Copyright © 2024 Thesaurus Software Ltd T/A Bright Software Group.
3 Shortlands, Hammersmith, London, W6 8DA
[email protected] 0345 9390019Dec 2015
9
The Government has announced plans to adjust, by about 6 months, the date on which the minimum pension contribution levels increase.
Phase 2 (when the minimum contributions increase to 3% employee and 2% employer) was scheduled for 1st October 2017 and phase 3 (when they increase to 5% employee and 3% employer) was scheduled for 1st October 2018.
Phase 2 will now start on 6 April 2018† and phase 3 will start on 6 April 2019† (†subject to parliamentary approval). This is not a delay to the roll out of automatic enrolment, but a measure to give all employers, and smaller employers in particular, more time to prepare for the increases and to reduce the administrative burden by aligning the changes with the start of each tax year.
This change will also make it considerably easier for payroll software to deal with the uplifts as they are now aligned to payroll years.
Dec 2015
8
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
Dec 2015
8
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.
Oct 2015
23
Currently there are two types of Income Contingent Student Loans however, only one is repaid via deduction through payroll. Income Contingent Loans pre-September 2012 are known as Plan 1 loans and are currently operated through payroll. Loans taken out post-September 2012 are known as Plan 2 loans and are currently repaid outside of the payroll directly to the Student Loans Company.
From 6 April 2016 Plan 2 loans will also be calculated and repaid via deduction from payroll. Employees repaying under the existing threshold will not be affected by the change.
Thresholds:
Plan 1 Loans - £17,495 per annum
Plan 2 Loans - £21,000 per annum
Key employer facts:
• Employers will never be asked to operate more than one plan type at a time for an employee
• The main employer notice will continue to be the SL1 start notice, every SL1 issued will indicate which plan type should be operated
• From the 6th April 2016, the starter declaration checklist will prompt employers to ask new employees about their student loan plan type
• The P45 will not be amended, it will continue to indicate if employees were repaying a student loan in their previous employment but it will not specify if it was a Plan 1 or Plan 2 loan
• If new employees cannot say which Plan type they have, the default for employers is Plan 1
• If this is incorrect, HMRC will be sending a SL1 anyway once the new employee information is sent on the first FPS
• If applicable, the Plan type can be amended within the payroll software
Further information can be found in HMRC’s August 2015 Employer Bulletin
https://www.gov.uk/government/publications/employer-bulletin-august-2015
Oct 2015
7
Chancellor George Osborne has announced that he will extend shared parental leave and pay to working grandparents, in recognition of the crucial role that working grandparents play in providing childcare for their families.
Approximately seven million grandparents are said to be involved in childcare, with evidence suggesting that nearly 2 million grandparents have given up work, reduced their hours or have taken time off work to help their families who cannot afford childcare costs. More than half of mothers rely on grandparents for childcare when they first go back to work after maternity leave, and over 60 per cent of working grandparents with grandchildren aged under 16 provide some childcare.
Consultation on the new measure will begin in the first half of 2017, with the aim of implementing the policy by 2018. The extension of shared parental leave and pay to working grandparents will ensure that hardworking families can structure their lives in a way that will work best for them and will provide flexible working arrangements for grandparents without the fear of losing their job.
Sep 2015
28
The new rates are dependent on age and are as follows:
Workers aged 21 and over: £6.70 an hour
Development rate for workers aged 18-20: £5.30 an hour
Young workers rate for workers aged 16-17: £3.87 an hour
Apprentices under 19, or over 19 and in first year of the apprenticeship: £3.30 an hour
In addition to the above, from April 2016, the government will introduce a new mandatory National Living Wage (NLW) for workers aged 25 and above, initially set at £7.20 – a rise of 70p relative to the current National Minimum Wage (NMW) rate, and 50p above the increase coming into force on 1st October.
The National Minimum Wage will continue to apply from April 2016 for those aged 21 to 24.
Sep 2015
1
Error 1046, one of the most common issues that you may face when processing payroll. The Error 1046 will state: The supplied user credentials failed validation for the requested service.
BrightPay does not check your User/Sender ID and Password as we don’t know what they should be. BrightPay sends this information to the Government Gateway. If you get this Error 1046 it means that the Government Gateway has rejected the submission.
Is the User/Sender ID and Password correct?
Ensure that you can access the HMRC website at http://www.gateway.gov.uk/ using your User ID and Password that you entered in BrightPay. If you are unable to log in you can call the HMRC Online Services Helpdesk on 0300 200 3600.
Is your password greater than 12 digits?
When you are entering your password into the HMRC website, only the first 12 digits will be accepted. However when entering your password into the software it recognises all digits and deems anything after the first 12 as being incorrect causing the Error 1046. If your password is longer than 12 digits, only use the first 12 in BrightPay.
Is your Government Gateway activated?
Once you have registered to use HMRC’s Government Gateway your new Activation Code will be sent via post within 7 days. Once received you can log into HMRC online using your User ID and Password and activate the service. You must do this within 28 days of the date shown on the Activation Code letter.
Double check the information you entered in BrightPay!
Ensure that your PAYE reference number, Accounts office reference and HMRC office name are entered correctly and match the details that HMRC have for you. Check the references don’t have 'Z' instead of '2' or '0' in place of 'O'. Ensure your email address is correct and matches the one you have registered with HMRC.
Aug 2015
18
Hmrc have recently provided employers with information about late/non filing PAYE penalties, inaccurate reports and how to avoid penalties in the future.
Penalties are applied when one or more of the following occur:
- The full payment submission (FPS) was late
- The expected number of FPSs are not sent for any given period
- An EPS (Employer Payment Summary) is not sent when you did not pay any employees in any given pay period
HMRC will not charge a penalty if:
- The FPS is late but all reported payments on the FPS are within 3 days of the employee’s payday
- A new employer sends their first FPS within 30 days of paying an employee
- It is the first failure in the tax year to send a report on time (this does not apply to employers who register with HMRC as an annual scheme or have fewer than 50 employees for the tax year 2014 to 2015)
HOW MUCH WILL BE CHARGED FOR LATE FILING?
Number of employees - Monthly penalty
1 to 9 - £100
10 to 49 - £200
50 to 249 - £300
250 or more - £400
If an employer is over 3 months late they wil charged and additional penalty of 5% of the tax and NI Insurance that they should have reported.
Also be aware that if there is more than one PAYE scheme penalties can be charged on each!
Aug 2015
14
The tool to be provided by the Pensions Regulator for HMRC Basic PAYE Tools (BPT) users will only handle qualifying earnings schemes. It will not do communications nor will it prepare files for the pension companies. It will be an Excel spreadsheet which will need to be populated each pay period so that assessments and calculations can be performed. The results will then need to be input back into BPT. Then the BPT user will need to log in to the pension scheme's web portal and manually input the figures. There will be extra time required in this process and there will be potential for error.
This combined with the fact that HMRC Basic PAYE Tools does not prepare payslips means that the proposition for commercially available fully integrated payroll and auto enrolment software is much stronger.
BrightPay costs £89 (plus VAT) per annum* and will automatically import the file from HMRC Basic PAYE Tools meaning there is no time involved in setting up.
In addition, BrightPay will include the NEST API before January 2016 meaning NEST registered employers will not even need to log in to the NEST portal when submitting the contribution file each pay period.
* Single employer, unlimited employees. BrightPay is free for employers with 3 or less employees.
Jul 2015
26
The Pensions Regulator has revised its estimate of the number of small and micro employers who will need to stage between now and 2018.
TPR figures show that a total of around 1.8 million small and micro employers will stage over the next three years, compared to the previous estimate of 1.3 million.
TPR said that the reason for the revision of the estimate was that more business start-ups had entered the UK market, and that there were lower numbers of business closures than anticipated.
However it should be noted that a large number of micro employers will be one director companies where the director is also the sole employee. These employers are effectively exempt from auto enrolment and can "opt out" by informing TPR.
Copyright © 2024 Thesaurus Software Ltd T/A Bright Software Group.
3 Shortlands, Hammersmith, London, W6 8DA
[email protected] 0345 9390019