Businesses are being advised to prepare early for the changes on 1st April 2016 when the new law becomes law for employees 25 years of age and over.
1. Find out which staff are eligible for new rate
2. Know the correct rate of pay - £7.20 for staff aged 25 and over
3. Update the company payroll for 2016
4. Communicate the changes as soon as possible
1. BrightPay is HMRC recognised
2. RTI is fully automated
3. BrightPay will automatically import your HMRC Basic PAYE Tools data
4. BrightPay will handle all auto enrolment tasks (at no extra cost)
5. BrightPay includes the NEST API, meaning the upload of auto enrolment data is automated
6. BrightPay will perform a pre staging assessment of your workforce to establish how much auto enrolment is going to cost and to determine if you need to register with a pension scheme
7. Payslips can be emailed to employees and will contain details of any pension deductions
8. You can use postponement, giving you more time to get a pension scheme in place
9. BrightPay is free for up to 3 employee records or £89 plus VAT per annum for a single employer with unlimited employees
10. Support is included in this price
This list is not exhaustive and only covers the key points.
The Government has announced plans to adjust, by about 6 months, the date on which the minimum pension contribution levels increase.
Phase 2 (when the minimum contributions increase to 3% employee and 2% employer) was scheduled for 1st October 2017 and phase 3 (when they increase to 5% employee and 3% employer) was scheduled for 1st October 2018.
Phase 2 will now start on 6 April 2018† and phase 3 will start on 6 April 2019† (†subject to parliamentary approval). This is not a delay to the roll out of automatic enrolment, but a measure to give all employers, and smaller employers in particular, more time to prepare for the increases and to reduce the administrative burden by aligning the changes with the start of each tax year.
This change will also make it considerably easier for payroll software to deal with the uplifts as they are now aligned to payroll years.
HMRC have announced the tax rates, tax credit rates and thresholds for the 2016-17 tax year.
Tax Rates and Tax Bands
There are no changes in the basic rate, higher rate or additional rate of taxes at 20%, 40% and 45% respectively.
The basic rate band has increased by £215 from £0-£31,785 in 2015-16 to £0-£32,000. The higher rate has increased from £31,786-£150,000 to £32,000-£150,000 where the additional rate remains at over £150,000.
From 2016-17 onwards, all individuals will be entitled to the same personal allowance, regardless of the individuals’ date of birth. This personal allowance is £11,000, an increase of £400 from 2015-16. The income limit for personal allowance remains at £100,000.
The marriage allowance has increased £40 from £1,060 to £1,100. There have been other allowances such as a dividend allowance and personal savings allowance introduced for the 2016-17 tax year.
National Insurance Contribution Thresholds
There are no changes to the weekly lower earnings limit (LEL), weekly primary threshold or the weekly secondary threshold. The upper earnings limit (UEL) has increased from £815 in 2015-16 to £827 in 2016-17. There are no changes to the Class 1 National Insurance contribution rates for 2016-17.
The Employment allowance has increased by £1,000 to £3,000 for 2016-17 per employer for the tax year.
The details in full are available to view on the HMRC website with the following link:
Single-director companies will not be eligible to claim the National Insurance Contributions Employment Allowance for the new tax year 2016-17. The employment allowance for the new tax year 2016-17 will be £3,000, an increase from £2,000 from 2015-16.
A Technical Consultation on Companies Excluded from the NICs Employment Allowance has been published to seek comment on the draft secondary legislation to implement the new exclusion. The consultation will run until 3rd January 2016.
The main reason for this change is to make the Employment Allowance more focused on businesses that are creating and sustaining employment and as a result where a director is the sole employee of a limited company this company is excluded from availing of the Employment Allowance. These regulations will apply in England, Wales, Scotland, and Northern Ireland.
Figures from The Pensions Regulator (TPR) show 469 auto-enrolment compliance notices were issued to employers between July and September 2015.
A compliance notice is issued under section 35 of the Pensions Act 2008 to remedy a contravention of one or more auto-enrolment employer duty provision
The latest number is almost quadruple that for the previous quarter. In addition, during the last quarter TPR issued 85 unpaid contributions notices, 107 fixed penalty notices of £400, and two escalating penalty notices carrying a daily fine of between £50 and £10,000 – bringing the total of escalating penalty notices issued to seven.
Full article www.payrollworld.com