General PAYE News
Millions could have to change bank sort code under ring-fence rules 19 January 2015
Britain’s major banks have warned that new rules designed to “ring-fence” their retail operations to protect consumers could mean tens of millions of people being forced to change sort codes.
The Telegraph reports that the BBA, which lobbies on behalf on the UK's banks, said the Bank of England rules, which will force the legal separations of high street banks from investment banking operations, could disrupt payment systems if the banks are not given enough time to deal with the issue.
The group, in its submission to a consultation on the reforms, called for the Bank to finalise the rules before the expected deadline of the first half of 2016.
By 2019, banks will have had to legally separate their retail and wholesale arms, under rules designed to prevent consumers and small businesses being exposed to banks’ more volatile trading arms.
However, separate legal entities will require separate sort codes – the six-digit numbers that identify the bank and branch associated with an account.
Either the retail arm or the non-ring-fenced commercial operations will have to be set up as a new structure and thus have to use new codes.
Although banks could prevent consumers from being forced to switch by making the non-ringenced entity the new structure, this would mean the part of the bank used by large corporations changing sort codes.
Since this could also disrupt inter-company payments, and force a paperwork headache, some believe it would be less troublesome to set up the retail banking arms as new entities. The BBA said the impact would be similar to the changes seen by Lloyds customers who were switched to TSB in 2013, a process that was seen as causing minimal disruption. However, the body said the effect would be much greater.
“The scale will be much bigger and will involve several banks, increasing risk, concern about systems integrity and customer impact," it said.
"In order to deliver the reforms on time, banks, the regulatory authorities and a number of government agencies will need to pull together to avoid any bottlenecks," said BBA executive director Paul Chisnall.
"In particular we'd like the regulators to try to put in place the new regime as quickly as possible to allow banks to make final decisions about how to structure their businesses."
CIPP comment We don’t need to tell payroll professionals the headache this could cause if high volumes of sort codes need to be changed. The Policy Team will keep a close eye on developments and update you accordingly.
Finance Bill 2015 brings in new tax changes 30 March 2015
Following the Budget, the government has published Finance Bill 2015 which implements tax changes announced at Budget 2014 , Autumn Statement 2014 and Budget 2015 . It includes action by the government to support hardworking families keep more of their hard-earned money by: increasing the personal allowance by an extra £400 to £11,000 from April 2017 so that a typical rate taxpayer will be £905 better off compared to 2010, and an individual on the National Minimum Wage working up to 30 hours a week will not pay any income tax exempting children from Air Passenger Duty so that, taken together with measures introduced in Finance Act 2014, a family of four flying to Australia will save £194 The bill also contains key policies to make the UK more competitive for business, such as: supporting investment in the crucial UK oil and gas industry through cutting the Supplementary Charge by 12%, cutting the Petroleum Revenue Tax from 50% to 35% and introducing two new allowances increasing the tax credits available for large and small businesses investing in research and development a new tax relief to promote the production of children’s TV in the UK, and further support for high-end TV and film tax.
CIPP Policy News Journal
25/04/2016, Page 262 of 453
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