CHAMBER NEWS: The new tax year has just started and there are several aspects of payroll systems which have changed. A brief summary of some of these is as follows: l After March 31, 2006, H M Revenue and Customs will be paying all Working Tax Credits direct to claimants and therefore none should be paid by employers and reclaimed through their PAYE schemes.

l Forms P46 now include boxes for completion by employees who join you without a Form P45 to indicate whether student loan repayments should be deducted from their wages.

You need to keep an eye out for these boxes being ticked and make the required deductions and remit those to the Revenue.

You also need to ensure that if you ask an employee to sign a Form P46 that you always give him or her one of the new style forms.

I have come across several instances where employers have overlooked the appropriate box being ticked on a Form P45 for a new employee in relation to Student Loan repayments and have therefore not made the necessary deductions from a staff member's wages/salary.

l One other change that takes effect at the beginning of the tax year is that related to pension contributions following A' Day and the new pensions regime.

With effect from the start of the new tax year almost all employee contributions to pension schemes will be made net of basic rate tax i.e. if the employee wishes to contribute £10 per month gross, the deduction to be made by the employer is £7.80 per month and no further tax relief is due in respect of the premium via the PAYE system.

Even under the former regime, l have recently come across several instances where employers using payroll software have made the employee contribution deduction using the wrong section in the system which has led to, in effect, double tax relief arising. The first by the payment being made net and the second by a reduction in the PAYE adjusted.

In almost all of these instances if the employer gets it wrong it is the employer's liability to pay over to Revenue the sums which it has failed to deduct.

l Employers with over 50 employees are required again to file their Form P35 and the individual Forms P14 electronically.

Those employers with less than 50 employees can voluntarily file electronically and provided all matters are dealt with correctly, should once again receive a £250 payment or credit as an incentive from H M Revenue and Customs.

l Do not forget that the Form P35 and all of the Forms P14 have to be received by H M Revenue and Customs by May 19.

The above is for general guidance only and no action should be taken without obtaining specific advice.

Mike Michael Taylor, Pearson May Chartered Accountants Trowbridge, Warminster, Chippenham and Bath