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Car Benefit Charge - Situations where cars are changed frequently

Summary: The existing local “averaging” procedures, agreed between employers and tax offices in order to calculate the car benefit charge for employees who change their cars very frequently, is replaced by a new, seven-step, national averaging procedure from April 2009. In August 2008, HMRC made a number of changes to its Employment Income Manual, one of which was to specify a temporary “averaging” arrangement that employers could use to calculate the car benefit charge where the car allocated to employees changes very frequently, even on a daily basis.  The arrangement does not apply, however, if the allocated car is provided for exclusive use for a predictable period of time, such as a employee whose car is changed monthly. The problem situations arise principally in the motor industry and the procedure in effect for 2008/09 allows employers to perform a single calculation for whole of the tax year by agreeing with their tax inspector
  • the price of a notional car, and
  • the CO2 emissions figure for that notional car.
The arrangement is intended solely to simplify the calculation of the car benefit charge, not to provide a lower tax charge overall than that which would otherwise apply. The announcement about this “averaging” arrangement also stated that a new, national arrangement would be introduced from 2009/10 when discussions with the various trade bodies had been completed. HMRC has now released advance copies of the pages that are to be inserted in the Employment Income Manual in order to give affected employers time to make the necessary changes from the start of the 2009/10 tax year.  The guidance covers three specific situations, namely,
  1. test and experimental cars
  2. demonstration and courtesy cars
  3. employees with frequent changes of car
Test and experimental cars The vehicles in question are cars being used for testing in a documented research programme by a manufacturer of either the car or of the specific components under test. Test engineers in both the motor industry and the components industry are often required, as part of their jobs, to test cars under various driving conditions.  For certain types of test, such as cold starting, the only practical way of conducting them is for the engineers concerned to use the cars for private journeys and to report on their performance. In law, private use of a test car results in a car benefit charge. However, HMRC accepts that no benefit charge would arise if the primary use of the car is for testing and any private use is clearly subsidiary to that testing. Note, however, the following situations:
  • If an employee does not have a company car, or has a company car for which no tax charge arises (e.g. because there is no private use), a car benefit charge would arise if the “primary use” test, above, were not met, e.g. because a test car is used for holiday travel.
  • If an employee has a taxable company car and the test car is used instead, HMRC accepts that the test car can be viewed as a replacement car, without any additional tax charge.
Demonstration and courtesy cars Where car salesmen and servicing staff are allowed to use demonstration or courtesy cars for their private use, a car benefit charge applies.  There is only one minor exception, namely where a car is taken home at night as part of a collection and delivery arrangement with a customer or for the specific purpose of calling on a prospective customer, the whole journey would be viewed as business travel and the commuting part of the journey would not be treated as private use.  However, if the employee is already liable for the car benefit charge, such a business journey does not serve to reduce the charge in any way. Employees with frequent changes of car From 6 April 2009, all local “averaging” arrangements with tax offices cease to apply.  They are replaced by new national arrangements, drawn up following consultation with relevant trade bodies, that qualifying employers may use instead of the statutory rules.  They apply to situations where there are very frequent changes of car, in particular where an employee is contractually entitled to take a car home, but not any specific car.  Such situations arise commonly in motor manufacturing, the retail car sales industry (both new and second-hand cars), car leasing businesses, daily car rental businesses and some fleet operators.  Employers in these sectors are not obliged to use these alternative non-statutory arrangements but it is expected that they will do so as they do away with the need to perform multiple calculations in order to arrive at a single car benefit charge.  However, employers not wishing to take advantage of these national arrangements must follow the statutory procedures in full. If the employer decides to use the new arrangements, individual employees may, if they prefer, choose to be taxed under the normal statutory car benefit rules.  This would involve individual car benefit charge calculations for every car provided in the tax year, the situation that the new arrangements are intended to avoid.  As the new arrangements are not intended to result in a lower or higher tax charge for the employees involved, an employee preferring to be taxed using the full statutory method will be responsible for maintaining the necessary records.  If the employer uses the new simpler method, no detailed record-keeping is required, so the record-keeping responsibility falls on the employee instead. Two arguments are sometimes put forward to support special reductions in the car benefit charge, namely:
  • that the employee does not know, from day to day, which car will be made available,
  • that, in second-hand car dealerships, only older cars can be made available.
Concessions for such situations are not possible within the legislation.  The new national averaging method is not intended to result in a lower benefit charge than would apply using the statutory method. The new averaging process has 7 steps, as follows: Step 1: Identify the cars to be averaged Each location or franchise site  records all of the cars available for private use by employees on the night of 5/6 April, i.e. immediately before the tax year starts.  They should include any such cars that are with customers at the time.  Daily rental businesses may use all of the cars in their entire fleet, regionally or nationally, that are available for private use.  It is for the employer to decide which cars are included, based on a monitored policy document.  For each car, the employer must record
  • the “price” of the car, i.e. its list price (or notional list price if it does not have a list price) and any accessories, including delivery and VAT (but not capped at £80,000 at this stage),
  • the car’s CO2 emissions figure, and
  • the fuel type.
If a car does not have a CO2 emissions figure, the following Tables apply. Step 2: Separate the cars into groups There is one rule for daily rental businesses, another for all other qualifying businesses.  Daily rental businesses already group the vehicles that they hire out for commercial reasons and those groups are used for this purpose.  All other businesses use the following Table: In the case of multi-franchise locations,
  • where employees have private use of cars from two or more different car manufacturers, each group may include car models from those different manufacturers.  Conversely, if the employees only have access to the cars of their own franchise, each franchise will have its own groups.
  • where demonstration cars are not made available to employees but cars of other manufacturers are provided instead, the cars allocated to each group are those that are actually made available for private use, not the demonstration cars.
Step 3: Calculate the average price for the notional car in each group The procedure is to
  • take the uncapped price of each car in the group
  • add the prices together and divide by the number of cars in the group
  • restrict the result to £80,000 if necessary.
Daily rental businesses perform two calculations, the first is the above calculation for each of their car groups; the second is a single average price for all of the cars counted at 5/6 April or those in the entire national or regional fleet. Step 4: Find the appropriate percentage for the notional car This is done in two stages. Step 4A:
  • add together the CO2 emission figures for all of the cars in the group, except for any without an emissions figure
  • for each diesel car in the group to which the diesel supplement applies – add 15
  • for each car that is not a qualifying low emissions car (QUALEC)
    • that is a hybrid – deduct 15
    • that is a bi-fuel (type B) – deduct 10
    • that is manufactured to run on E85 (type G) – deduct 10
  • for each car that does not have a CO2 emission figure, add in the emission figure derived from the Table at Step 1
  • divide the result by the number of cars in the group.
Step 4B: The resulting average is deemed to be the notional CO2 emission rating for a petrol car, as the adjustments for all of the other types of fuel have already been taken into consideration.  The appropriate percentage is found from the “petrol” column of the standard ready reckoner for the tax year. Step 5: Calculate the benefit charge for the notional car For the notional car in each group, multiply the average price from Step 3 by the appropriate percentage from Step 4B. Step 6: Identify the qualifying employees The employees for whom this averaging procedure may be used are those who
  • work in motor manufacturing, the new and used retail car sales industry, car leasing and daily rental businesses, and fleet operators, and
  • have the contractual right to take a car home but are not allocated a particular car.
The list is compiled by the employer on 6 April of each tax year and maintained throughout the year to reflect leavers and starters. Step 7: Allocate qualifying employees to car groups Each member of staff is allocated to one of the groups, thereby determining which cars are available to them.  The allocation may be done for each individual or for each job or grade.  The number of employees in each group may not exceed the number of cars in that group as each employee is contractually entitled to a car.  There must be a number of employees allocated to every group as all cars included are those that are available for employees’ private use. If there is only one car in a group and one qualifying employee, this averaging arrangement may still be used, even though, in practice, the price and CO2 emission figures for the notional car are, in most cases, the same as the actual car.  There is also the advantage that the employer does not need to complete a form P46(Car) when the car is changed because the notional values for that group for the year do not change. Three situations require clarification:
  • Employees joining during the year are allocated to the appropriate group from the date on which they are first entitled to use a car in that group. The employer completes a form P46(Car) for each new employee, using the details for the notional car for the allocated group.
  • When an employee leaves, the employer completes a form P46(Car) to indicate that the notional car has been withdrawn.
  • Employees who change their job during the year may move up or down a group. This does not require submission of a form P46(Car) although employers may complete a form in this situation if they wish.  The employee is shown on form P11D as having two cars available in succession during the year, with the car details relevant to each notional car reported for the period of availability.
In the case of daily rental businesses, only one grade or kind of employee is typically allowed to use a car privately and such employees are required to use a car from the lowest group available.  In this situation, each employee should be allocated to the rental business’s car group (Step 2) that has an average price that is immediately below the average for all available cars (special Step 3 calculation).  For tax purposes, they are treated as using a car from that group even though, in practice, they may use cars from higher or lower groups, as available.  However, if an employee is allowed to use any available car, the average price calculated across all of the groups (special Step 3 calculation) is used to calculate the benefit charge at Step 5. If, for whatever reason, there is no car available from the employee’s allocated car group and a car from a lower or higher group is taken home instead, the statutory “replacement car” rules are modified to apply to the situation.   No charge is made for the using the replacement car if
  • it is not materially better than the normal (i.e. notional) car, or
  • it is not made available under an arrangement of which the main purpose, or one of the main purposes, is to provide the benefit of a car that is materially better than a car of the group to which the employee is allocated.
Procedures and record-keeping Employers using the alternative national arrangements must keep the following records: Cars:
  • cars available to employees for private use on 6 April in each tax year
  • the “price” for each car, i.e. list price plus accessories, including VAT
  • the CO2 emissions figure and fuel-type of each car
  • the groups to which the cars were allocated
  • the car benefit charge for each group and how this was calculated.
Employees:
  • list of employees entitled to use those cars in the tax year
  • the group to which each employee is allocated
  • why that employee (or group of employees) was allocated to that group
  • the dates on which new employees join or current employees leave
  • any employee who changes group in a year, with the date of change.
If an employer fails to provide such records when required to do so, HMRC is entitled to recover car benefit charges and, where applicable, car fuel benefit charges on the statutory basis, for the current and past years. A form P11D must be completed and filed for each employee, using the notional values for the car or cars reported.  It would only be necessary to report more than one car if the employee were to change groups during the tax year. A form P46(Car) is only needed when an employee joins or leaves the employment.  No form is needed if an employee changes groups. Individual employees may elect to have their car benefit charge calculated using the statutory method.  See Employees with frequent changes of car, above. Car fuel benefit Employees affected by the new averaging arrangements are also liable for the car fuel benefit charge if any fuel is provided for private use. If a car dealership puts fuel in a demonstration car and an employee uses some of that fuel for personal use, the fuel benefit charge applies.  In all other situations where the averaging arrangement applies, the only way that the fuel benefit charge can be avoided is if the employee personally pays for all business and private fuel and is not reimbursed for any of it. If an employer wishes to ensure that the fuel benefit charge is reduced to nil, the employer must be able to show that the employee was required to make good the full cost of all private mileage done in the notional car and that the employee did in fact do so.  HMRC’s advisory mileage rates may be used for this purpose, in which case it would be necessary to determine the engine size band of the notional car. The fuel benefit charge is calculated using the statutory procedure, using the appropriate percentage for the notional car. Example The following example is based on that provided in  HMRC’s Employment Income Manual.  Adjustments to the procedure would be required for daily rental businesses. Further information: Car averaging: guidance for new arrangements from 6 April 2009
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Republic of Ireland: Tax Returns and Payments - Reduced frequency of tax returns and payments

During 2006 and 2007, businesses making total annual PAYE/PRSI payments of up to €28,800 became eligible to make their payments on a quarterly rather than monthly basis.  The same simplified arrangements are being extended to include newly eligible customers from 1 January 2009. Revenue is now in the course of writing to each eligible business advising them of the reduced frequency of tax returns and tax payments that will apply to them with effect from 1 January 2009.  There is no need for businesses to take any action to benefit from these changes. The letter they receive will confirm that the reduced payment and filing frequency is being automatically extended to them from 1 January 2009. Further information: Revenue eBrief No. 59/2008
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Jersey: Minimum Wage - Employment Forum recommends new minimum wage rate

On 29 October, the Employment Forum presented its minimum wage recommendation to the Social Security Minister.  If accepted, the minimum wage would rise to £6.08 per hour from 1 April 2009, an increase of 4.8 percent on the current rate. The Forum has also recommended increases in the trainee rate and in the maximum amounts that can be offset against the minimum wage where an employer provides accommodation, or accommodation and food, to an employee. These amounts will also increase by 4.8% from 1 April 2009. The Social Security Minister is expected to consider the recommendations over the coming weeks with the intention that the required legislation to bring the increases into effect will be debated by the States early in 2009. Further information: Forum recommends 2009 Minimum Wage Rate
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Cycle-to-Work Schemes - Issues raised by HMRC Benefits and Expenses Sub Group

As reported in an earlier newsletter, the minutes of the 17 April 2008 meeting of HMRC’s Benefits and Expenses Sub Group reveal that there is a potential problem for some salary sacrifice schemes if they do not satisfy all of the statutory conditions on which their respective tax or NICs exemption depend.  For example, the tax exemption that makes the “cycle-to-work” schemes possible requires that the scheme is made generally available to all employees.  If specific groups of employees are excluded from the scheme, the exemption is not met and HMRC’s view is that the salary sacrifice scheme fails, with expensive consequences for the employer. The sub-group discussed issues relating to the exclusion of employees under the age of 18, who may be excluded from the scheme because of consumer credit restrictions, and low-paid employees who are excluded because a salary sacrifice would take their earnings below the national minimum wage. As shown by recently-published minutes of a later meeting on 17 July, it was pointed out that the problem is caused by external restrictions – legislation that prevents employers from making the scheme available to certain employees.  The suggestion was  made, not by HMRC representatives, that the scheme rules could be worded so that the scheme is made available to all employees “insofar as the law provides for employers to do so”.  The HMRC representatives agreed to consider the issues further and provide some clarity in future guidance. Among the various subjects discussed at the meeting, HMRC confirmed that, where expense payments included within a dispensation are set at a particular amount. e.g. scale rate payments, the amount may be uprated annually by the employer without the need to seek HMRC's agreement, as long as the annual increase is equal to or less than the annual increase in the Retail Prices Index (RPI) for the same period. Further information: Benefits and Expenses Sub Group - Minutes of Meeting 17 July 2008
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Equal Treatment for Agency Workers - BERR publishes research findings on agency working in the UK

In preparation for consultation on the implementation of a new European Directive on temporary agency work, the Department for Business Regulation and Regulatory Reform (BERR) published on 30 October the findings of a survey on agency working conducted by Employment Market Analysis and Research, part of BERR’s Employment Relations Directorate. The main findings of the survey are:
  • The best estimate for the number of agency workers, from external business surveys of the agency sector, show there are between 1.1 and 1.5 million agency workers, although the high turnover, seasonality and flexibility of agency work make it difficult to come to a definitive figure.
  • There are an estimated 16,000 recruitment sites (branches and offices), including a number of large well-known agency businesses.  However, nearly 60% of agencies are single-site businesses with between one and five employees.
  • Compared with all employees, agency workers are more likely to work in the manufacturing, transport, and financial services sectors and less likely to work in distribution, hotels, restaurants and the public sector.
  • Agency working is concentrated in larger organisations of 50+ employees.
  • The duration of assignments is estimated to be less than three months for around 55% of agency workers surveyed who knew the length of time they had been on their current assignment.
  • Using permanent employees within their first two year of employment as comparators, agency workers had median hourly wages of £7.00, 94% of the £7.48 received by employees. (Figures in fourth quarter of 2007)
  • Agency workers are more likely to be younger, from an ethnic minority group but with broadly similar qualifications compared with all employees.
  • The more frequently listed occupations for agency workers are professional, administrative, secretarial, personal services (e.g. social carers, class room assistants and workers in hospitality) and process/plant/machine operations.
  • The survey found mixed evidence on satisfaction and well-being of agency workers, suggesting a fairly complex picture with agency workers having both positive and negative experiences.
Further information: Agency working in the UK: a review of the evidence
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Double Taxation Convention - New tax agreements with the British Virgin Islands

A tax information exchange agreement and an agreement for the avoidance of double taxation, between the governments of the United Kingdom and the British Virgin Islands, were signed in London on 29 October 2008. The agreements will enter into force as soon as both governments have completed the legislative procedures needed to give them effect. Further information: New tax agreements with the British Virgin Islands
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Working Time Directive - EU committee votes to scrap 48-hour opt-out within three years

In June 2008, the EU Employment and Social Affairs Council adopted a common position on the opt-out from the 48-hour week and on what constitutes on-call time – two contentious matters that the governments of the EU states have been arguing over since the UK’s opt-out expired in November 2003.  The compromise would allow the opt-out to continue but with new upper limits and other restrictive conditions.  The agreement was subject to the approval of the European Parliament. However, on 5 November, the Parliament’s Employment and Social Affairs Committee voted by a large majority (35 votes for, 13 against and 2 abstentions) to adopt a report that differs significantly in some respects from the Council’s agreed position.  The Committee agreed that:
  • the opt-out (officially known as the “non-participation clause”) should lapse three years after the reformed directive enters into force
  • the full period of on-call time, both the active and the inactive period, should be counted as working time
  • compensatory rest periods, where workers have been unable to take their normal rest periods, should be granted at the of the working period
  • the 48-hour working limit should apply across all jobs held by the worker and be the sum of the period of work undertaken under each contract
  • categories of worker not covered by the directive should be chief executive officers (or people in comparable positions), senior managers directly subordinated to them and persons who are directly appointed by the board of directors.
The vote on 5 November had been brought forward from the scheduled date of 2 December to allow time for informal negotiations with the Council with a view to reaching a possible compromise ahead of the plenary vote in Parliament on 17 December in Strasbourg.  An absolute majority (i.e. 393 votes in favour) is required at the plenary session to confirm the amendments proposed by the Employment Committee, or any other amendments to the Council’s common position. Further information: Limiting the maximum working week to 48 hours
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Republic of Ireland: Budget 2009 - Income tax changes limited to tax band thresholds

There are no increases for 2009 to tax credits and other reliefs, or to the rates of income tax.  The tax bands are increased as follows: Income levy A new income levy is being introduced that will apply at the rate of 1% to gross income up to €100,100 per annum or €1,925 per week.  A rate of 2% will apply to income in excess of that amount.  The levy is paid on gross income, before deductions for capital allowances or contributions to pensions. The levy does not apply to social welfare payments including contributory and non-contributory social welfare pensions. Change in the basis of Benefit-in-Kind Charge for company cars The Finance Bill will contain provisions to change the basis of the BIK charge on company cars to relate it to the cars’ level of CO2 emissions. Increase in the specified rates for preferential home loans and other loans An employee in receipt of a preferential loan is charged income tax on the difference between the interest actually paid and the amount which would have been payable at the “specified” rates of interest for the loans. To reflect changes in interest rates, the specified rate in respect of loans (other than home loans) is being increased from 13% to 15%. These changes will take effect from 1 January 2009. Cycle to work scheme From 1 January 2009, the provision of bicycles and associated safety equipment by employers to employees who agree to use the bicycles to travel to work will be treated as a tax-exempt benefit-in-kind. This tax exemption may only apply once in every 5-year period in respect of any one employee/director. There will be a limit of €1,000 on the amount of expenditure an employer can incur in respect of any one employee/director. The scheme may also be implemented via salary sacrifice arrangements, whereby an employee agrees to forego part of her or her salary to cover the costs associated with the purchase of the bicycle and associated safety equipment. Where such salary sacrifice arrangements are implemented they must be completed over a maximum period of 12 months. Levy on car parking facilities provided to employees by their employers A flat rate levy of €200 per annum will be charged on employees whose employer provides them with car parking facilities. The levy will be confined to employer provided car-parking facilities situated in the main urban centres. Further details relating to this will be announced at a later date. Pensions contribution limit The annual earnings limit for determining maximum tax-relievable contributions for pension purposes is being set at €150,000 for 2009 compared to the 2008 limit of €275,239. Further information: Budget Summary
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Preventing Illegal Working - Guidelines on tiers for skilled workers and youth mobility scheme

Applications from foreign (i.e. non-EEA or Swiss) skilled workers under Tier 2 of the new points-based system may be made from 27 November.  Also from that date, applications may be made from young people from Australia, Canada, Japan and New Zealand under Tier 5, the Youth Mobility Scheme (YMS).  Only employers that are licensed sponsors may recruit workers under Tiers 2 and 5.  Only young people from participating sponsor countries may come to the UK to work under the YMS. The existing Work Permit approach to the employment of foreign workers is being replaced during 2008 and 2009 by a new, points-based system involving five “tiers”, each of which has a number of categories of worker.  The five tiers are: Tier 1     highly skilled workers, to contribute to growth and productivity Tier 2     skilled workers with a job offer, to fill gaps in UK labour force Tier 3    low skilled workers filling specific temporary labour shortages Tier 4     students, i.e. child students attending private schools, and general students for higher education Tier 5     youth mobility and temporary workers, working primarily for non-economic objective. The UK Border Agency (UKBA) has published policy guidance documents on both Tier 2 and Tier 5 requirements for both applicants and sponsors.  These are complex, detailed documents and the notes below are only a summary of some of the key points for employers.  The process for obtaining a sponsor license is explained first. Sponsorship Applications for employment under Tiers 2 and 5 must be sponsored by a licensed employer.  Sponsorship by an educational institution is required under Tier 4 for students from abroad wishing to study in the UK, although applications for that Tier may not be made until March 2009.  Sponsorship is not required at all for Tier 1, highly-skilled workers, applications for which began to be accepted from the end of  June 2008.  Tier 3, for low-skilled workers, is not currently open for either sponsorship or applications. Before any non-EEA worker can apply for employment under Tiers 2 and 5, they must be sponsored by a licensed UK employer.  The registration fee is between £400 and £1000.  When an employer has been able to demonstrate compliance with the qualifying conditions for sponsorship, the employer’s name, location and rating is added to the register that is maintained on the UKBA website.  When fully licensed, a sponsoring employer is able to issue a “certificate of sponsorship” (not a paper document) for each applicant, the cost of which is £170 per applicant for Tier 2 and £10 per applicant for Tier 5.  The employer must be satisfied that the applicant has enough points to ensure acceptance of the application; otherwise the money paid for issuing the certificate is wasted. The tier-specific requirements for sponsors are covered in the sections for Tiers 2 and 5 below.  The general requirements, however, are that the employer must:
  • be a genuine organisation or sole trader operating legally in the United Kingdom
  • not be considered a threat to immigration control, (by examination of the history and background of the organisation and its key personnel)
  • nominate a level 1 user, a key contact and an authorising officer
  • must be able to comply with the defined sponsor duties
  • provide all of the defined supporting documents when applying for sponsorship.
Five areas of an employer’s HR systems (procedural, not computer) are assessed, i.e. Area 1: monitoring immigration status and preventing illegal employment Area 2: maintaining migrant contact details Area 3: record-keeping Area 4: migrant tracking and monitoring Area 5: recruitment practices and professional accreditations. Assessment is carried out on-site, during a pre-licensing visit.  In each of these five areas, the employer’s systems and compliance are rated 1 to 3, depending on whether the employer is fully compliant (1), partially compliant (2), or not compliant at all (3).  A rating of A or B is then given, depending on
  • whether these support systems will ensure that all of the employer’s sponsorship duties can be met, and
  • whether the employer is complying with, or has previously complied with, the former work permit arrangements and other immigration law.
Employers with top ratings for both HR systems and compliance are given an “A” rating; if one or both are rated 2, a “B” rating is given.  The rating is published in the register of licensed sponsors.  Employers with a “B” rating are required to improve by complying with an action plan, at the risk of the license being withdrawn. Tier 2 – Skilled workers Applicants Before applying, applicants must have both a sponsor and a current “certificate of sponsorship” issued by that sponsor.   There are four categories of worker:
  • General – for people coming to the UK who already have a job offer to fill a gap that cannot be filled by a settled worker. This category is also for applicants coming to fill shortage occupations.
  • Intra-company Transfers - for employees of multi-national companies who are being transferred by an overseas employer to a skilled job in a UK-based branch of the organisation.
  • Sportsperson - for elite sportspeople and coaches whose employment will make a significant contribution to the development of their sport at the highest level.
  • Ministers of Religion – for people coming to fill a vacancy as a Minister of Religion, Missionary, or Member of a Religious Order.
Applicants for work in the “general” category must score:
  • at least 50 points for attributes, i.e. sponsorship, qualifications and prospective earnings, and
  • 10 points for English language, and
  • 10 points for maintenance (i.e. funds).
The requirements are similar for the other Tier 2 categories. An interactive points-based calculator is available on the UKBA website so that prospective applicants can find out if they will have enough points to make an application that is likely to be successful. Sponsors The duties of a sponsor with reference to applicants and those actually engaged include:
  • record keeping duties include keeping copies of the applicant’s passport or UK immigration status document, and contact details
  • informing UKBA if
    • a sponsored migrant does not turn up for the first day of work
    • a sponsored migrant is absent from work for more than 10 working days, without the sponsor’s reasonably granted permission
    • a sponsored migrant’s period of engagement (including where the migrant resigns or is dismissed) or if any registration needed to work in the UK (such as with a governing body) is ended
    • the sponsor stops sponsoring the migrant for any other reason (e.g. the migrant moves into an immigration route that does not require a sponsor)
    • there are any significant changes in the migrant’s circumstances, e.g. a change of job or salary (but not job title or annual pay rise)
    • the sponsor has any information that suggests that a migrant is breaching the conditions of working in the UK
  • informing the police if the sponsor has any information that suggests that the migrant may be engaging in terrorism or other criminal activity.
Tier 5 – Youth mobility and temporary workers Before applying, applicants must have both a sponsor and a current “certificate of sponsorship” issued by that sponsor.   Tier 5 covers young migrants coming from sponsoring countries for work experience and, in addition, five categories of temporary worker:
  • Creative and sporting: for creative artists, sports persons and entertainers working on short term contracts/engagements in the UK
  • Religious workers: for visiting religious workers with a non-pastoral role to take up temporary service in their faith community in the UK
  • Charity workers: for workers undertaking unpaid work for a charitable sponsor in the UK
  • Government authorised exchange: for migrants on short-term exchange to gain knowledge and best practice in the UK
  • International agreement: for migrants who are legally entitled under international law to work in the UK for a limited period of time.
Applicants for work in the “youth mobility” category must score:
  • 30 points for being a citizen of a participating country
  • 10 points for being between 18 and 31
  • 10 points for maintenance (i.e. funds).
Applicants for work in the “creative and sporting” category must score:
  • 30 points for sponsorship by a sporting body, sports club etc, and
  • 10 points for maintenance (i.e. funds).
The requirements are similar for the other Tier 5 temporary worker categories. An interactive points-based calculator is available on the UKBA website so that prospective applicants can find out if they will have enough points to make an application that is likely to be successful. Tier 4 – Students Applications under Tier 4 will be accepted from students from March 2009 onwards.  Applications for sponsor licenses from colleges and universities may be made already. There are two categories of student:
  • Child student: for children between the ages of and 16 to attend an independent school
  • General student: for young people attending college or university from age 16.
Further information: Tier 2 of the Points Based System – Policy Guidance Tier 5 (Youth Mobility Scheme) of the Points Based System Policy Guidance Guidance for sponsor applications - Tiers 2, 4 and 5 Points-based calculator Sponsorship under the points-based system How do I sponsor a migrant? Register of sponsors Roll-out of new rules for foreign students
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Statutory Payments Consultation Group - Minutes of July 2008 meeting published

HMRC has published the minutes of the Statutory Payments Consultation Group meeting of 3 July 2008.  Among the matters discussed are the following points of interest:
  • Statutory Payments Helpbooks are to be renamed.  For example, instead of “What to do if your employee is sick”, the E14 will be called “Employer Helpbook for Statutory Sick Pay”.
  • Model letters may be provided in booklet E14 that employers could use to notify employees that they do not qualify for SSP where the exclusion reason is not one of those listed on form SSP1.
  • A revised Medical Statement (Med3), which will help GPs provide employers with better back-to-work advice and advice on when SSP can stop, is expected to come into use some time in 2009.
Further information: Statutory Payments Consultation Group Meeting Thursday 3 July 2008
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