Apr 2015
16
UK - Employment Allowance now extended to Personal Carers
With effect from 6th April 2015, the Employment Allowance has now been extended to include individuals who employ personal carers and support workers. Such individuals who were previously excluded from claiming the allowance in tax year 2014-15, will now be entitled to deduct up to £2,000 per annum from their liability to pay secondary Class 1 Employer National Insurance contributions (NICs).
The new measure is intended to support individuals who need to purchase care for themselves or others.
To check eligibility and for further information about the Employment Allowance, simply go to Employment Allowance Eligibility.
Apr 2015
8
Shared Parental Leave comes into force
Shared parental leave has now officially come into effect, meaning parents whose babies are born, or whose children are adopted, on or after 5th April 2015 will now be able to share a 50-week pot of leave.
285,000 working couples a year are expected to be eligible for shared parental leave, according to the Department for Business Innovation and Skills.
How does it work?
· Eligible couples will be able to share parental leave if the mother opts to end her maternity leave and pay early
· Both parents can be off work at the same time or can take turns to take time off to look after the child.
· The leave can be taken in discontinuous blocks if required and each parent is permitted to submit three separate notices to book this
Statutory shared parental pay will be paid at the rate of £139.58 a week or 90% of average weekly earnings, whichever is lower
Who is eligible?
To qualify for Statutory Shared Parental Pay, one parent must be an employee and must pass the continuity of employment test (they must have worked for the same employer for at least 26 weeks at the end of the 15th week before the week in which the child arrives), whilst the other must meet the employment and earnings test (must have worked for at least 26 weeks in the 66 weeks leading up to the due date and have earned above the maternity allowance threshold of £30 week in 13 of those weeks).
Eligibility can be checked using GOV.UK’s quick and easy online tool.
BrightPay 2015/16 has full support for Shared Parental Leave and Statutory Shared Parental Pay (ShPP). For assistance with recording shared parental leave and processing ShPP in BrightPay, please view our dedicated support topic on Statutory Shared Parental Pay.
Feb 2015
26
Countdown to Shared Parental Leave begins
There are just six weeks to go until mothers and fathers with babies due on or after 5 April 2015 can start sharing up to 50 weeks of parental leave.
285,000 working couples a year are expected to be eligible for Shared Parental Leave (SPL), with parents giving their employers 8 weeks’ notice of the pattern of leave they intend to take.
To help parents understand their rights and responsibilities, BIS and Acas have shared the following tips when considering Shared Parental Leave:
- the first thing to do is make sure you are eligible for Shared Parental Leave. Eligibility can be checked using this quick and easy online tool.
- talk to your partner before speaking to your employer. The combinations are flexible so make sure they fit around your life and work for you as a couple. Maybe you want to double up in the early days for extra support or you might decide to tag-team halfway through – the choice is yours.
- have the conversation with your employer as early as you can. The sooner you do, the easier it will be to make plans for your time away from the work. Remember you have to give your employer at least 8 weeks’ notice of your intention to take Shared Parental Leave.
- check to see if your employer offers an enhanced package (a package over and above statutory), and if they do, what type of package it is.
- most importantly, know your rights. No employers can opt out of Shared Parental Leave if you are eligible.
Feb 2015
24
Marriage Allowance
HMRC have this week released more details on how the Marriage Allowance (previously referred to as Transferable Allowances for Married Couples and Civil Partners) will operate from April 2015. The allowance means a spouse or civil partner who does not pay tax, or does not pay tax above the basic rate of income tax, can transfer up to £1,060 of their personal tax-free allowance to a spouse or civil partner, as long as the recipient of the transfer does not pay more than the basic rate of income tax. This could represent a saving of up to £212 per year for eligible couples.
Registering for marriage allowance is simple and quick – and it is all done at www.gov.uk/marriage-allowance. There’s guidance for couples to check their eligibility for the new allowance, and registration only takes about three minutes. From April, HMRC will begin inviting those customers who have registered their interest to be among the first to apply using the new online service. Customers who choose not to register early, however, will not lose out. Instead, they will be able to make an application later in the 2015-16 tax year and still receive the full annual allowance.
To support the change, both the transferor and recipient’s tax codes will be amended. This will in turn introduce two new tax code suffixes as follows:
• 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
These new tax suffixes will not be used on tax codes prior to April 2015, but will be used on P6 coding notices from April and, in due course, P9 and P9X uprating notices.
For more information on the above, HMRC’s announcement ‘Registration opens for new married couples tax break’ can be viewed at:
https://www.gov.uk/government/announcements?departments%5B%5D=hm-revenue-customs.
Feb 2015
10
Transferable Personal Allowance – will you benefit?
On 6th April 2015, a new tax break will come into effect which is expected to benefit four million married couples in the UK.
The new measure will allow a spouse or civil partner who is not liable to income tax above the basic rate to transfer up to £1,060 of their personal allowance to their spouse/civil partner, provided that the recipient of the transfer is not liable to income tax above the basic rate.
The transferred personal allowance will primarily benefit single earner households, where the personal allowance of a non-earning spouse was previously wasted, and will act as a tax reducer for the recipient with a reduction in income tax of up to £212.
Married couples or civil partnerships who are eligible to claim the Married Couples Allowance i.e. at least one of the spouses or civil partners was born before April 6, 1935, however, will not be able to make a transfer.
Additionally, it will not be available to non-UK domiciled individuals who elect to pay tax on the remittance basis of taxation or non-UK residents who would be higher or additional rate taxpayers if their worldwide income was within the scope of UK tax.
A simple online eligibility checker and initial registration process is due soon from the HMRC.
Feb 2015
2
Employers fined by The Pensions Regulator over auto-enrolment failures
More than 160 employers were issued with fixed penalties of £400 last year after The Pensions Regulator (TPR) ramped up the use of its powers for auto-enrolment failures.
166 businesses were issued with fines in the last quarter of last year, compared to only three firms receiving penalties in the previous nine months. This increase coincided with a bulge in the number of medium-sized firms obliged to complete auto-enrolment last year.
There was also a surge in the number of compliance notices issued in the final quarter at 1,139, compared to 163 between July and September 2014. Employers are obliged to a submit a formal document, known as a declaration of compliance, to the regulator within five months of the firm's start date for the auto enrolment process.
The Pensions Regulator spokesman, Charles Counsell, has made it clear that it expects more firms to be fined as the enrolment process gathers momentum. "The number of employers approaching the date when they must confirm that they have complied with new workplace pensions duties (known as a declaration of compliance) is now beginning to rise significantly," he said. "With the mass market roll out of automatic enrolment to large numbers of small businesses in the coming months, we expect to see an increase in how often we need to use our powers."
The main reason for not signing up employees to a pension scheme on time seems to be that some employers have just not given themselves enough time to prepare. The regulator recommends that firms start planning at least a year before their staging date for beginning their auto-enrolment process.
Jan 2015
23
Automatic enrolment - Look out for a letter from The Pensions Regulator!
The Pensions Regulator will be issuing a one-off letter to all small and micro employers between the end of January and May 2015 to ensure they know when their new workplace pension duties start.
The letter will provide key information such as their PAYE reference number, the date the law applies to them and the process through which they can provide a nominated contact to the regulator to receive regular, useful and relevant information in the run up to the date at which they need to comply with their duties.
Approximately five million workers have already been automatically enrolled by nearly 43,000 employers. In the coming months and years, another 4 million workers will be automatically enrolled by small employers across the country. Small employers are those with fewer than 50 workers.
You can find out your staging date at any time by simply entering your PAYE reference into the Pension Regulator’s staging date calculator.
Jan 2015
20
Calculating Holiday Pay – Updated Guidance
In light of a number of recent court judgements and the resulting changes to regulations, Acas has updated their holiday pay guidance to assist employers in calculating holiday pay.
Several key points that employers should be aware of:
- Guaranteed and normal non-guaranteed overtime should be considered when calculating a worker's statutory holiday pay entitlement but there is currently no definitive case law that suggests voluntary overtime needs to be taken into account.
- Commission should be factored into statutory holiday pay calculations.
- A worker's entitlement to holiday pay will continue to accrue during sick leave (both paid and unpaid). If a worker is unable to take their annual leave in their current leave year because of sickness, they should be allowed to carry that annual leave over until they are able to take it, or they may choose to specify a period where they are sick but still wish to be paid annual leave at their usual annual leave rate.
- There are different rules for calculating holiday pay depending on the working patterns involved: (a) For workers with fixed working hours - If a worker's working hours do not vary, holiday pay would be a week's normal remuneration. (b) For workers with no normal working hours - If a worker has no normal working hours then their holiday pay would still be a week's normal remuneration but the week's pay is usually calculated by working out the average pay received over the previous 12 weeks in which they were paid. (c) For shift workers - If a worker works shifts then a week's holiday pay is usually calculated by working out the average number of hours worked in the previous 12 weeks at their average hourly rate.
- Workers must take their statutory paid annual leave allowance and can only be 'paid in lieu' for this when their employment ends. While workers are in employment, 5.6 weeks of their annual leave (this is the amount all UK workers are statutorily entitled to) must be taken and cannot be 'paid off'. Anything above the statutory allowance may be paid in lieu but this would depend on the terms of the contract. When a worker's employment is terminated, all outstanding holiday pay that has been accrued but not taken (including the statutory allowance) must be paid.
- Work-related travel may need to be factored into statutory holiday pay calculations.
The Government has also introduced regulations to take effect from 1 July 2015 to limit and clarify the maximum amount of back-dated holiday pay that can be claimed. The change will mean that when making claims for a series of backdated deductions from wages, including any shortfall in holiday pay, the period that the claim can cover will be limited to a maximum of 2 years.
Further information in addition to the above can be found on the ACAS website at holiday pay guidance.
Dec 2014
3
Student Loan threshold to increase from 6 April 2015
The Department for Business, Innovation and Skills has confirmed that from 6 April 2015, the Student Loan threshold will rise by 2.5% to £17,335. The current threshold for 2014/15 is £16,910.
On a ‘per pay period’ basis, the £17,335 threshold for 2015/16 can be estimated as follows:
- £333.67 weekly
- £1,444.58 monthly
This new threshold will apply to all current borrowers for whom employers make Student Loan deductions.
BrightPay 15/16 will automatically calculate and apply the appropriate student loan deduction as per the new 15/16 Student Loan Deduction Tables.
Nov 2014
20
Important National Insurance changes from 6 April 2016
The Department for Work and Pensions has published new guidance for both employers and employees on the ending of contracting-out of the additional State Pension.
This guidance explains the changes being made to the State Pension for people who will reach State Pension age on or after 6 April 2016.
If you are one of the 2,500 private sector employers who offer a salary related pension scheme, your employees are likely to be “contracted-out” of the additional State Pension. If so, you and your employee may pay National Insurance contributions at a lower rate because you get a National Insurance rebate.
On the 6 April 2016, the new State Pension will replace the existing basic and additional State Pension and will bring to an end contracting-out and the National Insurance rebate.
This means that from April 2016, you and your employees will pay the standard rate of National Insurance contributions instead of the contracted-out rate. For employers, the standard rate of National Insurance is 13.8% of all earnings above the secondary threshold for all employees and they will no longer receive the 3.4% National Insurance rebate.
The 1.4% National Insurance rebate for those employees in contracted-out schemes will also end. This means employees will pay the standard rate of National Insurance instead of a lower rate.
Employers who currently offer a salary related pension scheme and who will be affected by the changes are advised to speak to their pension advisor or scheme trustees to explore possible options available to them before the changes are brought in.
The Department for Work and Pensions’ guidance on this topic can be found at:
