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

Shared Parental Leave – Some things businesses should know.

What is Shared Parental Leave?

New regulations which affect current maternity and paternity leave and pay take affect as of 1st December 2014, and will apply to parents if:

  • Their baby is due on of after 5 April 2015
  • They adopt a child on or after 5 April 2015

Shared Parental Leave (SPL) and the Statutory Shared Parental Pay (ShPP) must be taken between the baby’s birth and their first birthday.

It effectively enables parents to make choices about how and when they take their SPL and gives them the opportunity to share the leave or the pay between them.

Some key points for businesses

  • If a baby is due on or after 5 April 2015 and born early, these new rules will be applied in the current 2014/15 tax year
  • It is the employee’s responsibility to check they are eligible for shared parental leave and/or pay and they must give their employer a written declaration confirming that they are eligible. An employer is not required to check or confirm the information given by the partner to determine whether the employee is eligible for shared parental leave and/or pay.
  • Parents have to meet the eligibility criteria to qualify for SPL and ShPP.  To view the eligibility criteria click here
  • If eligible once the Maternity or Adoption leave and pay are ended early, parents can
    • Take the rest of the 52 weeks of leave (up to a maximum of 50) as SPL
    • Take the rest of the 39 weeks of pay or Maternity Allowance (up to a maximum of 37 weeks) as ShPP.
    • NB the mother must take a minimum of 2 weeks maternity leave following the birth (4 weeks if working in a factory)

There are some formalities in terms of what information the employee must give the employer about their plans to take the SPL.

It is recommended that the employer has early informal discussions about their plans with regards to how they intend to take SLP so they can plan effectively for the period(s) of leave.

An employer cannot refuse a notification for continuous leave request. Each eligible parent can give up to 3 separate notices to book leave or to vary previously agreed leave although an employer may choose to accept more notifications from an employee.

Detailed guidance for employers is available through the ACAS website