Following on from our article on the various Payroll changes introduced last year, we now develop the changes being introduced from 6th April 2015 and detail new statutory changes introduced by HMRC. As before we have highlighted what we consider being the main points and would be glad to discuss any queries you may have.
1. Abolition of Employers NIC for under 21’s:
From 6th April 2015 employers with employees under 21 years old will no longer have to pay Employer NIC on earnings up to the Upper Secondary Threshold (UST) for those employees.
For employees who are at or over, 16 and under 21 there will be seven new NIC category letters. The most common category letter will be M – not contracted out standard rate contributions for employees under 21.
Employers will still pay 13.8% on those earnings over the UST which is aligned to the Upper Earnings Limit.
From April 2016 employers of apprentices under the age of 25 will no longer be required to pay employers NIC on earnings up to the Upper Earnings limit.
2. Transferable Allowances:
Anyone not liable to income tax above the basic rate band will be able to transfer up to £1060 of personal allowance to their spouse or civil partner provided they do not exceed the basic rate band.
New M and N codes are being introduced to permit this through the payroll.
M – Identifies those receiving the transferred allowance
N – Identifies those transferring the excess allowance
3. Shared Parental Leave (SPL):
For those babies born after 06 April 2015 parents can agree to convert a period of Maternity leave into SPL.
- The leave available is 52 weeks minus the weeks of maternity leave already taken
- At least a week must be taken at a time and all leave must be taken before the child’s first birthday
- Parents can choose to be on leave at the same time.
- Ordinary Paternity Leave is not affected. Fathers can still take up to 2 weeks ordinary paternity leave and then take SPL if required.
4. Restrictions to deductions via PAYE:
Prior to 2015/16 only ‘K’ codes restricted the amount of tax that could be deducted to 50% of taxable pay. Under new rules the tax deducted in a single pay period will be limited to 50% of the gross taxable earnings for all tax codes.
5. Changes to CIS scheme:
The requirement for a contractor to make a return to HMRC, even if the contractor has not made any payments in the month will be removed. Contractors can make a voluntary NIL return but will no longer be obliged to do so.
We understand however penalties are likely to be charged where no submission is received by HMRC and while the penalty can be appealed, it might be worthwhile to make voluntary NIL submissions until this position changes.
6. Filing Penalties:
Real Time Information filing penalties will start on 6th March 2015 for all those PAYE schemes with 49 or fewer employees. Employers may incur a penalty each month in which RTI reports are submitted late.
There is a temporary relaxation of the penalties for micro employers (those with nine or fewer employees) until 5th April 2016.
7. Statutory changes from 6th April 2015:
- Student loan Threshold will increase to £17335
- Tax codes with suffix ‘L’ will be uplifted to 1060L
- Basic rate tax band will be £31785. Higher rate tax will be due on earnings over £42385
- Statutory redundancy pay increased to £475 per week. Maximum Statutory Redundancy award equates to £14250
- Employers Allowance extended to those employing personal care workers.
8. Employment Intermediaries:
HMRC are responding to increased false self-employment on the part of Employment Intermediaries acting on behalf of self-employed workers who should legally be regarded as employed.
From 6th April 2015 Employment Intermediaries must send details of workers they place with clients who are not:
- Direct employees or
- Being treated as employees.
9. Auto Enrolment:
Most small employers will have a staging date falling late 2015, 2016 or early 2017. Statistics from The Pension Regulator advise that 50% of employers are still underprepared for this major change. If you need any advice please contact Miscampbell & Co.
If any of the above applies to you please contact
Miscampbell & Co
Janet.larmour@miscampbell.co.uk
Phone: 028 90 491711