Tax codes changes 2011/2012
  From 6 April HM Revenue and Customs plans several changes on how to operate PAYE. Find out what these alterations are to avoid facing unwanted liabilities, penalties and interest fees!1. Raise of personal allowance tax to £7475.00 (additional £1,000 comparing to 2010/2011tax year) - meaning that the coding for under 65s will change from 647L to 747L.2. Reintroduction of D1 tax code - when the new 50% additional rate of tax was introduced in April 2010, HMRC announced that its systems were unable, at that time, to handle a tax code D1 for the employees affected.  For the 2010/11 tax code, the correct liabilities for 50% tax payers will be assessed after the year end. The D1 tax code will be used where a tax payer has a second and subsequent employment income liable to tax at 50%.3. 0T code (zero allowances) instead of BR to be used for any employee who has started work but did not provide a form P45 or fill in form P46.4. 0T code also needs to be used when a payment is made to an employee after issuing the P45. In the past any additional amounts were taxed at BR. From 6 April the tax code should be change to OT code on a week 1/month 1 basis.5. Additional statutory paternity pay (ASPP) - for babies due on or after 3 April 2011 with a birth, or matched for adoption, from that date. For 2011/2012 there will be a specific field on the P14/P60 for ASPP. A good payroll operating software product will help you to ensure compliance with statutory rules and procedures. It should also do much more than just wages calculations! 1. Payslips would be produced automatically.2. You would no longer have to run complicated formulas to calculate tax and National Insurance contributions. The software would do it for you.3. Additional deductions from each employee's wages could be easily made. These may include for example, pension contributions, student loan repayments or voluntary charitable donations.4. The software should automatically calculate statutory sick pay, statutory maternity and paternity pay and holiday pay.5. The program should allow users should be able to set up their own checks to carry out each payroll cycle automatically or at year end.  Program should produce errors or warnings depending on the result of a user defined calculation.6. Generating in-depth reports on, for example, payments to multiple bank accounts and to-date totals.7. BACS payment could be made to employees in the same payroll cycle with the software automatically calculating the difference to pay.Last but definitely not least: payroll software which is combined with a good time and attendance system can give you valuable information on employee absence and lateness, allowing you to tackle your employees' absenteeism effectivelyIf you want to learn more about Mitrefinch payroll or time and attendance software, email us, go to our website or call 01904693115 today!