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Peter Arrowsmith FCA outlines a selection of NIC matters, and offers a tip concerning the state pension adult dependency increase.

Swine 'flu and SSP

The Government is considering extending the self-certification period for Statutory Sick Pay beyond seven days for a temporary period, if it becomes necessary. In that event, HM Revenue and Customs will no doubt make a suitable announcement and details can also be found now at Managing the Impact of Swine 'flu in the Workplace

Additional Paternity Leave and Pay (APL&P)

The Government has announced its intention to introduce APL&P for fathers of children due on or after 3 April 2011. Draft Regulations have been issued for consultation and are available at Open Consultations

There will be APL&P due in exceptional circumstances in 2010/11 - from around November 2010 onwards. Payroll software will be unable to handle 2010/11 payments and employers will be required to report such payments, the number of cases of which will be very small, in the Statutory Paternity Pay boxes on forms P14 and P35.

HM Revenue and Customs plans to have both guidance and an electronic calculator on its website in advance of the earliest cases arising from November 2010.

No decision has yet been made to extend Statutory Maternity Pay and Statutory Adoption Pay beyond the current entitlement of 39 weeks.

Adjudicator's Annual Report

The Adjudicator's Report covering the year ended 31 March 2009 has now been published.

Of the 1,650 HMRC cases investigated, 1,326 were regarding tax credits (80%; previous year 82%). Of the remainder, 69 were upheld (21%; previous year 25%) and 240 not upheld (74%; previous year 69%). Other cases were withdrawn or reconsidered by the Adjudicator. (37% of tax credits complaints were upheld - previous year 48%) HMRC was recommended to pay a total of £188,597 compensation and give up tax and interest of £30,427 (previous year, ,307 and 642 respectively). In addition it was suggested that 6 million of overpaid tax credits be written off - three times the amount of the previous year. HMRC accepted all of the Adjudicator's recommendations.

The Annual Report's usual variety of case reports again this year contains none concerning National Insurance contributions.

There was a significant increase in the number of non-tax credit complaints received and due to changes in the HMRC approach to tax credits complaints there was a knock-on effect at the Adjudicator's Office. This has led to an increased average investigation time of 11 months.

Parliamentary Ombudsman's Report

In the year ended 31 March 2009, the Parliamentary and Health Service Ombudsman received 2,159 complaints about HM Revenue and Customs. Of these 284 were about the Adjudicator's Office and 38 were about the National Insurance Contributions Office. Of the latter 38 cases, three were investigated and one of those complaints was upheld.

Tip of the Month - October 2009 

The state pension adult dependency increase (ADI) is being phased out from next April. Currently, an ADI may become payable where a husband is of state pension age and claims the pension and his spouse is under state pension age. Rather than the latter receiving a state pension on the spouse's contributions (and taxable on them) an ADI can be claimed (if that adult is, inter alia, not earning more than £64.30 per week - current rate) but the total amount including the ADI is all paid to and taxable on the husband. When the wife reaches state pension age, the ADI is replaced with the wife's pension in her own right (on her husband's contributions), payable to her, and taxable on her - though usually the amount is the same.

The ADI will not be available for new claims (in the case of either the underlying pension or the ADI itself where a pension is already in payment) on and after 6 April 2010. Any ADI already in payment at that time will continue until circumstances change (e.g., the spouse can claim their own pension when reaching state pension age) or until 5 April 2020 at the latest. Some husbands who have not yet claimed the state pension, but are eligible to do so, and who would be eligible for the ADI for their much younger wife will need to consider whether they should make their pension claim (to include the ADI) before 6 April 2010. A number of factors will come into play including their motives for having deferred their own pension (which will have hopefully included their respective tax positions) and also the wife's current age in relation to when she will reach her state pension age. Remember too that the state pension age for women is increasing from April 2010.

The above is taken from 'NIC Newsletter' (01/10/2009), and is reproduced with the kind permission of Peter Arrowsmith FCA, who retains the copyright.