Support for staff and businesses affected by Coronavirus
The budget unveiled a £30 billion package to support the economy through the COVID-19 outbreak. SSP will now be available for eligible employees diagnosed with COVID-19 or for those who are unable to work because they are self-isolating. SSP will be payable from day one instead of day 4. The government will allow small and medium-sized businesses (less than 250 employees) to reclaim this SSP for up to 2 weeks. Employers should maintain records of staff absences, but employees will not need to provide a GP fit note. The government will work with employers over the coming months to set up the repayment plan as soon as possible.
Change in Employment Allowance
From April 2020 Employment Allowance needs to be claimed each tax year and included in the first Employer Payment Summary submission. Large companies and groups will no longer be eligible if the total NICS for 2019-20 are greater than £100,000.
Changes to IR35
From April 2020, employers that engage ‘off-payroll’ workers will become responsible for determining their employment status and paying NICs for those who are deemed to be employees.
Changes to calculating Holiday Pay
From 6th April 2020, the reference period for calculating annual leave increases from 12 to 52 weeks. This applies to all 5.6 weeks’ of a worker’s minimum holiday entitlement. If the worker has been employed for less than 52 weeks, their holiday pay is based on the number of completed weeks they have worked. This will only affect workers whose pay varies.
NICs on termination payments
From April 2020, the rules for income tax and employer national insurance contributions will be aligned so that employer contributions of 13.80% will be payable on termination payments over £30,000. Currently only income tax is payable on sums in excess of £30,000.
Statutory Bereavement Pay
From April 2020, Statutory Parental Bereavement Pay applies to employed parents (subject to meeting eligibility criteria) if they lose a child under the age of 18 or suffer a still birth from 24 weeks of pregnancy. SPBP is paid at 151.20 per week for up to 2 weeks taken in one week blocks. Parents may split the weeks blocks of leave for up to 56 weeks after the loss of their child. SPBP can be taken after other parental leave such as paternity or maternity pay.
Student loans 2020
From April 2020 the annual earnings threshold at which student loans repayment deductions are calculated will increase.
Plan 1 student loans will rise from £18,935 to £19,390.
Plan 2 student loans will rise from £25,725 to £26,575.
Workplace Pension Increases April 2019
The auto-enrolment contributions increase in April 2019. The minimum contributions increase from 2% to 3% for employers and from 3% to 5% for employees.
Itemised Pay Statements
From 6th April 2019 employers must now provide payslips to all workers, not just employees who work under a contract of employment. You must also now show the total number of hours worked for hourly paid workers clearly stating the hours they are being paid for.
New Postgraduate Loans
A new student loan for postgraduates starts in April. These can run alongside current student loans. The threshold is £21,000 per annum and the rate is 6%.
Farewell to the EYU
As of April 2019, HMRC will be extending the use of the Full Payment Submission (FPS) to enable payroll software to allow users to report revised YTD data beyond 19th April, following the end of the 2018-19 tax year. This means you won’t have to do an Earlier Year Update (EYU). Subject to your software functionality, during 2019 for the 2018-19 tax year the employer can choose which method they will use, however, HMRC will still accept an EYU return. From April 2020 the EYU will no longer be valid.
Closure of childcare vouchers
From 4 October 2018, new entrants can no longer join a childcare scheme and receive the associated benefits. As long as you continue to offer your voucher scheme, employees who joined before 4 October 2018 will still be able to use it. If you continue to offer your voucher scheme and employees join after 4 October, you will need to deduct tax and NIC on any vouchers given and pay employers NIC. However, if these employees meet the tax-free childcare eligibility criteria, they will also be able to open an online tax-free childcare account. You must stop giving childcare vouchers with tax and NIC relief to employees who join before 4 October if they wish to leave the scheme and start using tax-free childcare. Tax-free childcare was introduced in 2017 to help working parents with the cost of childcare. To be eligible, parents must earn at least the equivalent of 16 hours per week at the national minimum wage, have an eligible child (under 12 or 17 if disabled) and earn under £10,000 each per year.
The Help to Save scheme
This government backed UK scheme was launched in September. The scheme allows certain people on low income, who are entitled to working tax credit or receiving universal credit, to receive a bonus of 50 pence for every £1 they save into their Help to Save account over four years. The maximum that can be saved each calendar month is £50, but you don’t have to save every month. Savers can withdraw money from their account to their bank account. Bonuses, payable into the person’s bank account at the end of the second and fourth years, are based on the amount saved. Those choosing to close their account during the four-year life of their account lose bonus eligibility. The bonus after 2 years will be 50% of the highest balance saved and the final bonus will be 50% of savings above the highest balance in the first 2 years. Help to Save bonuses will not affect Universal Credit or housing benefit payments, and any savings or bonuses through Help to Save will not affect the amount of Working Tax Credit a person can receive.
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.
New employers with instant 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.
From 6th April 2018, all payments in lieu of notice (PILONs) – 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 PILONs 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.
Apprenticeship Levy for connected companies
If you have connected companies that together the pay bill is £3 million per year, then all companies are liable to pay the apprenticeship levy. You only have one apprenticeship allowance of £15000, but you can split the levy over the different companies. So, even the smallest companies when taken in isolation have a pay bill of under £3 million, will still pay the levy as they are a connected payroll. The levy should be calculated on each payroll individually and then depending on how the levy allowance has been split will affect how much each connected company has to pay.