What Changes are Coming in 2018 that Will Have an Impact on Payroll?
Here are just the main changes to keep an eye on that will have an impact on payoll. Of course, if you run a small business, and you need an outsourced Payroll provider to keep an eye on all of these changes for you, then that’s where we come in.
Paying HMRC online
Since 13 January 2018, it is no longer possible to pay HM Revenue & Customs (HMRC) online with a personal credit card. This applies to any online payments to HMRC including:
- employers’ paye as you earn and National Insurance contributions
- VAT (value added tax)
- corporation tax
- stamp duty land tax
- income tax (where you have previously underpaid).
Corporate, business and commercial credit cards are not affected by this change, and HMRC will continue to accept personal and commercial debit cards.
Optional remuneration arrangements
It’s been nearly ten months or so since the changes to legislation surrounding Benefits in Kind (BiKs) in conjunction with salary sacrifice came in to effect in April 2017. From April 2018, for those already voluntarily payrolling company cars as a BiK, it will be mandatory to submit car data information in the full payment submission returns. Those employers providing company cars (and are not voluntary payrolling them as BiK), can continue to process in the normal way via P11D and P46 (Car) returns.
Importantly, the ‘amount foregone’ is only the part of the salary sacrificed amount that relates specifically to the taxable car. It does not include the amount sacrificed for payments and benefits associated with taxable cars, such as a servicing package. You should therefore apportion the full amount of the salary sacrifice (or cash allowance) between the taxable car and the tax-exempt benefits.
Postponement of the National Insurance Contributions Bill to April 2019
In November 2017, the government announced that they would introduce the National Insurance Contributions (NICs) Bill in 2018. The measures it would implement will now take effect one year later, from April 2019. These include abolition of class 2 NICs, reforms to the NICs treatment of termination payments and changes to the NICs treatment of sporting testimonials.
In light of the last-minute changes announced at Autumn Budget 2017, it would make sense to check that your software payroll can adapt to these changes.
The one-year delay to the implementation of the NICs Bill means that the new employer charge on termination payments over £30,000 will now start from April 2019. Other changes to the income tax and NICs treatment of termination payments will still have effect from April 2018, subject to parliamentary approval. These include income tax and class 1 NICs liability on all payments in lieu of notice and the removal of foreign service relief for employees resident in the UK. These changes will not require any changes to software.
Automatic enrolment changes
On 6 April 2018, all employers will be required to increase the minimum contribution from the current level of 2% of qualifying earnings to 5%. Employers must increase their contributions to at least 2% and that of their staff increased so that the total minimum contribution is not less than 5%.
On 6 April 2019, the contribution levels further increase, where the employer will be required to pay a minimum of 3% with the total minimum contributions needing to reach 8%. Employee contributions must make up the difference, which could be up to 5%.
On 17 December 2017, the Department for Work and Pensions published their automatic enrolment review 2017 recommendations with two key proposals: to remove the lower earnings limit and to lower the age limit from 22 to 18.
The government’s ambition is to implement the proposed changes to the framework in the mid-2020s.
There will be discussions with stakeholders around the detailed design in 2018/19, finding ways to make the changes affordable, followed in due course by formal consultation with a view to introducing legislation.
Gender pay gap
The date is fast approaching where those employers in the voluntary, private and public sector that employ 250 or more relevant employees on the snapshot date will be required to publish their gender pay gap figures. The snapshot date is 5 April in the private/voluntary sector and 31 March in the public sector.
For Help With Your Payroll, Contact us
As an outsourced payroll provider, we keep up to speed with these changes, and all the other less well known ones that HMRC introduces on a regular basis. This means you get on with running your businesses while we run the payroll. Contact us or call us on 0121 422 0550 for an initial chat.