Payroll Update Seminar - March 2017

Payroll Update SeminarKirsty Small, Payroll and Auto Enrolment Services Manager March 2017

pkf-francisclark.co.uk

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Housekeeping

Payroll Update

• Tax Allowances and threshold changes

• National Insurance threshold and rates

• Statutory Payment changes

• Auto Enrolment update

• Payrolling of Benefits

• Apprenticeship Levy

• Gender Pay Gap Reporting

• Other items



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Tax Allowances

Personal allowance increasing to £11,500

• Basic Rate 20%

• Higher Rate 40%

• Additional Rate 45%

Tax Threshold 2016-17 (£) 2017-18 (£) Change (£)Basic 0 – 32,000 0 – 33,500 +1,500

Higher 32,001 – 150,000 33,500 – 150,000 -1,500

Additional Over 150,000 Over 150,000 0


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Tax Codes

Standard tax code for 2017-18 1150L

• L Suffix codes + 50

• M Suffix codes + 55

• N Suffix codes + 45

Scottish Tax tables will be different from 6 April 2017


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National Insurance Thresholds

2016-17 (£) 2017-18 (£)Weekly Lower Earnings Limit (LEL) 112 113

Weekly Primary Threshold (PT) 155 157

Weekly Secondary Threshold (ST) 156 157

Upper Earnings Limit (UEL) 827 866

Upper Secondary Threshold for under 21s 827 866

Apprentice Upper Secondary Threshold (AUST) for under 21s

827 866


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Rates remain the same for 2017-18

• Below LEL – 0%

• LEL – PT – 0%

• PT – UEL – 12%

• Above UEL – 2%

• Above ST – 13.8%

Employment Allowance to remain at £3,000 per year

National Insurance Rates


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National Minimum Wage – April 2017

• Apprentices - £3.50

• Above school leaving age but under 18 - £4.05

• 18 to 20 - £5.60

• 21 to 24 - £7.05

National Living Wage (25 and over) - £7.50

Statutory Payments


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Statutory Sick Pay

SMP/SAP/SPP/ShPP increase to £140.98 from 2 April 2017

Statutory Payments

Daily rates

QDs in week 1 2 3 4 5 6 7

12.7642 7 12.77 25.53 38.3 51.06 63.83 76.59 89.35

14.8916 6 14.90 29.79 44.68 59.57 74.46 89.35

17.8700 5 17.87 35.74 53.61 71.48 89.35

22.3375 4 22.34 44.68 67.02 89.35

29.7833 3 29.74 59.87 89.35

44.6750 2 44.68 89.35

89.3500 1 89.35


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Student Loans

• Plan 1

• Loan taken before September 2012

• Threshold increased to £17,775

• Plan 2

• Loan taken from September 2012 and home address in England and Wales

• Threshold remains at £21,000

Statutory Payments


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• Earnings Trigger to remain at £10,000

• Qualifying Earnings Band to increase inline with National Insurance bands

Auto Enrolment Update

Threshold 2016-17 2017-18QEB Lower Limit £5,824 £5,876QEB Upper Limit £43,000 £45,000


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12 months before staging:

• Check your staging date

• Assign responsibility

• Check who you will need to enrol

6 months before staging:

• Choose a pension scheme

• Work out your costs

Auto Enrolment


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At staging date:

• Assess and enrol staff

• Issue communications to staff

• Know your ongoing duties

After your staging date:

• Complete the Declaration of compliance

Auto Enrolment


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Ongoing duties:

• Continue to assess your workforce

• Refund opt outs

• Enrolling new eligible jobholders

• Keep adequate records

• Process Leavers

• Upload data to pension provider

Auto Enrolment


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Assessing the workforce

Auto Enrolment

Age 16 - 21Age 22 –

State pension age

State pension age

- 74Earnings above £10,000

Eligible jobholders

Earnings over £5,876 up to £10,000

Non-eligible jobholders

Earnings of £5,876 or less Entitled workers


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Triennial Review:

• Select re-enrolment date three months before or after third anniversary of original staging date

• Automatically re-enrol eligible jobholders into qualifying pension scheme

• Write to eligible jobholders within six weeks

• Re-declaration of compliance no later than two months after re-enrolment date

Auto Enrolment


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• Voluntary from April 2016

• Employers register to voluntary before start of the tax year

• What cannot be payrolled?

- vouchers and credit cards

- living accommodation

- beneficial/interest free and low interest loans

Collection and payment of Class 1A not in real time.

Payrolling of Benefits


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Example 1 – Private Health Insurance

• 7 months at £40 per month = £280

• 5 months at £50 per month = £250

• Taxed through payroll as a notional payment

• No Class 1 NICs due

• Class 1A employer NICs paid in the following July



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Example 2 – Store Vouchers (non-cash voucher)

• Cost of voucher = £300

• No PAYE settlement agreement

• Taxed through payroll as a notional payment

• Class 1 NICs due

• No Class 1A employer NICs



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Example 3 – Reimbursed employee

• Employee pays garage bill – own car

• Claims reimbursement through expenses

• No business miles

• Subject to tax and NICs through the payroll

• Possibly grossed up



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Levy will be payable by all employers who have a ‘paybill’ of £3 million

• £15,000 allowance

• Can be shared amongst a group of companies

• Calculated on the earnings that attract Class 1 secondary NICs at 0.5%

• Reported to HMRC via an EPS – Year to date, Tax month and Annual Apprenticeship Levy allowance

Apprenticeship Levy


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Example 1

Apprenticeship Levy

Month 1 Month 2 Month 3Paybill £500,000 £400,000 £800,000

AL sum: (0.5% x paybill YTD) £2,500 £4,500 £8,500Offset £1,250 £2,500 £3,750APL Payment £1,250 £750 £2,750

EPS Reporting:AL YTD £1,250 £2,000 £4,750Tax month 1 2 3Annual AL Allowance £15,000 £15,000 £15,000


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Example 2

Apprenticeship Levy

Month 1 Month 2 Month 3Paybill £200,000 £200,000 £800,000

AL sum: (0.5% x paybill YTD) £1,000 £2,000 £6,000Offset £1,250 £2,500 £3,750APL Payment £0 £0 £2,250

EPS Reporting:AL YTD NTR NTR £2,250Tax month 1 2 3Annual AL Allowance NTR NTR £15,000


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A company within the private and voluntary sectors with an employee base of 250 or more will need to publish their gender pay gap annually

• Mandatory reporting from April 2017

• First full publication by April 2018

• Snapshot report of previous data by April 2017

Take advice on what to report!

Gender Pay Gap Reporting


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Must publish six calculations• Average gender pay gap as a mean average

• Average gender pay gap as a median average

• Average bonus gender pay gap as a mean average

• Average bonus gender pay gap as a median average

• Proportion of males receiving a bonus payment and proportion of females receiving a bonus payment

• Proportion of males and females when divided into four groups ordered from lowest to highest pay

Gender Pay Gap Reporting


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The new Tax Free childcare will commence April 2017, the existing Childcare Voucher scheme is open to new joiners until April 2018

• Parents open an online account, per child

• Receive 20p (maximum of £2,000) for every 80p saved

• Will be able to pay registered providers directly through account

Tax Free Childcare


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Who Gains with the new scheme?

• Single parents with annual costs at or above £5,000

• Working couples with annual costs at or above £9,500

• Self-employed couples

Tax Free Childcare


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Who Loses with the new scheme?

• Single child couples

• Couples where one parent is not working

• Where either parent earns over £100,000 per annum

• Families with minimal childcare costs

• EMPLOYERS! – no intervention from payroll and so no National Insurance relief

Tax Free Childcare


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Real Time Information - update:

• Year end deadline 19 April 2017

• Penalties for late payment and late submission

• FPS Changes – reporting payrolled benefits of company cars

• EPS Changes – Apprenticeship Levy

• EYU – change on the horizon?

Other Items


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Holiday Pay - Watch this space!

Salary Sacrifice:

• Exempt from new rules April 2017

- Pensions

- Childcare vouchers and workplace nurseries

- Cycle to work

- Cars with emissions at or under 75 CO2/km

Other Items


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Questions?

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Payroll Update Seminar - March 2017

Business

Transcript of Payroll Update Seminar - March 2017