• Black Mountain Group

Black Mountain quarterly newsletter - March 2018 (UK)

In this UK payroll update newsletter the following topics are covered:


1. New Rates and Limits from April 2018

2. GDPR

3. Gender Pay Gap Reporting

4. Tax Free Childcare

5. Termination Payments

6. Payrolling Benefits

7. Auto Enrolment Pension Rate Changes

8. Off Payroll Working in the Private Sector



1. NEW RATES AND LIMITS FROM APRIL 2018


TAX – UK except Scotland

Basic Personal Allowance £11,850

Income Limit for Personal Allowance £100,000

Emergency Tax Code 1185L

20% Basic Rate £0 - £34,500

40% Higher Rate £34,501 - £150,000

45% Additional Rate Over £150,000


TAX – Scotland Only (Subject to Scottish Parliamentary Approval)

Basic Personal Allowance £11,850

Income Limit for Personal Allowance £100,000

Emergency Tax Code 1185L

19% Starter Rate £0 - £2,000

20% Basic Rate £2,001 - £12,150

21% Intermediate Rate £12,151 - £32,423

41% Higher Rate £32,424 - £150,000

46% Top Rate Over £150,000


NATIONAL INSURANCE

Lower Earnings Limit £116 per week

Primary & Secondary Threshold £162 per week

Upper Earnings Limit £892 per week

Percentage Rates remain unchanged at 13.8% Employer and 12% Employee to UEL then 2%.


EMPLOYERS NI FOR UNDER 21s and apprentices

Employers National Insurance contributions are not payable for all employees under the age of 21 or for apprentices under the age of 25 whose earnings are under the Upper Secondary Threshold (£892 per week). Earnings above this will attract Employers NI at the normal secondary rate of 13.8%.


STATUTORY PAYMENTS

QUALIFYING EARNINGS LEVEL £116 per week

Statutory Sick Pay £92.05 per week

Statutory Maternity Pay 6 weeks @ 90% of average weekly earnings

33 weeks @ lesser of 90% of AWE or £145.18

Statutory Adoption Pay 6 weeks @ 90% of average weekly earnings

33 weeks @ lesser of 90% of AWE or £145.18

Statutory Paternity Pay 2 weeks @ lesser of 90% of AWE or £145.18


NATIONAL MINIMUM AND NATIONAL LIVING WAGE

The new National Living Wage and Minimum Wage Rates apply from 1st April 2018;

Minimum Living Wage Rate for over 25s - £7.83 per hour (from £7.50).

Adult Rate (21 – 24 year olds) £7.38 per hour (from £7.05)

18 -20 year olds £5.90 per hour (from £5.60)

16-17 year olds £4.20 per hour (from £4.05)

Apprentice Rate £3.70 per hour (from £3.50)


2. GDPR


Please see our other article dedicated to our GDPR statement and how we will stay compliant with all the new legislation.


If you require any help with your own preparation or would like to have an independent review of your processes ready for compliance please get in touch for a quote.



3. GENDER PAY GAP REPORTING


Private and voluntary sector employers with at least 250 on the snapshot date of 5th April 2017 must publish their Gender Pay Gap reports online by 4th April 2018. Many smaller businesses are publishing reports voluntarily.


The data required to comply with the reporting requirements is quite complicated and covers a set period for set employees. The periods used for bonus payments need to be carefully thought through, so you will need to be prepared in good time.

If you would like us to undertake this for you please contact the payroll department for a quote.


4. TAX FREE CHILDCARE


Salary Sacrifice Child Care Voucher (CCV) schemes will close to new members from April 2018, after that only existing members will be able stay in their scheme if the employer keeps it open. The new tax-free childcare scheme provides eligible families with an additional 20% towards their childcare costs up to a value of £2,000 per child per year (£4,000 is the child is disabled). To qualify for the new scheme both parents must work a minimum of 16 hours per week and receive at least the National Minimum Wage. If one parent earns in excess of £100,000 the couple will not be eligible.

Employees will not be able to benefit from both schemes so will need to consider which is the best option for them.


5. TERMINATION PAYMENTS


Whilst some of the new Class 1A NIC charge on termination payments over £30,000 has been postponed until April 2019. There will be changes to Payment in lieu of Notice (PILON) payments from April 2018. Tax and NI will apply to all PILONS from April 2018 regardless of whether or not they are contractual.


6. PAYROLLING BENEFITS


Just a reminder – if you are going to payroll benefits to avoid the P11D process from April 2018 you must register with HMRC before the end of the current tax year.

https://www.gov.uk/guidance/paying-your-employees-expenses-and-benefits-through-your-payroll



7. AUTO ENROLMENT PENSIONS RATE CHANGES


Just a reminder that the statutory minimum contributions to Auto Enrolment Pension Schemes increase from April 2018.

From April 2018 to March 2019 the minimums are;

Employer 2%, Employee 3%, Total 5%

From April 2019 these will increase to

Employer 3%, Employee 5%, Total 8%


8. OFF PAYROLL WORKING IN THE PRIVATE SECTOR


The rules for off payroll working (IR35) for engagements in the public sector were reformed in April 2017. Early indications show increased compliance and therefore the government will start to look at extending the rules to contracts in the private sector.

COMPANY

COMPLIANCE

PAYROLL MANAGEMENT

PEOPLE SERVICES

EMPLOYEE

BENEFITS

© 2020 by Black Mountain Group

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