• Black Mountain Group

UK PAYROLL UPDATE - FEBRUARY 2019

1. RATES AND LIMITS FROM APRIL 2019

TAX – UK except Scotland

Basic Personal Allowance £12,500

Income Limit for Personal Allowance £100,000

Emergency Tax Code 1250L

20% Basic Rate £0 - £37,500

40% Higher Rate £37,501 - £150,000

45% Additional Rate Over £150,000


TAX – Scotland Only

Basic Personal Allowance £12,500

Income Limit for Personal Allowance £100,000

Emergency Tax Code 1250L

19% Starter Rate £0 - £2,049

20% Basic Rate £2,050 - £12,444

21% Intermediate Rate £12,445 - £30,930

41% Higher Rate £30,931 - £150,000

46% Top Rate Over £150,000


NATIONAL INSURANCE

Lower Earnings Limit £118 per week

Primary & Secondary Threshold £166 per week

Upper Earnings Limit £962 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 (£962 per week). Earnings above this will attract Employers NI at the normal secondary rate of 13.8%.


STATUTORY PAYMENTS

QUALIFYING EARNINGS LEVEL £118 per week

Statutory Sick Pay £94.25 per week

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

33 weeks @ lesser of 90% of AWE or £148.68

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

33 weeks @ lesser of 90% of AWE or £148.68

Statutory Paternity Pay 2 weeks @ lesser of 90% of AWE or £148.68


RECOVERY FROM HMRC

SSP is a company cost and cannot be recovered from HMRC

SMP/SAP/SPP/ShPP – you can recover 92% of all statutory payments made. If you are a small employer with a total NI bill of less than £45,000 you can claim 103% recovery.

STUDENT LOANS

Earnings thresholds from April 2019

Plan 1 - 18,935

Plan 2 - 25,725 - deductions for plan 1 and plan 2 stay at 9%

Postgraduate Loans – earnings threshold £21,000, deductions 6%

Welsh Rate of Income Tax

Individuals who have been identified by HMRC as Welsh taxpayers should have received notification of their status. Tax codes with C prefix will be issued ready for new tax year. Rates for 2019/20 remain the same as UK as above.


2. NATIONAL MINIMUM AND NATIONAL LIVING WAGE

The new National Living Wage and Minimum Wage Rates apply from 1st April 2019;

Minimum Living Wage Rate for over 25s - £8.21 per hour (from £7.83).

Adult Rate (21 – 24 year olds) £7.70 per hour (from £7.38)

18 -20 year olds £6.15 per hour (from £5.90)

16-17 year olds £4.35 per hour (from £4.20)

Apprentice Rate £3.90 per hour (from £3.70)



3. AUTO ENROLMENT PENSIONS RATE CHANGE

Just a reminder that the statutory minimum contributions to Auto Enrolment Pension Schemes increase again from April 2019.

Current minimums are;

Employer 2%, Employee 3%, Total 5%

From April 2019 these will increase to

Employer 3%, Employee 5%, Total 8%


4. PAYROLLING BENEFITS

If you are going to payroll benefits to avoid the P11D process from April 2019 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

HMRC will then strip out any benefits from employee tax codes for the new tax year. Benefits can then be taxed through the payroll ensuring that tax is paid in real time and making it more transparent for employees.


5. TERMINATION PAYMENTS

The introduction of employer NICs on termination payments above £30,000 will now take effect from April 2020.


6. EMPLOYMENT ALLOWANCE

This will remain unchanged for the 2019/20 tax year with the allowance of £3,000 for all companies (unless groups etc).

From April 2020 the relief will only be available for organisations whose NIC bill in the previous tax year was less than £100,000.


7. BLACK MOUNTAIN PAYROLL CLIENTS BACS REPORTS

As a BACS bureau Black Mountain pay many clients payrolls directly through the BACS system which is a safe, secure and time efficient way of making payments. As agents though, we do not have access to the exception reports that may be generated as a result of us sending a payroll file. These reports (normally AWACS or ARACS reports) need to be regularly reviewed within your organisation on a regular basis and passed to us for action.


For more information or guidance on any of the points included in this Payroll update, please contact us at payroll@blackmountainhr.co.uk

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