Today marks the start of the new tax year. Our payroll update offers a quick reference to changes for the year ahead.
1 – National Minimum and Living Wage Increases
With National Minimum Wage (NMW) increases normally occurring in October make sure you don’t miss these changes.
- NLW (Over 25 year olds) – £7.50 per hour
- NMW (21-24 year olds) – £7.05 per hour
- NMW (18-20 year olds) – £5.60 per hour
- NMW (16-17 year olds) – £4.05 per hour
- Apprentice rate – £3.50 per hour
2 – Tax Allowance Increases
The tax free allowance will be £11,500 giving an emergency Tax Code of 1150L.
All tax codes with an L suffix will increase by 50. Those employees taking advantage of the shared marriage allowance will be increased by 55 for M tax codes and 45 for N tax codes.
If you would like more information on the Shared Marriage Allowance please get in touch.
3 – Tax Thresholds
For the first time tax thresholds will different between Scotland and the rest of the UK.
Rest of UK
- 20% rate = £0 – £33,500
- 40% rate = £33,501 – £150,000
- 45% rate = over £150,000
- 20% rate = £0 – £31,500
- 40% rate = £31,501 – £150,000
- 45% rate = over £150,000
S Tax codes are based on an employee’s address on data held by HMRC. This is not necessarily the same as the data reported via payroll on RTI submissions. All employees with a Scottish tax code (prefix of S for example S1150L) are advised to create an online account with HMRC and check their address. Similarly, those workers living in Scotland without an S prefix should update their address with HMRC via online services to avoid a tax bill next year.
4 – Statutory Payments
Increases is the statutory payments.
Statutory Sick Pay – £89.35 per week
Adoption / Maternity / Paternity / Shared Parental Pay – £140.98 per week
Small Employers (Annual National Insurance contribution of below £45,000) will continue to be able to reclaim 100% of payments plus 3% contribution. Large employers will be able to reclaim 92%.
5 – Student Loan Thresholds
Student Loan threshold for Plan 1 will increase to £17,775. The threshold for Plan 2 will remain at £21,000 as will the contribution rate of 9%.
6 – National Insurance Thresholds
For the first time Employee and Employer NI thresholds will be in line with each other with contributions starting at the higher level of £157 per week / £680 per month.
7 – Automatic Enrolment
The qualifying earnings band will now be between £5,876 and £45,000, Although the automatic trigger for automatic enrolment remains at £10,000 per annum.
If you are currently preparing for auto-enrolment or have questions about re-enrolment on your 3rd year anniversary for staging you should book a place onto our next employer surgery. An opportunity to meet with a member of our expert payroll team and ask questions relating to your business.
8 – Apprenticeship levy
An additional levy of 0.5% on all NIable earnings. Each employer will be given a £15,000 allowance which means only Employers with a Payroll of over £3 million will be affected.
9 – Gender Pay Gap reporting
Employers with over 250 employees will now be required to report statutory calculations showing the difference of pay between male and female employees.
If you would like to understand the impact of these changes in more detail please get in touch.
10 – Payroll Dates to remember
6th April 2017 – New Tax Bands Effective
19th April 2017 – Deadline for final RTI submission
31st May 2017 – Deadline for issuing P60s to employees
6th July 2017 – Return P11Ds / P9Ds to HMRC
22nd July 2017 – Class 1A from P11Ds payment due (19th of July for Cheques)
22nd October 20017 – Class 1B from P11Ds payment due (19th October for Cheques)