Payroll Year End Bulletin
There is a general uplift of all tax codes with ‘L’ suffix by 50, meaning an employee with a code of 1100L will have their tax code increased to 1150L. Tax Codes with suffix M uplift by 55 and suffix N by 45. The emergency tax code is 1150L.
The rates of tax and thresholds are:
|UK RATE||%||BANDWIDTH||SCOTTISH RATE||%||BANDWIDTH|
|Basic Rate||20||£1 to £33,500||Basic rate||20||£1 to £31,500|
|Higher rate||40||£33,501 to £150,000||Higher rate||40||£31,5001 to £150,000|
|Additional rate||45||£150,000 and above||Additional rate||45||£150,000 and above|
You will notice the different bandwidths between Scottish Rates and UK Rates. The Scottish bandwidth will apply to all employees with the ‘S’ Prefix on their tax code. A Scottish Taxpayer is determined by their place of residence. If any of your employees are unsure if their tax code is correct, they should query this with HMRC.
The Plan 1 Threshold is £17,775 and Plan 2 Threshold is £21,000. The rate of deduction above these thresholds is 9%.
The rates and thresholds for NIC are:
|Lower Earnings Limit||£113||£490||£5,876|
|Primary Threshold (PT)||£157||£680||£8,164|
|Secondary Threshold (ST)||£157||£680||£8,164|
|Upper Earnings Limit (UEL)||£866||£3,750||£45,000|
|NI CATEGORY LETTER||EARNINGS ABOVE PT AND UP TO THE UEL||BALANCE OF EARNINGS ABOVE UEL||EARNINGS ABOVE ST AND UP TO THE UEL||BALANCE OF EARNINGS ABOVE UEL|
|H (app under 25)||12%||2%||0%||13.8%|
|M (under 21)||12%||2%||13.8%|
|Z (under 21 – deferment)||2%||2%||0%0%||13.8%|
MAIN STATUTORY PAYMENTS
|Statutory Maternity Pay for the first 6 months||90% of the employee’s average earnings||SMALL EMPLOYERS RELIEF THRESHOLD||£45,000|
|Statutory Maternity Pay for the remaining weeks||£140.98 or 90% of the employee’s average weekly earnings||RECOVERY RATE FOR SMALL EMPLOYERS||100% of SMP/SPP SAP/ShPP plus 3% compensation|
|Statutory Paternity Pay/ShPP weekly rate||£140.98 or 90% of the employee’s average weekly earnings||RECOVERY RATE FOR LARGE EMPLOYERS||92%|
|Statutory Sick Pay||£89.35 full weekly rate (not recoverable)|
The employment allowance remains at £3,000 per annum. More information on eligibility can be checked at https://www.gov.uk/claim-employment-allowance.
NATIONAL MINIMUM WAGE/NATIONAL LIVING WAGE
The National Minimum Wage / Living wage now increases on 1st April, from 2017 onward.
|25 years and over||£7.50||£7.20|
|21-24 years old||£7.05||£6.95|
|18-20 years old||£5.60||£5.55|
|16-17 years old||£4.05||£4.00|
|Apprentices (under 19, or 29 and over is their 1st year of apprenticeships)||£3.50||£3.40|
If your employees are currently paid at minimum wage, we will increase their pay rate automatically from 1st April. It is important that you provide us with accurate details of your employee’s hours worked and hourly rate, so that we can ensure they are being paid correctly. If you employ apprentices, please ensure that we know they are apprentices, and that we are kept informed of their pay scale rates where they are paid in accordance with federation rules. If they are paid in accordance with the National Minimum Wage, please ensure we are informed when the 1st year of apprenticeship is completed.
PAYROLLING BENEFITS IN KIND
Currently, most employee benefits are reported via the P11d system. However, it is now possible to VOLUNTEER to have your employee benefits in kind dealt with via the payroll. If you want to volunteer to have this done via your payroll, you must register details with HMRC by 05.04.17 for year ending 05.04.18.Please contact our tax department for guidance on this matter.
The government is introducing the apprenticeship levy which is designed to help young people into apprenticeship schemes. This new tax will only apply to companies that have a wage bill more than £3 million per annum. If you employ apprentices, this may be an opportunity for you to receive funding from this scheme. More information can be found at www.gov.uk/government/publications/apprenticeship-levy-how-it-will-work/apprenticeship-levy-how-it-will-work.
GENDER PAY GAP REPORTING
New gender pay gap regulations which are due to come into force on 6 April 2017 mean that private and voluntary sector organisations employing 250 or more people as of 5 April 2017, must publish the details of their gender pay gap by 4 April 2018. Employers will need to use data from 2016/17 for the first reports which will require median and mean information relating to employee pay and bonus pay to be published; together with details of the number of men and women in each quartile of the organisation’s pay distribution.
The year 2017/18 sees the final phase of employers staging for Automatic Enrolment. If you stage for Auto Enrolment soon and you haven’t made any plans yet, please get in touch. We can provide a full end-to-end payroll and auto enrolment service, or simply assist you with the integration of your own auto enrolment solution into our payroll system.
We always endeavour to improve out processes, so with that in mind, we are offering a reduced charge for e-payslips. These are available to you at 12p per employee per payslip. This service allows you employee to have online access to their payslips and p60 form, and saves paperwork and postage. Did you know we offer a BACS payment service? We can pay your employees directly into their bank account, ensuring they are always paid on time. For more details of these services, please contact firstname.lastname@example.org.
We are committed to ensuring that we take all necessary steps to safeguard your data, so there will be a change in the way we send and receive information in the coming months. We will stop sending and receiving information containing personal and confidential data via email, instead, we will use a Client Portal which is a secure and encrypted means of communicating electronically with you. Once set up, the process will be very like the email process you follow now, simply with an added layer of security, so I am sure you will become used to this very quickly.
We will be issuing P60 forms for your employees soon, and once issued they can’t be changed. Please make sure that all employee address change details have been passed to us? This will ensure their P60 is issued with accurate details.