Payroll alliance what's new for 2015

Payroll Alliance What's New for 2015 1

Good Afternoon & Welcome


Presenter: Linda Pullan, Head of Payroll Alliance

What’s New for 2015

Payroll Alliance

• Membership - special offer on new membership in partnership with Cedar Consulting • Training • In-company training with bespoke programmes • BTEC qualifications

• Details in your delegate pack


Agenda

• Finishing the tax year • PAYE changes • National Insurance • Statutory Payment rates • Student Loans • Shared Parental Pay and Leave


PAYE • Finishing the tax year • Personal allowances • Tax thresholds • Transferable allowances • New suffix codes • Form P45


Tax Year End 2014/15

• Last amending FPS/EPS up to 19 April

• Indicate final submission on last FPS or EPS

• Questions & Declarations – Not required to be completed – PAYE Basic tools from July 2015

• P60 by 31st May

Tax Year End & Legislation Update 2015 v10.0 6


• Error correction after 19 April – Do not send FPS

• EYU corrects FPS

• Report negatives or positives

• Basic PAYE Tools – Different basis – Enter correct YTD’s – Software will generate the difference



• Correction to EPS after 19 April – Complete ‘Related Tax Year’

• Week 53, 54 & 56 – PAYE roundings (Table A) – Additional week 1 etc allowances – Re assessment can result

in underpayments – P800 reconciliations issued



PAYE

• PAYE threshold from 6th April 2015 – £204 per week – £884 per month

• Emergency tax code 1060L operated cumulatively or week 1 / month 1

• New Taxable Pay tables are now available at https://www.gov.uk/government/collections/payroll-

publications-for-employers

https://www.gov.uk/government/collections/payroll-publications-for-employers








Personal Allowances 2015/16 PERSONS UNDER AGE 65

Personal Allowance (for those born on or after 6 Apr 1948)

£10,600

PERSONS AGED 65 to 74

Personal Allowance (for those born between 6 April 1938 – 5 April 1948)

£10,600

PERSONS AGED 75 AND ABOVE

Personal Allowance (for those born before 6 April 1938)

£10,660

Married Couples Maximum Minimum

£8,355 £3,220

Tax Thresholds 2014/15 2015/16

Additional Rate

45% Over £150,000

Higher Rate

40% £31,866 - £150,000

Basic Rate

20% £0 - £31,865


Additional Rate

45% Over £150,000

Higher Rate

40% £31,786- £150,000

Basic Rate

20% £0 - £31,785

Transferable Allowances • Effective 6th April 2015

• Unused allowance transferred

• Married couples and civil partners • Both must be basic rate taxpayers • Up to 10% of Personal allowance (£1,060) • Reduced tax up to £212 per year

• Digital applications online through GOV.UK

• Most benefit to individuals earning less than £10,600


New Suffix Tax Codes • New suffix letters

• ‘N’ for the transferor • ‘M’ for recipient

• Allocated when initial claims processed

• Subsequent uplifts part of P9X

• Individual P9s issued for non ‘L’ codes

• P6 coding notifications from 6th April 2015


INCOME TAX

• Coding Out

• 50% Regulatory Limit

• Collecting underpayments

• Direct Recovery of Debts • Penalties


‘Coding Out’ • Used to recover Tax Credit or SA debt • Original limit of £2k, increased to £3k from April 2012 • High earners often excluded from ‘coding out’ • Tax codes changed from April 2015


Earnings Up to £30k

£30 - £40k

£40 - £50k

£50 - £60k

£60 - £70k

£70 - £80k

£80 - £90k

£90k plus

Coding Out Limit

£3k £5k £7k £9k £11k £13k £15k £17k

Collecting Underpayments

• ‘Coding out’ may not work for low paid

• Earners earning less than personal allowance

• HMRC issue assessment or P800


Extension of 50% Regulatory Limit

• Originally only applied to K tax codes since 1993 • Applies to all suffix, prefix and letter only tax codes from 6 April 2015

• Softens the effect of ‘coding out’

• Non K codes where 50% applies changed to non-cumulative

• Tax not deducted and c/fwd to next payroll

• RTI should show tax deducted

• Will also apply to Scottish Rates


RTI filing penalties and appeals • 1st Quarterly penalty notices issued

from beginning of February 2015

• Agents will not receive a copy

• Could contain more than 1 penalty

• Contains Unique ID for appeals

• HMRC advise to check your GNS messages regularly

• In-year penalties for schemes with 49 or less employees start 6 March 2015

• Automated late payment penalties start for ALL schemes from 6 April 2015

WM Spring 2015 18

National Insurance

• Thresholds • Rates • Under 21s NIC


NIC Thresholds and Limits 2015/16

LEL PT ST UAP UEL/UST

Weekly 112.00 155.00 156.00 770.00 815.00

2 weekly 224.00 310.00 312.00 1,540.00 1,630.00

4 weekly 448.00 620.00 624.00 3,080.00 3,261.00

Monthly 486.00 672.00 676.00 3337.00 3,532.00

Annual 5,824.00 8,060.00 8,112.00 40,040.00 42,385.00


NIC Thresholds / Limits 2015/16

WM Spring 2015 21

Weekly Monthly

UEL/UST £815 £3,532

UAP £770 £3,337

ST £156

£672

LEL £112 £486

Annual

£42,385

£40,040

£8,060

£5,824

PT £155

£676 £8,112

National Insurance • New earnings threshold from 6 April 2015

• New Upper Secondary Threshold (UST)

• For 2015/16 set at same level as UEL

• NIC Categories 2015/16 – A, B, C (Not Contracted Out) – D, E (Contracted Out) – J, L (Deferment) – I, M (Under 21s – Standard Rate) – K, Z (Under 21s Deferment)

• No change to percentage rates


Employer NICs for Under 21s • Employee aged 16 or above

• But not yet reached age 21

• No Employer Class 1 NICs up to UST

• Class 1A & Class 1B operate as usual

• New NI Letters: – M, Z, Y, P, V, I & K – V, I & K will be removed in April 2016


Employer NICs ON Under 21s


Not Contracted Out Contracted Out

UST

0% 0% UAP

0% (3.4%) ST

0% LEL

0% 0%

(3.4%)

13.8% 13.8%

STATUTORY PAYMENTS

• Statutory Sick Pay (SSP) • Statutory Maternity Pay (SMP) • Statutory Adoption Pay (SAP) • Statutory Paternity Pay (SPP) • Shared Parental Pay (ShPP)


Statutory Payments • SSP:

– increases by 1% to £ 88.45 p.w. from 6 April 2015

• All other payments increase by 1% to £139.58 p.w. from Sunday 5th April

• New SAP payment structure from 5 April 2015 which affects expected placements from 5 April 2015. Payment will be 90% of earnings for first 6 weeks then the lesser of 90% or the flat rate for remaining 33 weeks

• ShPL & ShPP entitlement begins for babies due on or after 5th April or expected to be placed by that date

• ASPL & ASPP entitlement ceases for babies due from 5th April, BUT could still be paid after this date.


STUDENT LOANS


Student Loan Threshold • Annual increase by RPI

• 3.6% increase

• From 6 April 2015

• New threshold £17,335

– £1,444.58 p.m. – £333.36 p.w.


SHARED PARENTAL LEAVE AND PAY

Mother’s partner entitled to time off to take 2 unpaid ante natal appointments

Maternity Leave & Pay unchanged 52 weeks & 39 weeks SMP

OSPL & OSPP renamed Statutory Paternity Leave & Pay (SPL & SPP)

ASPL & ASPP replaced by Shared Parental Leave & Pay

(ShPL & ShPP)


30

1 39 52

2

39 52

Shared Parental Leave & Pay Entitlements

SMP 90% of earnings

Statutory Paternity Leave & Pay (2wks)

Up to 37 weeks paid Shared Parental Leave & Pay (ShPL/ShPP)

Unpaid Shared Parental Leave (ShPL)

Payroll Alliance What's New for 2015

Mother 7 6

Father

3

SMP lesser of 90% or Flat Rate

Unpaid Maternity Leave

40

40

Who is entitled? • Mother

• Child’s father - even if not in a

relationship with mother

• Mother’s partner – Married to or civil partner – Same sex or different sex – Who lives with the mother in an

enduring family relationship


Qualification • The Mother:

– Is entitled to SML & SMP or MA – Main responsibility for

care of child – Curtailed her SML/SMP – Given correct notice

and evidence (8 weeks) – Declared that the father

• satisfies earnings employment test

• responsibility for care of child

• Father or partner has: – Main responsibility for

care of the child – Given correct notice and

evidence (8 weeks) – Declared that child’s mother

• Satisfies tests • Responsibility for child • Entitled to SML, SMP

or MA • Curtailed her SML


Shared Parental Leave in Touch Days (SPLIT)


Maternity Leave ‘KIT Days’ Mother entitled to 10 days

Shared Parental Leave Each parent entitled to 20 ‘SPLIT’ Days

PLUS

Other Matters • Right to return to work

– First 26 weeks – same job – Second 26 weeks – right to return to suitable job

• Antenatal Care – From1st October – Father or partners statutory right – Applies in surrogacy arrangement,

adoptive parents – Capped at 6 ½ hours


Other Matters • Applies for children expected to be placed from 5th April 2015

• From 5 April 2015 no qualifying service for Statutory Adoption leave

• Statutory Adoption Pay paid @ 90% for first 6 weeks

• Surrogate mothers entitled to SMP & SML

• Surrogate parents entitled to SAP & SAL

• “Fostering to adopt” can qualify for SAP/SAL & ShPP/ShPL

• Flexible working rights for all from 30th June 2014


Any questions?


Linda Pullan Head of Payroll Alliance www.payrollalliance.com

http://www.payrollalliance.com/

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Payroll alliance what's new for 2015