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Every year in April, we're informed by the Chancellor of the moment about all the tax and NI changes we are going to have to make. This would usually closely followed by a Krypton Factor like dash to put all the changes in place before the May deadline comes around. It's part of the business you learn to prepare yourself for and eventually just get used to.

This year it's different, with the changes already announced in the pre-budget report, we already know what we have to do, and the stress of April has almost disappeared.

Unfortunately the rest of the changes aren't as rosy, true there is a larger than usual increase in the personal allowance (£6035 increasing to £6475 for those on a standard tax code), but that is down to the high rate of inflation in September rather than any real windfall.

The main piece of bad news comes in the form of an NI increase, it's just a rather underhanded way for the government to tax the higher earners. NI will now be at 11% right up to where the higher rate of tax starts at £844 (called the Upper Earnings Level or UEL), from there it will switch to the 1% it does currently at £770 (which will now be called the Upper Accrual Point or UAP).

Another big change (although this is soley to the admin side of things) is that bigger companies (such as ourselves) will now be able to submit P45s to HMRC online (which we do already) and so will finally be to print off their own P45s. It's a minor thing, but one that I am sure is going to cause confusion, initially with smaller firms unsure if the new method is legitimate. Ultimately it should be a welcome streamlining process, even if they are just black, white and A4 in size.

Sorry for the technical babbling on a Friday afternoon, but I thought it would be better to keep you informed sooner rather than later. Anyway have a great weekend, and speak to you next week.

Hugo
16/01/2009