Updates released by the IPP and the HMRC;

New £5.93 minimum wage rate and new rate for apprentices

The Government has confirmed that it has accepted the recommendations from the Low Pay Commission (LPC) on the new rates for the National Minimum Wage, as referred to in last weeks Budget. The new rates, which will come into force on 1 October 2010, will be;

• £5.93 per hour for low paid workers aged 21 and over
• £4.92 per hour for 18-20 year olds
• £3.64 per hour for 16-17 year olds

The Government also announced that it had accepted the LPC’s recommendation to introduce an apprentice minimum wage of £2.50 per hour. The new rate will apply to those apprentices who are under 19 or those that are aged 19 and over but in the first year of their apprenticeship. The Department for Business, Innovation & Skills (BIS) have updated their website with all the up to date information for employers.

Change to Student Loan Box on P46 forms

It has often been difficult for student loan borrowers to avoid over repaying their student loan as the loan term neared its end. This is because of the time delay between employers making deductions from salary each month and submitting an annual return with detail of repayments. A new initiative to help PAYE borrowers avoid this was introduced by the Student Loans Company (SLC) back in December 2009.
In the last 23 months of repayment PAYE student loan borrowers can opt out of PAYE student loan deductions and go on to a Direct Debit arrangement. Doing this means a borrower will not over repay. The SLC will try to contact borrowers shortly before this time to offer and arrange this option. However if a borrower is aware that they are reaching this point they can contact the SLC direct and arrange to repay the balance of their loan in this way. Contact details can be found on the SLC repayment website.

The form P46 wording will be amended so that only those borrowers who need to repay through their earnings, and who are not part of a direct debit arrangement, will tick the student loan box. Updated online versions of the newly worded P46 have been available from the end of January 2010 with paper copies being made available from July 2010. The handling of these forms by employers will not change.
Pension Age Rises

Minimum pension age to rise to 55 from April 2010;

The normal minimum pension age rose from 50 to 55 from 6 April 2010. After this date, people will normally only be allowed to start receiving their pension payments from an occupational or a personal pension scheme when they are 55 or older. To help you to understand the change and its effects, HMRC have prepared a few general questions and answers and a glossary of pension terms that are available on the HMRC website.