2014/15 Budget Summary for UK Employers

There are a number of 2014-15 Budget measures which will affect the payroll for employers.

As a general rule, effective from 05th April 2014, unless an amended code notification has been received on a form P9 (T), employers should amend 2013-14 codes as follows:

• Tax codes ‘L’ suffix codes – increase by 56; code 944L becomes 1000L 
• The PAYE threshold with effect from 6 April 2014 is raised to £192 per week (£833 per month) 
• The code for emergency use with effect from 6 April 2014 is 1000L

 National Insurance contribution thresholds 2014-15

Statutory Payment Changes 2014/15

Statutory Adoption Pay: Earnings threshold £111.00, Statutory Payment Changes 2014/15
Statutory Adoption Pay: Earnings threshold £111.00, Standard Rate £138.18
Statutory Maternity Pay: Earnings threshold £111.00, Standard rate £138.18
Statutory Paternity Pay: Earnings threshold £111.00, Ordinary Statutory Paternity Pay (Standard Rate) £138.18, Additional Statutory Paternity Pay (Standard Rate) £138.18
Statutory Sick Pay: Earnings threshold £111.00, Standard rate £87.55

• The SSP rate will take effect from 6 April 2014.
• The SMP, SAP, OSPP and ASPP rates will take effect for payment weeks beginning on or after the 1st Sunday in April which is also 6 April 2014.
• There are no changes to the rules and rates for the recovery of SMP, SAP, OSPP and ASPP for 2014-15.
• The Percentage Threshold Scheme for recovery of SSP will be abolished from 6th April 2014.

National Insurance: £2,000 employment allowance

The Government will introduce an allowance of £2,000 per year for all businesses and charities to be offset against their employer Class 1 secondary NICs liability from April 2014.

Exemption threshold for employer provided beneficial loans

Legislation will be introduced in Finance Bill 2014 to increase the exempt threshold for employment-related loans from £5,000 to £10,000 with effect from 6 April 2014.

Posted byKaren McDarbyinNICPAYEPayroll Software

2014 NIC Employment Allowance

The Chancellor announced the creation of a NICs Employment Allowance in the 2013 Budget. The implementation date for this is planned for 06th April 2014.

Businesses, Charities and Community Amateur Sports Clubs will be able to reduce their NICs bill by up to £2,000 per year. The Employment Allowance is to be set against an employer’s liability for secondary Class 1 National Insurance Contributions (NICs) only, not against other NICs such as primary (employee’s) Class 1, Class 1A or Class 1B contributions.

The greatest benefit of this allowance goes to small businesses, as it will reduce their National Insurance Contributions bill the most. Over 90% of the benefit of this allowance will go to small businesses with fewer than 50 employees.

This will also mean that businesses will be able to employ four adults or ten 18-20 year-olds full-time on the National Minimum Wage without paying any employer National Insurance contributions at all.

The claim process for eligible employers is very straightforward and is administered through the payroll;

• Employers will include a flag, within their Employer Payment Summary (EPS) submission via RTI, notifying HMRC that they are claiming the employment allowance.
• The employer then reduces their employers NIC liability until the £2,000 allowance is exhausted (up to a limit of their NI liability, i.e. without resulting in a refund position) on the actual EPS.

The Employment Allowance calculator allows you to see the effect of the Employment Allowance in 2014. For example, you can see the effect on your National Insurance Contributions bill of employing one additional person or you can look at the reduction to your current National Insurance Contributions payments. Simply follow the link to access the calculator;

http://www.employmentallowance.com/allowance-calculator/

Posted byKaren McDarbyinNICPayroll Software

Employers facing increase in sick pay costs!!

From 6 April 2014, employers will no longer be able to recover payments made for Statutory Sick Pay (SSP). HMRC has made the decision to abolish the Percentage Threshold Scheme (PTS), which is the scheme in place to provide SSP compensation for employers.

Currently an employer is entitled to recover some of the SSP paid to their employees if the total SSP paid in a tax month is greater than a set percentage of their gross Class 1 NICs (employers’ and employees’) liability for that month

Although PTS is being abolished from April 2014, employers will still be able to make claims for reimbursement of SSP under PTS (paid for sickness periods up to 5 April 14) until the end of the 2015/16 tax year.

In addition, the associated SSP record-keeping requirements will also be abolished at the end of 2013/2014. However, employers will still be required to maintain records for PAYE purposes and to demonstrate they are meeting their SSP obligations.

The decision to abolish PTS was made as a result of an independent review which found that the current scheme does not support the proper management of sickness absence in the workplace.

The Government has therefore decided to reinvest the money in a new Health and Work Service (HWS), due to be introduced by the end of 2014. The aim of this service will be to:

• help employees who have been on sickness absence for four weeks or more to return to work,
• support employers to better manage sickness absence among their workforce,
• give GPs access to work-related health support for the patients.

Employers, who want to avoid being faced with increasing costs, need to look carefully at how they manage sickness absence in their workforce. The first point of action will be to implement, or review, the company sickness policy.

Posted byLaura MurphyinCompany HandbookContract of employmentNICPayroll Software

The National Insurance Contributions (Application of Part 7 of the Finance Act 2004) Regulations 2012 (SI 2012/1868)

These regulations replace all previous versions of the regulations and consolidate them into a single instrument. This legislation comes into effect on 1 September 2012.

The most recent changes relate mainly to anti avoidance and an explanatory memorandum can be viewed here.

The regulations can be viewed here.

Bright Contracts – Employment contracts and handbooks.
BrightPay – Payroll & Auto Enrolment Software

Posted byPaul ByrneinNIC

Approaching HMRC deadlines

To avoid paying late you must make sure HM Revenue & Customs (HMRC) have cleared funds by the due date. If you pay electronically the due date is the 22nd of the month following the end of the tax month, or quarter to which it relates.

For 2012-13, PAYE month 03 - or quarter 1 - period ended 5th July 2012, the due date is Sunday 22nd July 2012.

Additionally for 2011-12, Class 1A NICs, the due date is Sunday 22nd July 2012.

HMRC must receive cleared funds by Sunday 22nd July 2012.

Bright Contracts – Employment contracts and handbooks.
BrightPay – Payroll & Auto Enrolment Software

Posted byKaren McDarbyinHMRCNICPAYEPayroll

Removal of some occupations listed as being employees for NIC purposes.

'Lecturers, teachers or instructors' are no longer included in the list of occupations for NIC purposes covered by Social Security (Categorisation of Earners) Regulations 1978. Normal employment status rules apply. The CWG2(2012) Employer further guide to PAYE and NICs' Chapter 1 Page 5 has been updated.

Bright Contracts - Employment contracts and handbooks.
BrightPay – Payroll & Auto Enrolment Software

Read more at www.hmrc.gov.uk >

Posted byPaul ByrneinHMRCNICPAYEPayroll