Samui Ex Servicemen's July Get Together

Tuesday, July the 29th at 4:30 pm will see the next get together of the Samui Ex-Servicemen. We will be meeting at the Elephant & Castle Restaurant and Bar in Bang Rak on Koh Samui. Any Ex-Servicemen or currently serving members of Her Majesty's Services are welcome to come along, have a few drinks, something to eat and chat about days gone by and what is happening now.

Hope to see you there.

Samui Ex-Servicemen

Work Permit Update

Here is some information for all who are working on Koh Samui regarding work permits. Hope it is of assistance.

Understanding the new work permit law

TILLEKE & GIBBINS

Most foreigners working in Thailand are well aware that they need a visa and work permit to stay and work in the country. Yet, they find the law and regulations rather complicated and difficult to comprehend, especially with immigration rules dramatically evolving in the past few years and posing a challenge to the status of many expatriates. Unfortunate expats who either lacked knowledge or failed to keep track of developments in immigration and labour laws and practices have paid a price for their oversight or negligence.

On Feb 23, 2008, the law governing work permits (Working of Aliens Act) generated much attention when it emerged to replace its 30-year-old predecessor. Although the implementation of the major part of this new law has been delayed pending the issuing of several ministerial regulations, it would be prudent for working aliens to familiarise themselves with some key changes.

The greatest point of interest is the punishment imposed on both employer and employee for an employee working without a work permit. The new Act imposes a heavy fine ranging from 2,000 to 100,000 baht upon a violating [alien] employee, significantly increased from 5,000 baht, and/or a five-year term of imprisonment, increased from three years. An employer hiring an alien without a work permit will face high fine of 10,000 to 100,000 baht, although the former three-year imprisonment has been eliminated. Labour officials are now empowered to arrest (without a warrant) any alien suspected of working without a work permit.

Depending on one's point of view, the penalties seem to be harsher for employees and lighter for employers. The new law will allow any alien worker who pleads guilty and voluntarily leaves Thailand within 30 days to be fined without a trial.

Under the new law, a work permit of up to two years may be granted instead of one year under the old law. The most welcome change is that a work permit will no longer be tied to the duration of stay that is stamped on an alien's passport. In other words, work permit holders who do not have a one-year duration of stay will not need to keep extending their work permits by leaving and returning to Thailand on a "visa run" to get a new duration of stay. Nevertheless, work permit holders will still have the duty under immigration laws to maintain a valid duration of stay while in Thailand. This new development awaits implementation in the near future.

The new work permit fee is 20,000 baht. Renewal will cost the same price. In addition, an employer applying to hire alien employees who are not deemed skilled or expert will be charged a 10,000-baht fee per alien. The Department of Employment has not applied these new fee rates as yet.

Employers or employees are no longer obligated to report to the Department of Employment and return a work permit when employment has ended. Under the old law, those who failed to comply would have to pay a fine of 1,000 baht at a police station, which was quite unnecessary and inconvenient.

Nonetheless, labour officials still encourage both parties to report the cessation of employment, otherwise their system would not permit the employee to get a new permit with another employer or the old employer to fill the vacant position.

The Immigration Bureau has reacted to this development. The usual seven-day period of stay after the cessation of work will no longer be automatic but will be granted upon request and payment of 1,900 baht. Most importantly, a further temporary stay while a new work permit application is under consideration will not be given anymore. As a result, aliens switching jobs would be compelled to process their new work permit within seven days or leave Thailand to get a new business visa from a Thai consulate.

Several provisions dedicated to a fund for sending aliens out of the Kingdom have been added. In addition to the existing personal income tax and social security withholdings, the employer will soon be obligated to contribute to the fund by withholding a certain amount from the income paid to work permit holders. The criteria and conditions relating to the contribution are to be set forth later. The fund is intended to relieve the government of the high cost of deporting guilty working aliens and illegal immigrants.

In general, the major changes in this law seem to be positive and more liberal. It is hoped that they will help resolve the enduring problems that have troubled both aliens and the Thai government in the past.

Written by Kobkit Thienpreecha, Attorney, Commercial Department, Tilleke & Gibbins International Ltd. Please send comments or suggestions to Marilyn Tinnakul at marilyn.t@tillekeandgibbins.com

Reference the Bankok Post : http://www.bangkokpost.com/180708_Business/18Jul2008_biz42.php

Samui Ex-Servicemen June Meet Up

Hope all who attended the June Samui Ex-Servicemen meet up at The Red Fox in Lamai had an enjoyable afternoon. Thanks to Alan our host for the excellent stew, a real taste of home. As usual a few topics were discussed and a few beers consumed.

If you are ever in Hong Kong, a recommendation for a cheap pint, was the Mariners Club just over the road from the Star Ferry terminal.

For July's get together it was decided to return to our original venue The Elephant and Castle in Bang Rak on the 29th July at 4:30 pm. Hope to see everybody there.

Here is some information that may be of interest to some of us:

Chancellor Alistair Darling has announced changes to the personal allowance in a bid to defuse the 10p tax row.

The move was intended to compensate the 5.3 million households who lost out when the 10p tax rate was abolished.

It will mean more money for several million people paying the basic tax rate, but administrative work for some businesses.

So how will it affect you?

How did this come about?

A series of tax changes came in at the start of the financial year, on 6 April. They had been announced in Gordon Brown's final Budget as chancellor in 2007 and in the later pre-Budget report.

The changes saw the 10% starter rate of income tax abolished, except on savings income for people who are low paid. The basic tax rate came down to 20% from 22%.

When 5.3 million people realised this meant less money in their pocket, many spoke out leading to a backbench rebellion by Labour MPs.

What changes have now been announced by the chancellor?

Alistair Darling said he wanted to compensate the people who lost out.

He is borrowing £2.7bn to raise personal tax allowance by £600 to £6,035.

This means anyone earning up to about £40,835 will gain £120 this year.

Mr Darling said 4.2 million of those households which lost out previously will receive as much or more than they lost when the 10p starting rate of tax was axed, and the remaining 1.1m households will see their loss at least halved.

The biggest losers, experts say, would be some of the very lowest earners who do not have families and do not work enough hours to claim tax credits.

What is my personal allowance?

The personal allowance means you earn a certain amount of income without paying any tax at all. Income tax starts being paid on earnings above this amount.

Personal allowances are amended each year in the Budget, and usually they go up with inflation.

In the current tax year 2008/2009 the basic personal allowance was set at £5,435 (up from £5,225 the previous year) but has now gone up by £600, a rise backdated until 6 April.

People can expect a £60 lump sum in September pay packets, followed by a £10 monthly increase until the end of the year.

The chancellor's announcement was extremely unusual as it made changes to the tax system after the Budget - a move not seen by a chancellor for around 15 years.

Won't the better off gain too?

Around 17 million middle-income earners, who did not lose out when the 10p rate was axed, will gain from what the Institute of Fiscal Studies (IFS) described as a "simple and expensive option".

Extra money for these people makes up around £2bn of the £2.7bn handout, the IFS says.

Mr Darling said he would lower the starting point at which the 40p tax band is paid by £600 to £40,835, so the most well-off would not gain more.

This will push 150,000 people into the higher 40p tax rate but the Treasury said that these people would still benefit from the extra £120 this year.

It remains to be seen what will happen next year, as all these changes are for this year only.

It also remains to be seen whether this move - which will give millions of people a little more spending power - will cut the chances of a fall in interest rates in the coming months.

What does it mean for people running small businesses?

While many low and middle income earners will gain, there are some issues to deal with for those who pay them.

Chas Roy-Chowdhury, head of taxation at the Association of Chartered Accountants, said businesses systems and processes will have to be updated halfway through the tax year in September.

"SMEs represent over 99% of UK businesses, and they will have to change their PAYE codes and tax systems," he said.

Ref: BBC News: http://news.bbc.co.uk/2/hi/business/7399105.stm