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National Minimum Wage from 1st October 2008

The minimum wage rates from 1st October 2008 are :-

  • adults (people aged 22 and over) wage rate rises from £5.52 to £5.73 per hour
  • workers aged 18-21, wage rate rises to £4.77 an hour
  • young people 16-17, wage rate rises to £3.53 an hour

Apprentices under 19 are not entitled to the National Minimum Wage. Apprentices aged 19 or over and in the first 12 months of their apprenticeship are not entitled to the National Minimum Wage.

Personal Allowance Increase from September 2008

Changes to the income tax higher rate band and personal allowance take effect from 7th September 2008. These changes are effectively backdated to the start of the 2008/9 tax year.

The 2008/9 personal allowance limit is £6,035 – an increase of £810 on the 2007/8 tax year.

To ensure that the higher rate taxpayers don’t benefit from this increase, the higher rate tax band (40%) will now start at £34,800 – just £200 more than the 2007/8 tax year.

Update : The personal allowance for 2009/10 will be £6,475 and the higher rate tax band (40%) for 2009/10 will be £37,400.

National Minimum Wage from 1st October 2007

On 1 October 2007, the National Minimum Wage was increased from £5.35 to £5.52 per hour for workers aged 22 and over.  The rate for 18 to 21 year olds was also increased from £4.45 to £4.60 per hour and, for those aged 16 to 17 the rate was increased from £3.30 to £3.40.

H M Revenue and Customs (HMRC) are responsible for enforcing the National Minimum Wage.  During November 2007, a special programme was set up by the HMRC to target the hotel sector and employers who refuse or wilfully neglect to pay the National Minimum Wage.  HMRC have said in their Employer’s Bulletin that they intend to impose heavy fines under the National Minimum Wage Act on those employers who fail to pay.

Penalties for Failing to Comply

Heavy penalties may be imposed by HMRC on employers who fail to comply with the employee and all their statutory obligations.  Broadly speaking, it is a Statutory Offence to:

  • Not pay an employee what they are due.
  • Not providing records as required.
  • Not giving employee information required by law.
  • Not giving HMRC information formally required.

The maximum Statutory Penalty for any one offence is £3,000.  Failure to pay the National Minimum Wage is a Criminal Offence. Penalties can be expected to be higher than the Statutory Penalty.

Paternity Leave

New rules are expected to be introduced shortly to allow new mothers wishing to return to work before their child’s first birthday, to transfer all or some of the unused entitlement to the father.