Apply for Statutory Payments in Advance with HMRC

Recovery rates and National Insurance contributions threshold will remain the same for the 2016-17 tax year, as announced by HMRC. An update has been provided via GOV.UK from HMRC on how to apply for statutory payment types in advance, such as maternity pay, parental, paternal or adoption pay. This is only relevant if the employer requires financial assistance.

In order to apply for the statutory pay in advance with HMRC you will need to either use the online service which you can do through your Government Gateway log in or by completing a form on screen and emailing this to HMRC. You will only need to enter the amount of weeks you are claiming in the 2015-16 tax year. If you are applying for the 2016-17 tax year also you can claim this by indicating that it is for the New tax year. Both can be claimed at the one time but need to be identified on the claim as Current tax year and New tax year.

Further details can be found at https://www.gov.uk/recover-statutory-payments/if-you-cant-afford-to-make-payments

Posted byDebbie ClarkeinPayroll

No 'Y' Suffix Tax Code from 6th April 2016

For the tax year beginning 6th April 2016 HMRC will cease to use the suffix 'Y' on tax code notifications P2, P6 and P9. As the personal tax allowance in 2016-17 will increase from £10,600 to £11,000 it will result in the basic personal allowance being higher than the maximum personal age allowance of £10,660 for people born before 6th April 1938.

All employers or pension providers will receive a P9 coding notification for the 2016-17 tax year advising the correct tax code for all individuals affected. All individuals who would have had a 'Y' suffix in their tax code previously will be issued with a P2 notice of coding informing them of their new tax code.

HMRC's systems will still accept the 'Y' suffix if submitted but HMRC have requested the 'Y' suffix not to be used by employers or payroll agents.

Posted byDebbie ClarkeinHMRCPayroll Software

Tax Rates, Tax Credit Rates and Thresholds 2016-17 Tax Year

HMRC have announced the tax rates, tax credit rates and thresholds for the 2016-17 tax year which those processing payroll for employees should be aware of.

Tax Rates and Tax Bands

There are no changes in the basic rate, higher rate or additional rate of taxes at 20%, 40% and 45% respectively.

The basic rate band has increased by £215 from £0-£31,785 in 2015-16 to £0-£32,000. The higher rate has increased from £31,786-£150,000 to £32,000-£150,000 where the additional rate remains at over £150,000.

Personal Allowances

From 2016-17 onwards, all individuals will be entitled to the same personal allowance, regardless of the individuals’ date of birth. This personal allowance is £11,000, an increase of £400 from 2015-16. The income limit for personal allowance remains at £100,000.
The marriage allowance has increased £40 from £1,060 to £1,100. There have been other allowances such as a dividend allowance and personal savings allowance introduced for the 2016-17 tax year.

National Insurance Contribution Thresholds

There are no changes to the weekly lower earnings limit (LEL), weekly primary threshold or the weekly secondary threshold. The upper earnings limit (UEL) has increased from £815 in 2015-16 to £827 in 2016-17. There are no changes to the Class 1 National Insurance contribution rates for 2016-17.

The Employment allowance has increased by £1,000 to £3,000 for 2016-17 per employer for the tax year.

The details in full are available to view on the HMRC website with the following link:
https://www.gov.uk/government/publications/tax-and-tax-credit-rates-and-thresholds-for-2016-17/tax-and-tax-credit-rates-and-thresholds-for-2016-17

Posted byDebbie ClarkeinPayroll Software

Single Director Companies excluded from Employment Allowance claim from 6th April 2016

Single-director companies will not be eligible to claim the National Insurance Contributions Employment Allowance for the new tax year 2016-17. The employment allowance for the new tax year 2016-17 will be £3,000, an increase from £2,000 from 2015-16.

A Technical Consultation on Companies Excluded from the NICs Employment Allowance has been published to seek comment on the draft secondary legislation to implement the new exclusion. The consultation will run until 3rd January 2016.

The main reason for this change is to make the Employment Allowance more focused on businesses that are creating and sustaining employment and as a result where a director is the sole employee of a limited company this company is excluded from availing of the Employment Allowance. These regulations will apply in England, Wales, Scotland, and Northern Ireland.

Posted byDebbie ClarkeinPayroll Software