Personal allowance is increasing to £11,000.
Employment Allowance
Employment Allowance which is currently available to set against Employer’s National Insurance Contributions will increase from £2,000 to £3,000 per annum.
Sole director companies will lose this benefit.
National Living Wage (NLW)
A mandatory ‘National Living Wage’ (NLW) of £7.20 per hour will be introduced from 1 April 2016 for all working people aged 25 and over.
Preparing for the NLW
- Gather your facts about the current and projected age profile of your organisation to estimate the cost of the NLW in its first year.
- Look beyond the 2016 increase. With the Government seeking for the NLW to rise to over £9 in 2020, consider affordability of the incremental increases.
- Consider the knock on effect of implementing the NLW such as ensuring the pay structures in place reflect the value of jobs within the organisation.
Ensure compliance to avoid fines as the Government has issued a package of measures around enforcement.
National Insurance
No Employer’s National Insurance Contributions due for those employees under 21 (NI code ‘M’) and for Apprentices aged under 25 (NI code ‘H’).
End of contracting out NIC.
Student Loan payments
Plan 1
Loans taken out from 1 September 1998 by a student with a home address in the UK. Deductions at 9% of NICable pay above the threshold of £17,495 (16/17).
Processed through payroll and deductions remitted to HMRC.
Plan 2
Loans from 1 September 2012 by student with home address in England or Wales. Deductions are still at 9% of NICable pay however, the earnings threshold is £21,000 with payments made directly to HMRC.
From April 2016 both Plan 1 and Plan 2 loans will be processed through the payroll. Form SL1 (Student Loan Start notice) issued by HMRC to employers will show which plan to operate.
If you would like any further information please contact us on 028 90 491711 or email janet.larmour@miscampbell.co.uk.