News Bytes – UK

Tax – Gordon Brown’s cut in the basic rate of income tax, from 22% to 20%, won’t come into effect until April 2008. Next year will also see an increase to the thresholds.

Company cars – ‘Greener’ cars will pay less tax and not cost employers so much in running costs. The Vehicle Excise Duty (VED) rate for the most polluting cars (band G) is to increase to £300 in 2007/2008 and £400 in 2008/2009; the rate for low carbon cars (band B) wil decrease to £35 in 2007/2008, with that rate then frozen for the subsequent two years. The changes to VED rates this year take effect from 22nd March 2007.

New penalty scheme – The budget report also announces a new approach to penalties for incorrect tax returns and accompanying safeguards. The new approach introduces a single penalty structure for incorrect returns for income tax; corporation tax; Pay As You Earn (PAYE) and National Insurance Contributions (NICs); and VAT. It will apply to returns covering periods starting on or after 1st April 2008 and filed after 31st March 2009.

Compulsory in-year e-filling delayed – Employers have been given an extra year to prepare for compulsory in-year online filling. The requirement has been deferred from April 2008 to April 2009 for employers with 50 or more employees and from April 2010 to April 2011 for small employers, that is those with less than 50 employees. The Institute of Payroll Professionals has welcomed the delay, saying it will give employers more time to prepare for the changes and build confidence in HMRC systems.

Minimum wage to increase in October – The government has accepted the Low Pay Commission’s (LPC) recommended modest increase in the National Minimum Wage from 1st October 2007. The adult rate increases from £5.35 to £5.52 an hour, the development (18 to 21) rate from £4.45 to £4.60 and the rate for 16 to 17 year olds from £3.30 to £3.40.

Age discrimination still rife in recruitment - More than one in 10 people claim to have suffered age discrimination at work since it was made unlawful in the UK six months ago, according to research.

Two-thirds of the 1,000 workers surveyed by the Employers Forum on Age said nothing had changed in the way people were recruited, despite the regulations coming into force on 1 October 2006.

Perhaps surprisingly, it is mainly young people who feel discriminated against. More than one-quarter of 16- to 24-year-olds think age has stood in the way of them getting a job, compared with just 15% of 35- to 44-year-olds