With the new tax year approaching fast our Payroll news for 2021 is a summary of information that will affect your payroll in 2021/22. Please take a moment to check the details as action may be needed immediately.
The personal allowance will increase from £12500 to £12,570 per annum. All employees on an “L” tax code should have it increased by 7 by the first payday after 6th April 2021. eg 1250L becomes 1257L. Any Week1/Month1 marker should be removed.
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 2020/21 tax-year.
National Minimum Wage (NMW)/Living Wage (LW).
The new rates will be as follows noting that the 25+ group has now been extended to include 23-24 year olds for the first time. :-
Living Wage 23 and over……………………..£8.91 per hour
Aged 21 to 22…….. …………………………….. £8.36 per hour
Aged 18 to 20 inclusive……………………….£6.56 per hour
Aged 16 to 17 ……………………………………. £4.62 per hour
Apprentices aged under 19………………..£4.30 per hour
Approved 19 & over but in their first
year of apprenticeship…………………………£4.30 per hour
We would recommend that you review all of your employees’ wages and salaries to ensure that you are meeting the NMW
This will hopefully remain at £4000 for 2021/22 , but no announcement has been made at the time of writing. It 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 £967 per week.
There is also an Apprentice Upper Secondary threshold for under 25’s. The value of this is the same as UST at £967 per week.
The Primary Threshold for National Insurance
This will increase to £797 per month or £9568 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 20 to 5 April 21 before 10 April 21.
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.
Statutory Payment Rates
The new standard rates of Statutory Payments for the tax year beginning 6 April 2021 have been announced and are as follows:
Statutory Sick Pay will be £96.35 per week. This is not recoverable by employers.
Maternity Pay, Adoption Pay, Paternity Pay and the Shared Parental Pay will be £151.97 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 £120 per week.
Workplace Pensions Re-enrolment
Many of you will be reaching the third or even sixth year anniversary of your pension stage date. This is a legal duty where employers need to 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.