HMRC have published their latest Employer Bulletin so PSC has summarised the main points that may affect payroll
Reporting expenses and benefits for the tax year ending 5 April 2015
Don’t forget you need to tell HMRC about any expenses and benefits you've provided
to your employees or directors during the tax year ending 5 April 2015. You must
report these details to HMRC by 6 July 2015.
HMRC have also published an Expenses and Benefits from employment Toolkit which you may find useful as it provides guidance on how to avoid making common errors that HMRC see in filed returns.
PSC has successfully completed and returned a number of our client’s benefits and expenses to HMRC with our team of P11D experts working hard to meet deadlines. If you need advice or guidance before the cut-off-date of July 6th 2015, please do give us a call on 01223 506366.
Employing apprentices under the age of 25
From 6 April 2016, if you employ apprentices under the age of 25 you may no longer
need to pay employer Class 1 secondary National Insurance contributions (NICs)
The rate of Class 1 secondary NICs for certain apprentices under age 25 will be zero
up to the new ‘Apprentice Upper Secondary Threshold’ (AUST) which, for the tax
year starting 6 April 2016, will be the same as the Upper Earnings Limit (UEL). Class
1 secondary NICs will however continue to be payable on all earnings above this
threshold. The basic rules and calculations of National Insurance including how Class
1 NICs are assessed will not be changed.
The Apprentice Upper Secondary Threshold (AUST) is different to the Upper
Secondary Threshold (UST) which applies to employees under age 21; although it
is set at the same amount for tax year starting 6 April 2016.
Class 1A and Class 1B NICs are not affected by this change and should be collected
and reported as normal.
From 6 April 2016 two new category letters will be introduced to use when assessing
Class 1 NICs for qualifying apprentices who are under the age of 25. The definition
of a qualifying apprentice for this purpose will be available later in the year.
• H – Standard rate contributions for Apprentices under age 25.
• G – Standard rate contributions for Apprentice Mariners under age 25.
Please note you will also need to use the above new category letters from April 2016
for any qualifying apprentices you employ who also currently qualify for the secondary
Class 1 National Insurance exemption because they are under the age of 21.
As with all other NICs calculations, it will be the responsibility of the employer to
ensure the correct category letter is used. To do this, you will need to make sure you
hold the correct date of birth for your employees.
The Employment Allowance will not be impacted by the introduction of this change.
The £2,000 allowance will continue to be deducted from any secondary NICs the
employer is due to pay, as it is now.
Marriage Allowance (previously referred to as Transferable Allowances for Married
Couples and Civil Partners) was introduced from April 2015.
Where neither spouse/civil partner is liable to income tax above the basic rate,
individuals will be able to transfer part of their tax free personal allowances to
their spouse or civil partner. For the 2015 to 2016 tax year up to £1,060 will be
transferable, representing a saving of up to £212 per year for eligible couples.
Individuals can check their eligibility and register their interest online. Those
customers who don’t register an interest will still be able to apply later in the year
when the full service opens. HMRC will have an advertising campaign so that
customers will know when the service opens.
To support the change both the transferor and recipient’s tax codes will have to
be amended. This will in turn introduce two new tax code suffixes. They will be:
• M will be used for the spouse/civil partner receiving the transferred allowance.
• N will be used for the spouse/civil partner transferring the allowance.
National Minimum Wage - Change in Penalty Charges
The Government has increased the penalties imposed on employers that underpay
their workers in breach of the National Minimum Wage (NMW legislation. For pay
reference periods starting on or after 26 May 2015 the basis for the maximum
NMW penalty has changed from £20,000 per notice to £20,000 per worker.
Further details of the increase in NMW penalties can be found in the
NMW law: enforcement policy.
See our article on NMW rates.
Shared Parental Leave and Pay
Shared Parental Leave and Pay is now in force for the parents of babies due and
adopters of children placed for adoption on or after 5 April 2015. It gives working
parents and adopters greater choice and flexibility over how they care for their child
in the first year. The new rights operate in Great Britain and Northern Ireland
See our article on ShPL and ShPP for more information.
Automatic Enrolment: New online step-by-step guide
The law on workplace pensions has changed. Every employer with at least one
member of staff now has duties, including enrolling those who are eligible into a
workplace pension scheme and contributing to it. This is called automatic enrolment.
The best place to start looking for information if you haven’t done so already is The
Pensions Regulator’s website. They’ve recently launched an online step-by-step guide
which takes you through the various tasks you’ll need to complete and includes links
to resources to help you at different steps in the process, including a planning tool.
You’re considered an employer even if you just employ someone to help you around
the home. If you employ a care or support worker, the regulator has some additional
guidance that will help you with your legal duties – it’s available here.
If you don’t have any staff other than directors, you may not have any duties. Check
whether automatic enrolment applies to you here.
PSC is happy to advise clients on the payroll aspects of AE. Please contact us for further details and prices.
Toolkits to reduce the common errors in returns
HMRC has a range of 20 free toolkits to provide guidance on how to avoid making
common errors that are seen in filed returns.
The toolkits are principally aimed at tax agents and advisers but they may also be
of interest to employers. The most relevant toolkits for employers are:
• Expenses and benefits from employment toolkit
• National Insurance contributions and statutory payments toolkit
For more information about all of the toolkits please visit www.gov.uk/government/