There are 4 key things you and your business need to be aware of this April:
1. Employment Allowance
Don’t miss your chance to claim the new Employment Allowance – The Government have introduced the new tax cut for businesses and charities and could take up to £2,000 off your employer National Insurance Contributions (NICs) from 6th April 2014.
The allowance will be available to eligible businesses and charities, regardless of size and can be claimed back through your payroll processes by notifying HMRC you are claiming this on your RTI submissions. Claims can be made up to 4 years from the date the allowance applies.
The Employment allowance is only applicable to employer class 1 NICs and cannot be used against Class 1A, Class B NICs or offset against late payment penalties or interest.
There is only one allowance per employer, no matter how many PAYE schemes you operate. If you operate more than one company, you can choose which scheme takes advantage of the allowance.
The new Employment Allowance is intended to be an incentive for Job creation and assist in the recovery of the private sector. Although, you may spend this saving how you please.
The allowance will give the employer the opportunity to employ someone with a starting salary of up to £22,400 without paying any employer NICs at all.
2. Student Loan Deductions
The repayment threshold has risen from 6th April 2014 in line with the Retail Price Index. Therefore a Plan 1 loan is repaid at 9% of NIC’able pay above the threshold being £16,910 per annum. (Or £1,409.16 per month or £325.19 a week.)
3. Statutory Sick Pay – Percentage threshold Scheme
From the 6th April 2014 the percentage threshold scheme has been abolished and the recovery of Statutory Sick pay (SSP) will no longer apply.
Unfortunately this change does not affect an employer’s responsibility to Pay SSP and retain SSP records to show they are meeting employer obligations, but records may now be kept in a way that suits the employer.
4. New Absence Rates for 2014/15
Statutory Sick Pay (SSP) – £87.55 per week
Statutory Maternity Pay (SMP) – Higher Rate: 90% of average weekly earnings for the first 6 weeks
Statutory Maternity Pay (SMP) – Lower Rate: the lower of £138.18 per week or 90% of average weekly earnings
Statutory Adoption Pay (SAP) – Lower of £138.18 per week or 90% of average weekly earnings
Ordinary Statutory Paternity pay (OSPP) – Lower of £138.18 per week or 90% of average weekly earnings for a maximum of two weeks.
I’d love to hear your feedback on our April update, so feel free to leave a quick comment at the bottom of this post. And, if you found this information useful you can use the social sharing icons to share this post on social media platforms.
We’ll be back soon with another payroll and employment news update.
Julie Mason – Payroll Services Manager, PM+M Accountants