The following Employment Tax guidance note Produced by Tolley in association with Vince Ashall provides comprehensive and up to date tax information covering:
When a new employee starts with an organisation, the employer needs to obtain several pieces of information to ensure that the employee can be paid correctly and on time.
At this stage, assume that the necessary pre-employment checks have been made. Pre-employment checks are not a direct payroll responsibility and should have been undertaken at the interview stage. These checks are to establish a prospective employee’s right to work in the UK under the Immigration, Asylum and Nationality Act 2006. See the Checking the employee’s right to work guidance note.
The basic employee details needed are:
name ― forename(s) and surname (ensure these are the right way round)
date of birth
To ensure correct payment, the payroll operator will need to know the rate of pay, together with any other allowances that may be payable. The rate of pay should be at least equal to the appropriate national minimum wage / national living wage rate. See the National minimum wage ― overview guidance note and the GOV.UK website.
Although not a mandatory item for employment law purposes, it is essential that a NINO is held for every employee. The NINO is the prime identifier used by HMRC and other government departments such as the Department for Work and Pensions (DWP). A valid NINO is in the format ‘aannnnnna’ where:
aa is a valid alphabetic prefix
nnnnnn is a six-digit number
a is a suffix letter; one of A, B, C or D
See Example 1.
Where the NINO is not known, the field should be left blank. HMRC’s systems will reject files in their entirety even if only one NINO is invalid. There used to be a ‘temporary’ NINO format, but this is no longer accepted by HMRC.
See Example 2.
Note that not all combinations of prefix letters are used. The characters D, F, I, Q, U and V are not used as either the first or second letter of a NINO prefix. Following issues in
**Free trials are only available to individuals based in the UK. We may terminate this trial at any time or decide not to give a trial, for any reason.
Access this article and thousands of others like it free for 7 days with a trial of TolleyGuidance.
Read full article
Already a subscriber? Login
The substantial shareholding exemption (SSE) provides a complete exemption from the liability to corporation tax on the gains generated from qualifying disposals of shares and interests in shares by qualifying companies. Conversely, if losses are generated by the disposal and the SSE conditions are
IntroductionUK tax must be withheld on UK payments including:•interest•royalties•rental incomeWithholding tax may be reduced under double tax treaties (DTT) or European directives, both of which may be subject to making a formal claim.This guidance note outlines the rules for UK withholding tax, and
Terminal loss relief for trade losses in the final 12 monthsTrading losses incurred by a company in the final 12 months leading up to the discontinuance of trade may be carried back for up to three years from the period beginning immediately before that 12-month period. So if the final accounting
The rent-a-room scheme was introduced in the early 1990s to encourage homeowners to take in lodgers.Fundamentally, the rent-a-room scheme is a relief which means that the rent received by an individual from a lodger (up to a prescribed limit) can be exempt from income tax. If the gross rents are
To view our latest tax guidance content, sign in to Tolley Guidance or register for a free trial.