Employers Class 1 NIC for Apprentices under 25 to be abolished

With effect from 6 April 2016, you may be interested to learn that you may no longer have to pay employer  Class 1 NICs for apprentices under the age of 25.

Currently employer Class 1 NICs are due for all employees aged 21 or over.

 

For the tax year 2016-17 it is proposed that the new NI category H will be used for apprentices who in addition to being under 25 are:

• working towards a Government recognised apprenticeship in the UK which follows a government approved framework/standard

and

• have a written agreement (between employer, apprentice and training provider), giving the government recognised apprentice framework or standard, with a start and expected completion date.

Employers NIC will be at a rate of 0% up to the new Apprentice Upper Secondary Threshold, which will be aligned with the Upper Secondary Threshold for the tax year beginning 6 April 2016.  Earnings above the Apprentice Upper Secondary Threshold (for 2015-16 £3,532 per month) will be at the full rate of 13.8%.

This does not affect the calculation of primary Class 1 NICs deducted from apprentices.

For more information see the HMRC website

AFH Payroll Proudly supports the Chalvington Group’s Fourth Annual Grand Charity Dinner

We are pleased to be involved with the Chalvington Group’s fundraising efforts which this year go to local charity Furniture Now!

AFH Payroll is a sponsor of the event which has sold out for this year, and takes place on 28th November at the Grand Hotel in Eastbourne.

To find out more about the Chalvington Groups charitable fundraising this year see: http://www.chalvingtongroup.com/charity/

To find out more about Furniture Now! see: furniturenow.org.uk

Spotlight on WPA Healthcare

Most employers know that they have a duty of care to their staff and are aware that if employees are using computers then they need to pay for eye tests.

We are always looking for ways to make sure that everyone who works at AFH are healthy, motivated and engaged.  When we discovered WPA Healthcare a few years ago, we were really pleased by the benefits that they offered to our team at a lower cost than we expected.

In addition to optical and dental cover, all of our employees have access to a confidential 24 hour line that can offers help with matters such as stress, legal, bereavement and medical issues.

In the last year one of the AFH team has received a payment for overnight stays in hospital, hospital car parking, eye tests and dental check ups. In addition, the cover provided by the WPA NHS top up policy automatically gives cover to members children under the age of 18 for no additional cost.

Importantly, it is very straightforward to make a claim and everyone at AFH has been impressed at the speed that the claim is settled usually in about a week.

If you haven’t thought about providing a small healthcare scheme to employees, we recommend that you have a chat with John Strudwick who is a WPA Healthcare Partner

Website: www.wpa.org.uk/johnstrudwick

Telephone: 07971 864 089

Guest Blog: Children’s Respite Trust

The Children’s Respite Trust provides respite for disabled children and support for their families throughout East Sussex and beyond. Its team of volunteer caseworkers work with the families to fight their cases and make sure that they are getting all of the statutory support that they are entitled to before then fundraising to provide a break privately.

Throughout 2015 the Trust is fundraising to recruit a team of community carers who can provide respite for families at home while making sure that the children have a fantastic time in the process.

None of this work would be possible without the support of the local community and the numerous fundraising events that are organised throughout the year by the local community and the trust itself.

Coming up is the Charity Family Fun day on 27 June – Tennis in the Park at Gildredge Park – a popular event which last year attracted over 1,000 visitors and provides local businesses with sponsorship & brand awareness opportunities.

There is also a unique opportunity for the brave to take part in a sponsored skydive for our charity.  The scheduled date for this is 30 August.

To find out about sponsoring the Charity Family Fun day Click here

To find out about getting involved in the skydive Click here

For general information about the work of the Childrens’ Respite Trust & to find out about volunteering see the Children’s Respite Trust website

Considering making a member of staff redundant?

Some advice for employers

Employers, particularly SMEs can be prone to making costly mistakes when it comes to making staff redundant.  This is largely due to a lack of awareness of the legal implications that govern redundancy.

This blogpost will hopefully provide employers with some key information to help their decision making process.

Redundancy is a process

There are many reasons why an employer may consider redundancy.  This may be due to financial reasons, a reduction in work, the need to change structure.  It is good practice for a business to consider their options prior to making a decision to make staff redundant.

Your next step is then to consider making a plan.  The following steps ideally need to be in place:

  • Brief your managers and outline any training or support needs that may be required
  • Consult your staff.  This is a legal requirement.
  • Choose the posts that need to be made redundant.  The key word is posts, not individual people.  Your approach needs to be fair and consistent with a clear decision making process.
  • A clear selection criteria for selecting the individuals that will be made redundant.
  • Giving notice of redundancy and pay.
  • Be mindful of rights during the notice period.  This is enable staff to look for alternative work.  If other vacancies come up within your organisation you may save on costs if there is an option for a member of staff facing redundancy to take up a new opportunity.
  • Allowing staff to appeal against the decision of redundancy.
  • Communicating the future business model to your staff.  If you have had to make people redundant, a plan to share with staff about the future of the business should help underline the rationale behind the redundancies and help show the future of the business in a positive light.

It is very important for employers to remember when they are considering redundancies that it is the actual position and not the person that is being made redundant.  Failing to get this principle right could lead to employment tribunal claims.

It is often a good idea to seek professional help from an Employment lawyer or HR consultant to ensure that the correct process is followed when considering redundancy within an organisation.

Useful information on the redundancy process can be found on the ACAS website.

 

 

 

Updated advice on penalties for not reporting payroll information on time

 

What you need to know

The HMRC has introduced penalties for employers who report their payroll information late.  These apply from:

▪   6th October 2014 for employers with more than 50 employees

▪   6th March for employers with less than 50 employees

 

 

A penalty can be charged if:

▪   Your Full Payment Submission  (FPS) was late

▪   You did not sent the expected number of Full Payment Submissions

▪   You did not send an Employer Payment Summary when you did not pay employees in a tax month

HMRC will not charge a penalty if

  • Your FPS is late but all reported payments on the FPS are within 3 days of your employees’ payday (applies from 6 March 2015 – 5 April 2016)
  • you are a new employer and you have sent your first FPS within 30 days of paying an employee or if it’s the first failure within the tax year to submit your report on time.
  • It’s your first failure in the tax year to send the report on time (not applicable to employers who are registered with the HMRC on the annual scheme).

For more information about how to avoid penalties for late submission see the HMRC website

 


Changes to Thresholds and Tax Codes for 2015/16 – are you ready?

From 6th April 2015, the new tax year begins.  This years’ changes are listed below in a quick reference guide:

Headlines

The Personal Allowance has risen to £10,600, and the Basic Rate has reduced to £31,785.

Rate                            %                     Bandwith

Basic Rate                   20%                 £1 to £31,785

Higher Rate                 40%                 £31,786 TO £150,000

Additional Rate            45%                 £150,0001 and above

Changes to Income Tax Allowances

Personal Allowance                                  2014/15           2015/16           Change

Those born after 5 April 1948                       £10,000           £10,600          £600

Born between 6 April 1938 – 5 April 1948    £10,500           £10,600           £100

Those born before 6 April 1938                    £10,660           £10,660           -

National Insurance Contribution thresholds                                                         

                                                                    2014-15           2015/16

                                                                   £ per week   £ per week

Weekly Lower Earnings Limit (LEL)                111                  112

Weekly Primary Threshold (PT)                      153                  155

Weekly Secondary Threshold (ST)                 153                  156

Upper Earnings (UEL)                                    805                  815

Upper Profits Limit (UPL)                          41,865 pa        42,385 pa

Upper Secondary Threshold for U21s (*3)     N/A                  815

Employment Allowance (per employer)          2,000 pa          2,000 pa

*3 Upper Secondary Threshold (UST) introduced from April 2015 for employees under the age of 21.  The rate of secondary NICs for employees under the age of 21 on earnings between ST and UST will be 0%.

Class 1 National Insurance Contribution rates 2015-16

Employees (primary)                                  Employer (Secondary)

Earnings                  NIC rate                      Earnings        NIC rate

£ per week               per cent                     £ per week     per cent

Below £112                 0                                 Below £156     0

£112-155                     0                                Above £156    13.8

£155-815                     12

Above £815                2

Statutory Adoption Pay

                                                          2014-15           2015-16

Earnings Threshold                             111.00             112.00

Standard Rate                                     138.18             139.58

Statutory Maternity Pay

                                                          2014-15           2015-16

Earnings Threshold                             111.00             112.00

Standard Rate                                     138.18             139.58

Statutory Paternity Pay

                                                          2014-15           2015-16

Earnings Threshold                             111.00             112.00

Standard Rate                                     138.18             139.58

Additional statutory paternity pay        138.18             139.58

Statutory Shared Parental Pay

                                                          2014-15           2015-16

Earnings Threshold                             111.00             112.00

Standard Rate                                    138.18             139.58

Statutory Sick Pay

                                                         2014-15           2015-16

Earnings Threshold                             111.00             112.00

Standard Rate                                     87.55              88.45

Pay in lieu of Notice – When does tax apply?

Making a payment in lieu of notice (PILON) is a way of ending an employment contract with immediate effect meaning that the employee will not work a notice period. An employer will make a payment of the amount that an employee would normally have been paid if they had worked the notice period.

Whether tax is payable on the PILON all depends on the contractual agreement between the employer and the employee and whether it is usual

practice for the employer to make this type of payment.

If under the terms of the contract, the employer has the right to make a payment in lieu of notice then the payment is made as part of the contract and taxable.  The same would apply if it was customary for the employer to make payments in lieu of notice when terminating an employee’s employment regardless of which party chose to give notice to end the contract.

If however, PILON is not covered in the employee’s contract of employment nor customary practice for the employer to make this type of payment, then PILON would be treated as damages for a breach of contract on the part of the employer and so would not be taxable.

Other payments made at the time of leaving such as holiday pay will be taxable as they are a contractual payment.

For more information on PILON please see: http://www.acas.org.uk/index.aspx?articleid=4540

Court ruling that Overtime should count in Holiday Pay

What does this mean for your business?

In November 2014, a landmark Employment Appeal Tribunal case ruled that employees have the right to claim for overtime to be included in their holiday pay if the overtime is regular or compulsory. The Tribunal has not clarified whether this could also benefit staff who work voluntary overtime.

The ruling was based on the supposition that UK had incorrectly interpreted the EU Wide working time directive, which was implemented into law as the Working Time Regulations in the UK in 1988. The current legislation in the UK states that holiday should be paid at the basic rate.  This has now changed as a result of these test cases.

It is anticipated that due to the impact this ruling could have on business that an Appeal on this ruling is likely.  If the ruling stands or is appealed unsuccessfully, then employers must include overtime when calculating workers’ holiday pay.  Employers need to consider how they will apply the ruling until any appeal process which may take a considerable length of time, has been completed

The judgement has created a time limit on how far back employees can backdate claims of overtime on their holiday pay, which means employees must make a claim within 3 months of taking their holiday or they lose their right to make a claim.

ACAS have produced useful guidance on overtime, commission and other payments to be considered when calculating holiday pay for employees.

http://www.acas.org.uk/index.aspx?articleid=4109

Changes to HMRC requirements for employment Intermediaries take effect on 6 April 2015

The HMRC are responding to increased false self employment on the part of employment intermediaries acting on behalf of self employed workers who should legally be regarded as employed, and therefore attract the same rates of Tax and National Insurance as an employed person would do.

From 6 April 2015, Employment Intermediates must send details of workers they place with clients who are not:

  • Direct employees or,
  • Being treated as employees.

The HMRC has published Draft Reporting Regulations for which the consultation period has just ended (25 November 2014).

For more information about this change and the possible impact it might have to your business see the HMRC website