New employers have an instant start date for auto-enrolment duties
Any new employers that set up their business from October 2017 will not have a staging date, so their AE duties start as soon as they take on their first member of staff. Employers with instant duties will also need to complete a declaration of compliance within 5 months of their duties start date.
Automatic enrolment changes
On 6th April 2018, all employers will be required to increase the minimum contribution from the current level of 2% of qualifying earnings to 5%. Employers must contribute at least 2%.
No Employment Allowance for single director companies
From April 2016, single director companies will not be able to claim the Employment Allowance as it goes contrary to the policy of encouraging employers to employ more employees when these companies will not be doing so. This is on going for subsequent tax years.
PILON’s = Payments in lieu of notice
From 6th April 2018, all payments in lieu of notice, whether contractual or non-contractual – will be fully subject to a charge of tax and class 1 NICs.
This rule change is intended to end the confusion regarding the treatment of PILON’s that existed before 6th April 2018.
The change introduces the concept of ‘post-employment notice pay’ which represents the amount of basic pay the employee will not receive because their employment was terminated without full or proper notice given.
On 25th May 2018, the General Data Protection Regulation (GDPR) will be implemented in the UK. It will apply to personal data processed within the EU and to organisations outside the EU that supply goods and services to individuals within the EU. It is no longer adequate to say you comply with the regulations, you will be required to demonstrate it and appoint a data protection officer within your organisation, no matter how small. Transferring information by email will no longer be acceptable, unless it is encrypted.
Payrolling Benefits in Kind
PAYE legislation is changing. If you intend to or already payroll benefits and expenses you must register them with HMRC before 6th April 2018 using their new online Payroll Benefits in Kind (PBIK) service for 2018-2019 tax year. If you use this service and tax your employees’ benefits and expenses through payroll you won’t have to report them on a P11D. This will be on going for subsequent tax years i.e. you need to register before the start of the tax year.
Student Loan Deductions
From 6th April 2016 there will be an additional loan deduction – the original Student Loan will be known as Plan Type 1 with an Earnings Threshold of £17495.
The new Loan type will be Plan Type 2 with an Earnings Threshold of £21,000. P45 will not be changed but a revised Starter Checklist will ask the questions on this – if employee doesn’t know which type they are paying then employers must use Plan Type 1 until HMRC inform otherwise. Student Loan % = 9.
All dispensations cease on the 5th April 2016 and are replaced by Expenses exemption except for Benefits which are payrolled and detailed in the in the Payrolling Benefits in Kind section. Employers need to decide what does not need to go on a P11D as a business expense and ensure they have an expense policy.
Payrolling Benefits in Kind 2016/17
Optional for employers to decide i f t hey wish to payroll t heir Benefits in Kind (BIK) for the 2016/17 Tax Year. All BIK’s can be payrolled apart from Living Accommodation, Credit Cards & Vouchers, and Beneficial Loans. Employers must have registered with HMRC before 5th April 2016 in order to do this for the 2016/17 Tax Year.
Any current dispensation given by HMRC, to payroll BIK will cease on the 5th April and in order to continue employers will need to register with HMRC before the 5th April 2016. Once registered, employers can choose which benefits to payroll and which employees to exclude as they could be Long Term sick, Mat leave or on sabbatical with no pay or employee does not wish to have benefit payrolled.
Please inform your payroll contact if you decide to do this before pay period 01 of 2016/17 commences. This will mean no P11D or P46 Car for such employees in respect of 2016/17 onwards.
Child Care Vouchers
From early 2017 (date to be announced) no-one can enter into a CCV scheme. There will be a new Tax Free Childcare scheme which will not impact on employers. Where for every 80p the parents put into an account the Government will put in 20p.
National Living Wage
April 2016 April 2017 Adult rate (25 and over) £7.20 TBA