As taxpayer records are moved to one database employers may receive new or amended National Insurance numbers for some employees. HM Revenue & Customs (HMRC) is urging employers not to delay sending their year-end returns as a result.

During 2008 the taxpayer records will be moved from the Computerisation of PAYE (COP) system to the National Insurance Recording Systems (NIRS). When COP was introduced the number of taxpayer records that needed to be held meant that those records had to be split into 12 regional databases. Consequently not all tax offices were able to see all taxpayer records, only those pertinent to the PAYE schemes within their part of the database.

Now that technology has moved on it is possible for the complete NI and tax records for each employee to be held together and viewed in their entirety by all tax offices. In order to complete the move to the new PAYE Service HMRC will need to match records by National Insurance number, that being the common identifier on both systems. When a cross check is run it is expected some 400,000 new/amended numbers will need to be issued to employers.

The new numbers will be issued individually on P46(T) forms. Sadly they cannot be sent electronically nor brigaded together so that all output for one PAYE scheme is sent together. While it is vital that the NINOs held on payroll systems are updated HMRC have asked that employers do not delay the sending of year end returns in order to complete this exercise.

The Border and Immigration Agency has produced summary guidance for employers about the new rules on the checking of the right to work for all new recruits that comes into effect on 29 February 2008.

All employees recruited from that date must be able to produce documents from one of two prescribed lists – List A and List B. Employers need to familiarise themselves with these new lists as they have been updated since May 2004 when the rules last changed with the accession of 10 countries to the European Union.

Documents from List B relate to those who have limited leave to remain in the UK. It follows therefore that employers are required to re-check documentation for any employees supplying documents from List B every 12 months from the date of the first check, until the employee is able to produce a document from List A or they leave employment. The current checking rules apply to those taken on before 29 February 2008.

You should be aware that if you take over the records for any employees as a result of a merger or acquisition under a TUPE arrangement (Transfer of Undertaking, Protection of Employment) you have 28 days to obtain the checked documents relating to these employees or to carry out new checks. After this point you could be
liable for the new civil penalty for employing an illegal worker.

The new penalty is set at a maximum of £10,000 for each illegal worker found to be employed for which the employer can provide no ‘statutory excuse’, in other words that they had carried out the specified checks and in good faith believed the documents to be authentic in providing the right to work.

The guidance is available at http://www.bia.homeoffice.gov.uk/sitecontent/
documents/employersand sponsors/guidancefrom290208/

Employers who still receive a payslip booklet for their monthly/quarterly remittances of tax and NICs to HM Revenue & Customs (HMRC) will see a change for the new tax year.

The payslips in the 2008/09 booklets have been amended so that there is only one ‘amount due’ box, which should be used to show the combined total of tax and NICs that is being paid.

Employers who are concerned that HMRC’s formula for allocating the payment between tax and NICs will not result in the correct split as determined by their payroll records can of course make two electronic payments of tax and NICs. Where separate payments are to be made the amount for tax is accompanied by the Accounts Office Reference prefixed by a ‘P’ whilst the amount for NICs is prefixed by an ‘N’.

Where employers have a nil payment to make HMRC prefer that this is notified online at http://www.hmrc.gov.uk/howtopay/paye_nil.htm.