As it’s the start of the new tax year, Steven Glicher accountants thought it might be useful to remind small business owners of the raft of financial changes for employers that will affect them during the course of the next year, many of which come into force this month.
We hope that you will find this concise breakdown of the information useful.
So what financial changes for employers can we expect?
From April, 2014, many businesses and charities have been entitled to a £2,000 Employment Allowance per year towards their employer National Insurance Contributions (NICs) bill. Naturally this allowance has been helpful for many SMEs looking to expend their businesses and extend their staffing levels. However, it’s important to note that this allowance is due to expire in March, 2016, so employers should claim it before it expires.
2015/16 tax codes.
The personal allowance for 2015/16 has now risen from £10,000 to £10,600 for 2015/16, as promised in last month’s Budget. Employees will normally be given tax codes of 1060L as long as their tax circumstances are straightforward and they don’t have multiple jobs or pensions.
National Insurance Contributions (NICs).
Employees’ NICs will unusually occur before employers’ NICs. Employees’ NICs will be triggered when their earnings touch £155 per week, while employers will not be required to pay NICs until £156 per week.
NICs for employees under 21.
From April employers will not be required to pay Secondary NICs for staff members under the age of 21. This applies to only those with weekly earnings below a new Upper Secondary Threshold of £815 per week in 2015/16.
Couples’ transferable personal allowance.
From April 10 per cent of the £10,600 personal allowance will now be transferable between married couples or civil partners. However, the caveat to this is that the partner giving up their personal allowance must have an income of less than the personal allowance and the recipient of the transferred allowance must be a basic rate taxpayer.
New Workplace Pension rules.
Every working person in the UK aged between 22 and State Pension age and earning more than £10,600 a year must now be enrolled into a workplace pension scheme by their employer – this is known as auto-enrolment. You may have already seen some of the advertisements on the TV advising of this. The process has already started for larger businesses, but from April employers with less than 50 employees will also need to implement auto-enrolment schemes. Changes relating to auto-enrolment for smaller employers are set to be phased in more gradually.
RTI reporting concessions soon to cease.
Since April 2013, employers have been reporting PAYE information HMRC in real time – known as Real Time Information (RTI). However, a concession has been in place for micro employers coming to terms with the new payroll requirements. Rather than report in real time, these employers can file monthly. However, this concession is to cease from April, 2016.
If you would like any further information relating to the new tax, national insurance and pension changes, please contact Steven Glicher accountants on 0161 485 8007 or email info@.