We have summarised some key changes to payroll below for your information. If you wish to discuss any of these further please contact Kelly at our Ledbury office.
National Living Wage (NLW)
From April 2016, the Government has introduced a new mandatory NLW for workers aged 25 and over. Initially this will be set at £7.20 per hour, an increase of 50p to the current National Minimum Wage (NMW) rate. This is equivalent to £910 per annum for a full time worker on current NMW. The NLW is planned to rise to over £9 per hour by 2020.
Employment Allowance and Sole Directors
The Employment Allowance (EA) rises from April 2016 from £2,000 to £3,000, which reduces the amount of Employer National Insurance a business or charity will pay.
To focus the allowance on businesses and charities which support employment, from April 2016 companies, where the Director is the sole employee he/she will no longer be able to claim EA.
Tax Free Personal Allowance
The tax free personal allowance (the amount a worker can earn before they start paying Income Tax) will increase to £11,000 from April 2016, from £10,600 for 2015/16.
From April 2016, the threshold for repaying student loans will be increased to £17,495, however, this will now only apply to pre-September 2012 Income Contingent Student Loans (also known as Plan 1 loans).
The threshold will be a higher figure of £21,000 and calculated and deducted from the payroll for post September 2012 loans, whereas this could only be paid directly to the student loan company before.
National Insurance for Apprentices
From April 2016, employers of apprentices under the age of 25 will no longer be required to pay employer National Insurance contributions on earnings up to the Upper Earnings Limit for those employees.
Automatic Enrolment (Work place pension)
During 2016 and 2017, there will be over 1.8 million employers staging for Auto Enrolment. All employers should by now be aware of their staging date and a handful have already passed this and have gone through the Auto Enrolment process.
It is key that employers are prepared for Auto Enrolment and start the process as early as possible. Please get in touch if you require any assistance.
We are pleased to confirm that Kelly has returned to work from her maternity leave and will be in charge of our Payroll Bureau services. Joe will continue to assist Kelly as part of our payroll team, based in the Ledbury Office.