Payroll systems will not be affected by new changes outlined in the Budget today, the IPP is pleased to announce.
In today’s Budget, the Chancellor Alistair Darling revealed notable changes in tax rates, personal allowances and pension tax relief for high earners.
The IPP has confirmed with HMRC on how these changes will be operated by employers, specifically payroll.
Firstly, from 2010-11 there will be an additional higher rate of 50 per cent for taxable income above £150,000. The IPP says this new ‘supertax’
What concerned the IPP was the announcement that personal allowances will be removed for those earning over £100,000, meaning all their earnings will be taxed, and also that pensions tax relief for those earning more than £150,000 will be reduced from 40 per cent to 20 per cent.
HMRC has considered the impact these changes will have on employers and in particular payroll administrators. They have confirmed that, as the changes will affect relatively few people, no extra burden will be placed on employers.
Therefore payroll systems will continue to operate as they do now i.e. operating tax codes received from HMRC, and allowing the pension contributions to be taken before deducting tax.
HMRC will be recovering any underpaid tax as a result of these changes directly from the individual.
The IPP welcomes HMRC’s actions in respect of these announcements.
For more information on the IPP, please contact:
Christian Musgrave
Redkite PR
Tel: 0113 274 9600
E-mail: christian@redkitepr.co.uk
To know more visit http://www.payrollprofession.org/
