UK Payroll News

Payment of Class 1A National Insurance and P11Ds
Class 1A National Insurance contributions cover most benefits and kind and if you have previously submitted P11Ds to HMRC, you will have received an end of year form P11D(b) requesting that you submit your return for 2023-24. You must submit forms P11D and P11D(b) for 2023-24 by 6th July 2024. Payment of Class 1A NICs must be paid by 19th July (by post) or 22nd July 2024 by electronic means to avoid penalties.

National Insurance contributions (NICs)
The government has announced a cut to the main rate of Class 1 employee NICs from 10% to 8% from‌‌‌ ‌‌6‌‌‌ ‌‌April 2024, and a further cut of 2 pence to the main rate of Class 4 self-employed NICs from 6‌‌‌ April‌‌‌ 2024, taking this to 6%.


Holiday Pay and entitlement consultation responses
In March 2024, the Department for Business and Trade published it’s responses to the two consultations ran earlier this year. The headline responses are:
* the government won’t proceed with proposals of a 52-week holiday entitlement reference period, and instead entitlement will be calculated as 12.07% of hours worked in a pay period for irregular/part-time workers only
* the 2 existing rates of holiday will be maintained and there won’t be a single annual leave entitlement created. This means workers will continue to receive 4 weeks at normal pay rate and 1.6 weeks at basic rate of pay
rolled-up holiday pay will be allowed, but for irregular/part-time workers only
This is great news for all administrators involved in calculating the holiday pay. We just need to wait for further guidance and documentation from the government about how this will work in practice.

Getting your new starter’s National Insurance number just got quicker
If your new starters are unsure where to find their National Insurance number, the quickest way to do so is by using the HMRC app or pay online.
Within minutes they can access their number, and get their National Insurance number confirmation letter if this is needed.
For future access, they can also add their National Insurance number to their Apple or Google wallet.

Statutory paternity pay and leave changes
Changes to statutory paternity pay and leave are due to take effect from 6th April 2024.
The amendments will introduce greater flexibility for fathers to create a more equal system of parental leave and pay, to promote gender equality. Notice requirements will be changed so they are more proportionate to the amount of time taken off. An employed father will be able to take paternity leave in two non-consecutive periods of one week or a two-week block within 52 weeks of the birth of the child. HMRC is estimating that updated guidance will be available in line with the changes to legislation by 8th March 2024.

New holiday pay calculations
Workers have the right to 5.6 weeks paid holiday whether they are full time, part time or under a zero hours contract. The amount of days a worker is entitled to will depend on multiple factors including hours worked and extra entitlement agreed, but they start accruing holiday from the day they start, including during their probation period, during sickness leave, maternity and paternity leave. The 5.6 weeks’ legal requirement comprises 20 days (pro-rata’d for part time workers) and 8 days (or pro-rata’d equivalent) to represent public or bank holidays. There is no requirement for workers to be guaranteed these specific public holidays off work, but the days do form part of statutory annual leave entitlement. The calculation will depend on an employee’s working pattern.

For Fixed Hours: A worker’s pay for a week.
For shift work with fixed hours: The average number of weekly fixed hours a worker has worked in the previous 52 weeks, at their average hourly rate
No fixed workers: A worker’s average pay from the previous 52 weeks (only counting weeks in which they were paid). If no pay was paid in any week, you must count back another week, back to a maximum of 104 weeks. If a worker has less than 52 weeks of pay, use the average pay rate for the full weeks they have worked.

New Health and Social Care Levy scrapped
The government have announced in-year reductions to National Insurance rates and the cancellation of the Health and Social Cate Levy as a separate tax, effectively reversing the uplift that was introduced in April 2022. This 1.25% reduction will take effect from 6th November 2022.

Change in employee National Insurance form July 2022
From 6th July 2022 the NIC earnings threshold changes for employees meaning they will pay less NIC. The weekly threshold increases from £190 to £242.

Closure of the coronavirus statutory sick pay rebate scheme
Eligible employers have been able to claim back up to 2 weeks’ worth of SSP if they have paid employees sick pay for coronavirus-related absence, but it has now been confirmed that claims can only be made for employees who were off work on or before 30th September 2021.

New Health and Social Care Levy to be introduced
The government has announced tax changes to fund £12 billion a year to be spent on the NHS and social care across the UK. National Insurance will increase by 1.25% for employees, employers and the self-employed for one year only from April 2022. From April 2023 a new Health and Social Care Levy of 1.25% will be introduced for all those who pay Class 1, 1A, 1B and Class 4 National Insurance and will also be extended to those over state pension age who are in work. The new levy will appear as a separate item on payslips and the National Insurance will revert to current levels.