Changes to the National Minimum Wage from 6 April 2009

The National Minimum Wage (NMW) rules have been with us for some years and require minimum rates of pay for certain workers. The government is now getting tough with those who do not pay the NMW.

From 6 April 2009, a new automatic penalty will be raised on employers where HMRC find NMW arrears. Penalties will range from £100 to £5,000 in addition to any arrears of pay owed to the workers. The most serious cases could lead to a criminal sentence or an unlimited fine.

Several changes are also being made to the powers of investigating officers such as the ability to remove NMW records from an employer’s premises.

To read more about the NMW rules please see the links below.

Internet links: HMRC – National Mimimum Wage

Beneficial Loan Rate

HMRC have announced a reduction in the beneficial loan rate of interest from 6.25% to 4.75% from 1 March 2009.  This is the rate of interest which is used to calculate the value of the benefit provided to employees where they receive a cheap or interest free loan from their employer.

This loan interest, along with other benefits and expenses provided to employees, should be reported to HMRC on a form P11D.

Please do get in touch if you require help with the completion of these forms which are completed on a tax year basis.

Internet link: HMRC guidance

Marks & Spencer VAT Win

Marks and Spencer (M&S) won a landmark victory last year in the European Court of Justice (ECJ). The case concerned whether or not HMRC were correct to limit the amount of VAT they repaid to the company after their chocolate teacakes were reclassified as a cake rather than a chocolate biscuit.  The issue of cakes and chocolate biscuits is an important one as cakes are zero rated rather than standard rated.  The case dates back many years.

HMRC only repaid M&S 10% of the output tax it had overpaid on sales of chocolate teacakes on the grounds that the other 90% had been suffered by the customer and so M&S would be ‘unduly enriched’ if it was all repaid.  The ECJ ruled in favour of M&S and the case was referred back to the House of Lords.

The House of Lords has now confirmed that HMRC will not contest this issue further and that M&S are due their refund. This opens the way for other claims of this nature. If you think that this case may have implications for your business, please do get in touch with us.

Internet links: Parliamentary judgment Times online article

Business Payment Support Services

According to Government figures, over 60,000 businesses have agreed time to pay tax arrangements with HMRC which total more than one billion pounds.

The Business Payment Support Service, which was introduced last autumn, provides a ‘fast track’ service that offers support to those needing more time to pay their tax bills. Terms can be quickly agreed over the phone.

The Right Honourable Stephen Timms, Financial Secretary to the Treasury, said:

“I’m delighted that HMRC’s Business Payment Support Service is proving such a huge success, already providing a cashflow boost worth over a billion pounds to UK businesses.

This service is delivering the kind of tangible support that business needs at this time. I would urge any business anticipating or experiencing difficulties paying their tax to call the helpline and get a quick response tailored to their specific needs.”

If you would like to discuss the Support Service in relation to your own tax affairs, please feel free to contact us.

Internet link:  News Direct press release

HMRC Warn of latest Fraud Attempt

April 2009

HMRC are warning taxpayers of the latest fraud attempt to be reported to them.

Taxpayers are being sent an email asking them to ‘update your account to the new EV SSL certification’.  HMRC are warning that this is a scam email which is attempting to steal User IDs and Passwords. The email is being sent from

HMRC advise that you should never disclose personal information such as User IDs or Passwords and that anyone receiving a suspicious email should forward it to

Internet link: HMRC guidance on security fraud attempts Example email