With the New Tax Year approaching fast we thought you may like to receive a reminder of things which may affect you regarding wages in 2019/20
The personal allowance will increase from £11,850 to £12,500 per annum. All employees on an “L” tax code should have it increased by 65 by the first payday after 6th April 2019. eg 1185L becomes 1250L. Any Week1/Month1 marker should be removed.
M codes increase by 71 and N codes by 59.
It would be prudent to review your employee list and raise a P45 for anyone who you are not going to carry forward into the new tax year. This should be done before your payroll is completed for the 2018/19 tax year.
National Minimum Wage (NMW)/Living Wage (LW)
From 1st April 2019 NMW and Living Wage changes will now both be updated from 1 April each year.
The new rates will be as follows :-
Living Wage 25 and over…………………………….. £8.21 per hour
Aged 21 to 24…….. ……………………………………….£7.70 per hour
Aged 18 to 20 inclusive………………………………..£6.15 per hour
Aged 16 to 17 …………………………………………….. £4.35 per hour
Apprentices aged under 19………………………….£3.90 per hour
Approved 19 & over but in their first year of
apprenticeship…………………………………………… £3.90 per hour
We would recommend that you review all of your employees’ wages and salaries to ensure that you are meeting the NMW.
From April 2019 the legal right to have an itemised payslip will be extended to include employees and all other workers. These will also need to show the number of hours worked where this varies month to month.
This will remain at £3000 for 2019/20 and continues to be unavailable to schemes where the only employee is a sole director.
Employers NIC for Employees under 21
Employers will not be required to pay Class 1 Secondary Threshold NI contributions on earnings up to the Upper Secondary Threshold (UST) for employees who are under the age of 21. Class 1 secondary NICs will however continue to be payable on all earnings above the UST. The value of both the UST and the Upper Earnings limit will be £962 per week.
There is also an Apprentice Upper Secondary threshold for under 25’s. The value of this is the same as UST at £962 per week.
The Primary Threshold for National Insurance
This will increase to £719.00 per month or £8632 per annum.
This remains unchanged at £15,000 per annum per employer.
Construction Industry Scheme
If you have a Limited Company which is registered for CIS you are able to offset any CIS suffered during the year against your PAYE/NI liabilities. It is therefore vital that, if we do your payroll, you ensure that we have had details of all CIS suffered from
6 April 18 to 5 April 19 before 10 April 19.
We can then ensure that the correct figures are included on the final submission of the year to HMRC and that, if they owe you a refund we can request it on your behalf as early as possible.
Filing Penalties for PAYE schemes with 49 or fewer employees
It is vital to ensure that your wages submissions, e.g. FPS and/ or EPS, are received by HMRC in plenty of time each month. The penalties can be between £100 and £400 per month dependant on the number of employees in your scheme.
If we process your wages for you, all you need to do to avoid this, is to get your payroll information to us in good time each month and we will do the rest.
Payment of PAYE/NIC Liabilities
Please be aware that payment of PAYE/NIC liabilities must be with HMRC before the 19th of each month (or 22nd if paying electronically). You must make allowances for when these dates fall on weekends or Bank holidays as late payments will incur penalties and interest charges.
Statutory Payment Rates
The new standard rates of Statutory Payments for the tax year beginning 6 April 2019 have been announced and are as follows:
Statutory Sick Pay will be £94.25 per week. This is not recoverable by employers.
Maternity Pay, Adoption Pay, Paternity Pay and the Shared Parental Pay will be £148.68 per week. Small employers can recover 100% of this plus an additional 3% compensation rate.
The earnings threshold for entitlement to all Statutory Payments will be £118 per week.
We have now passed the “easy in” phase and all eligible employers should now have staged.
If you start up a new business, and a new PAYE scheme, your pension responsibilities will start straight away. It is therefore vital that you take advice regarding workplace pensions in advance of employing anyone.
New Contribution Rates Increases
These will apply for the first payment period under workplace pensions after 6 April 2019.
The employer contribution rate will increase from 2% to 3% and the worker contribution rate will increase from 3% to 5%.
These are the minimum contributions required by law and we would recommend that you inform your employees of these imminent changes.
Many of you will be reaching the third year anniversary of your pension stage date. This is a legal duty where employers need to choose their re-enrolment date, assess their staff to see who needs to be put back into a pension scheme and write to those staff effected.
You then need to complete and submit a re-declaration of compliance to the Pension Regulator.
If we process your payroll for you, we will deal with the re-enrolment for you.
Please take note that the Pension Regulator is taking a very hard stance where employers are deducting pension contributions from employees but not paying these to the Pension Fund.
They may issue you with an Unpaid Contribution Notice. This will require you to pay the missing amounts by a certain date, possibly with interest added.
Alternatively TPR may issue a Civil Penalty. This could be up to £5,000 in the case of an individual and up to £50,000 for an entity.
If you are persistantly non-compliant you could face a criminal prosecution and ultimately a prison term of up to 2 years.
If you have any queries with regard to payroll or workplace pensions please do not hesitate to contact us, either by calling on 01237 472071 or by email [email protected]