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Important Information and changes regarding your payroll for the Tax Year ending 5^th April 2022

Below we have highlighted key changes in respect of the running of your payroll for the current tax year

• Statutory Allowances- The following changes take place on 6^th April 2021 –
  • The basic tax code increases to 1270L
  • Statutory Sick Pay increases to £96.35 per week
  • Statutory Maternity/Paternity pay increases to £151.97
  • The limit at which you start paying NIC is £184 pw/£797 pm
  • The lower earnings limit rate at which SSP/SMP/SPP is eligible £120 per week

• Holiday Allowances – The minimum annual holiday entitlement is 28 days per annum including banking holidays for someone working a 5-day week.

• Employment Allowance – HMRC have kept the £4000 NIC Employment allowance the same, which means businesses can claim up to £4000 per annum off their Employers NIC, we will automatically claim this up to £4000 or your total Employers NIC.

• Employer NIC for under 21’s – Employers with employees under 21 years old will no longer have to pay Employers NI Contributions on earnings up to £962 per week.

• Minimum Wage – The current rates for minimum pay are as follows: –
  • Apprentice Rate £4.30 ( for apprentices under 19 and apprentices 19 and over in the first year of apprenticeship)
  • Under 18 years £4.62
  • 18-20 years £6.56
  • 21-22 years £8.36
  • 23 years and over £8.91

• Directors Wages – The monthly salary for Director only payroll schemes stay at £791.00 per month.  For companies who employ other members of staff and can make use of the Employment Allowance, these wages will be £1042 per month. If you would like to alter this amount, please get in touch ASAP and we can discuss the options for you.

• Real Time Information – With RTI being in place, it is essential for you to contact us immediately regarding any changes in your payroll.  Once we have processed the wages, monthly or weekly, we then have to submit a full payment submission (FPS) to HMRC on or before every pay day and we will do this on your behalf.  If we do not have accurate information, it could result in wrong information being sent to HMRC, which could flag up a reason for investigation by HMRC.

• Penalties – From 6^th April 2017, HMRC introduced penalties for each tax month in which one or more real-time PAYE reports for a scheme are late.  Penalties can be between £100 and £400 per month depending on the number of employees.  Please let us have information before the pay date as this will incur you penalties, which we will not be liable for.

• Because of RTI, we will not be able to backdate or alter wages once they have been processed unless you accept that penalties may be incurred.

• CIS Tax – For any Limited Company that has CIS tax suffered, we still must submit an EPS monthly, to inform the tax office of the amount you have had deducted.  Otherwise you may receive a bill from HMRC for the tax and NI due relating to the employees that have been paid in the same month. Consequently, we need to be informed of any CIS deductions no later than the 5^th of the following month.

• Pension Contributions – Auto-enrolment pension contributions will remain as below.
  • Employer Minimum Contribution 3%
  • Employee Minimum Contribution 5%

• Student Loan and Postgraduate Loan Recovery – If your employees’ earnings are above the earnings threshold, you need to record their student loan and postgraduate loan deductions in your payroll software.  The rates of repayment are as follows: –
  • Student Loan Plan 1 – £382.59 p/w – 9%
  • Student Loan Plan 2 – £524.09 p/w – 9%
  • Postgraduate Loans – £403.84 p/w – 6%

• Mileage Allowances – the current annual tax free rates for paying employees mileage allowance are as follows: –

                           45p up to 10000 miles and then 25p for any miles over