Payroll Changes - Minimum Wage & Penalties Oct 2014

- Monday, October 13, 2014

Annual Parties – tax benefitWell this October 2014 there are a few payroll changes that will impact small businesses and worth you being aware of.

Increase in National minimum wage from 1st October 2014

  • Over 21 – £6.50 p/h
  • 8-20 – £5.13 p/h
  • 16-17 – £3.79 p/h
  • Apprentice – £2.73 p/h

PAYE late filing penalties

The biggest change is the introduction of the PAYE late filing penalties. From 6th October all employers with 10 or more employees and all new businesses set-up for PAYE in the 2014-15 tax year must be up to date with their RTI submissions, as from this date and after the first late submission in a tax year, each subsequent late submission will be charged as follows:

  • 1-9 employees – £100 – This is not being enforced until 5 March 2015
  • 10-49 employees – £200
  • 50-249 employees – £300
  • 250+ employees – £400

The following daily interest rate charges will also be applied to all outstanding employer payments not paid in full and on time:

  • 1-3 late submissions will be charged as 1% of the last estimated monetary value
  • 4-6 late submissions will be charged as 2% of the last estimated monetary value
  • 7-9 late submissions will be charged as 3% of the late estimated monetary value
  • 10 or more late submissions will be charged as 4% of the late estimated monetary value

If you have still not paid a monthly or quarterly amount in full, after six months you will have to pay a penalty of 5% of the amounts unpaid. With a further 5% penalty after 12 months. These are in addition to the penalties above and apply even if only one payment in the tax year is late.

So the best thing is to just make sure that you are on time with al your payroll submissions and payments.