Employment Bulletin
28 March 2008
Liability for tax
From 6 April 2008 HMRC will be able to transfer the liability for the immediate payment of tax to an employee rather than the employer in some circumstances.
In the normal way, the employer is responsible for deducting the tax of the employee. HMRC will chase the employer if it transpires that tax has not been deducted.
This means that if both parties have considered the relationship to be one of self-employment, and then HMRC decides otherwise, HMRC would chase the employer for the full amount of the tax regardless of any sums paid by the employee already.
This could result in double recovery of tax or in the employer being out of pocket until the situation is sorted out.
From 6 April HMRC will be able to transfer the liability to the employee in a case like this and in any event, where they chase the employer, only go for the amount outstanding giving credit for any sums already paid by the employee.
A helpful step for employers both in terms of cash flow and administration.
Increases in statutory payments
From 6 April 2008 the following changes come into effect:
- Statutory Sick Pay increases from £72.55 to £75.40.
- Statutory Maternity Pay, Statutory Paternity Pay and Statutory Adoption Pay all increase from £112.75 to £117.18.
For further information on either of these articles, please contact Mike Davies at mdavies@vwl.co.uk or on 0117 314 5336.
This publication is for guidance only. Reliance should not be placed upon it and nor should action be taken, without obtaining advice in respect of the specific circumstances applicable. We will be pleased to provide such advice or assistance.
