Some 40 million individuals under the age of 65 will see their tax code change this month with basic rate taxpayers becoming £120 better off a year.

With the basic personal allowance for 2008/09 increasing by £600 to £6,035 and the basic rate tax band reducing to £34,800, those earning up to £40,835 will see an extra £10 in their monthly pay packet. As this will be backdated for six months, taxpayers will receive an extra £60 in September. Announced by the Chancellor earlier in the year, the changes take effect from 7 September and will mean that all PAYE codes ending in L or starting in K will change.

Carole Martin, Payroll Supervisor at Keyman, the payroll division of Kent-based DSH Chartered Accountants and Business Advisors, said: “These changes are being brought in to compensate for the loss of the 10% starting rate tax band which caused a lot of concern earlier in the year. It is very important that anyone in charge of payroll ensures that the new tax codes are received from HM Revenue & Customs (HMRC) and that employees get the extra money they are entitled to.

“There is so much legislation to keep up with where payroll is concerned - including amendments to statutory sick pay and maternity pay, the minimum wage and holiday entitlement - if employers fall foul of the law then they could be liable for considerable fines or even an industrial tribunal.”
Staff at DSH will be celebrating National Payroll Week from 8-12 September, highlighting the vital part that payroll plays in the everyday lives of the UK’s workforce, in businesses and across the wider economy.

Carole Martin continued: “National Payroll Week is a chance for us to let everyone know how we can help with payroll issues. Paying staff the correct amount and on time may sound like a relatively simple task but there are serious repercussions if you get it wrong. Sometimes it is more cost effective to use an expert, whether you have one employee or hundreds.

“As well as processing payroll at a frequency that suits clients, we can complete the necessary forms for HMRC, calculate student loan deductions, salary sacrifice schemes, pensions and redundancy payments. We can also offer advice and guidance on payroll procedures, contracts, employment matters and current payroll legislation, by accessing skills and knowledge in other parts of our business.”

To find our more about DSH Chartered Accountants and Business Advisors’ payroll services call 01622 213738.