Paul Southward gives an Employers Update summary.
Save Employer’s NIC when employing apprentices
From 6 April 2016, if you employ an apprentice you may not need to pay employers Class 1 National Insurance contributions on their earnings below £827 per week (£43,000 a year).
The apprentice must be under 25 years old and following an approved UK government statutory apprenticeship framework. (Frameworks can differ across England, Scotland and Wales).
If you have apprentice(s) that meet the requirement you will need to obtain appropriate evidence to be able to apply for the relief.
Employees will continue to pay the standard rate of Class 1 NICs through their salary, they will not see any reduction in their payments, as it is the employers who will benefit from this change.
Get ready for the new tax year
The new tax year commences on 6 April 2016, so what should employers be doing to get ready?
Here are a few pointers:-
The basic personal allowance is increased to £11,000 and the basic rate band limit rises to £32,000. The starting point for PAYE tax will be £212 per week (£917 per month). The new emergency PAYE tax code is 1100L for all employees.
For each employee you employ on 6 April you will need to:
* prepare a payroll record
* identify the correct tax code to use in the new year
* enter the correct tax code on the payroll record
HMRC should issue new tax codes where necessary. If you do not receive a new tax code for an employee where you were expecting one, you should contact HMRC.
Further guidance for employers can be obtained from HMRC.
Farewell to Dispensations
From 6 April 2016 dispensations for P11D’s will be obsolete. New legislation provides an exemption from tax for business expenses incurred by employees, provided that they are tax deductible.
Dispensations for bespoke benefits and expenses will be covered by a new HMRC approval notice, and employers will need to provide sample evidence to support the level of allowance requested. Applications should be made as soon as possible as the use of the approved amounts cannot be backdated.
Employers will need to put in place robust and verifiable checking systems to validate all expenses payments.
Contact Paul if you have any queries.