Tax credit relief for employers
Good news! If you have any employees receiving Working Tax Credit (WTC) through the payroll, you’ll know how much extra paperwork that involves. Well, the good news is that between November 2005 and April 2006, payment of WTC by employers is being phased out and your employees will start to receive their claims directly from the Taxman. So over the next few months, expect to receive “Stop notices” for employees asking you to stop paying WTC to them.
But more paperwork! Before November 7, 2005, you have to write a letter to all your employees that currently receive WTC through the payroll to let them know about the changes; if you don’t, you could end up with a penalty of £300, plus £60 a day. You must use certain text in the letter and this can be downloaded from the Taxman’s website (http://www.hmrc.gov.uk/employers/pve-mailshot.rtf).
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