a comprehensive set of FAQs on the new right to annual leave just before their own summer break.

The new right to an additional four days' leave comes into effect on 1 October 2007, with phase two in April 2009 when the eight UK bank holidays will need to be incorporated into statutory leave entitlements. At present employers need only pay for 20 days and can include bank holidays within that total.

One of the key clarifications is the statement on bank holidays and part-time workers: "Under the new regulations, time off for bank holidays should be pro-rated. Part-time workers are entitled to 4.8 weeks' holiday based on the hours a week that they work, regardless of whether they work on days on which bank holidays fall".

There is also very useful guidance on the tricky issue of what to do when two Easters fall in the same holiday year (30 days' holiday) followed by a year with no Easters (26 days).

Nationwide employers should be aware that the Northern Ireland Assembly has just confirmed that they have bowed to pressure to have UK-wide consistency and will adopt the same maximum of 28 days even though there are 10 bank holidays in the province which would have led to a 30 day maximum. They will keep the situation under review with respect to the introduction of the additional two days at a later date.

The BERR guidance can be found at www.dti.gov.uk/employment/holidays/faq/index.html and is also on the business link website.

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VAT invoicing change delayed

HM Revenue & Customs (HMRC) are required to make some changes to the way that VAT invoices are prepared following a ruling by the European Commission.

These were due to come into effect on 1 August, but HMRC Brief 51/07 now
confirms that the amending regulations that were laid on 23rd July will
come into effect on 1 October 2007.

The changes include the requirement to use sequential numbers on invoices.
Further details can be found on VAT information sheet 10/2007 available from
www.hmrc.gov.uk/briefs/vat/brief1007.htm.

HMRC have also recently issued new guidance on electronic invoicing in the
round - click here for more information.

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Payroll Solutions at your fingertips

Now in its 16th year, Softworld HR & Payroll Solutions 17 & 18 October, NEC Birmingham offers visitors an ideal opportunity to see the latest solutions for the different aspects of HR and payroll in action.

While the free masterclasses and seminars cover the latest issues in payroll including performance management, employment updates, payroll continuity planning and guidelines on successful integration.

With over 30 leading HR and payroll software and e-business specialists under one roof, this is a great opportunity to test and compare the latest products on the market and discover powerful solutions that will streamline your payroll functions.

Current exhibitors include Snowdrop, KCS RightSource, Knight Business Forms, TeamSpirit and many more. A number of our exhibitors will be running seminars across the two-days, offering you the opportunity to hear first hand about their latest products and enabling you to discuss your business requirements face-to-face.

The independent masterclass programme is a series of seminars and is an extremely popular feature of the show.  These free to attend sessions not only allow visitors to update their knowledge on the key payroll issues, but most importantly provide them with invaluable knowledge and tips from practitioners on how to select and implement a technology solution.

You can register for the show for free and view the full programme with information about each session and all the speakers at www.softworld.co.uk/hrp.

All pre-registered visitors to Softworld will receive a free Softworld HR & Payroll Solutions buyers’ guide packed with product information, market overviews, white papers, case studies and full product listings.

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