Now that the March 2017 budget has been announced and confirmed, this article summarises the main elements that have changed is specific relation to payrolls. There are always changes being made to payroll rules and regulations by HMRC and keeping on top of them can be time consuming, especially if you are a small business. If you need help, talk to us, because we are outsourced payroll experts.
Personal Allowance and basic rate tax
The tax free personal allowance is increasing by £500 from the current £11,000 to £11,500, whilst the 20 percent basic tax rate band is set to increase from £32,000 to £33,500 per year. Both these changes came into effect from 6thApril 2017.
National Insurance and Statutory Sick Pay
The lower earnings limit for National Insurance is increasing from £112 per week to £113 per week. In monthly figures, it is increasing from £672 per month to £680 per month. Statutory sick pay is increasing from £88.45 to £89.35 per week and statutory paternity/maternity/adoption pay is set to increase from £139.58 to £140.98 per week.
There were plenty of changes in this area, as detailed below:
Firstly, the National Living Wage for workers who are 25 and over has increased from £7.20 per hour to £7.50 from the first pay reference period which starts on or after 1st April 2017.
Secondly, the National Minimum Wage rates have also been increased. For employees aged 21-24 the minimum wage has increased from £6.95 per hour to £7.05 per hour, for those aged between 18-20 it has increased from £5.55 per hour to £5.60 per hour. For 16-17 year olds the increase is from £4.00 per hour to £4.05 per hour. The apprentice rate has increased from £3.40 to £3.50 per hour.
The Apprentice Levy came into full effect from April for companies who have a monthly pay bill that is £250,000 or more.
Tax free childcare for children under the age of 12 has been introduced. The 20 percent relief of cost of childcare up to a total of £10,000 per child means it will be worth a maximum of £2,000 per child.
Other Tax Areas
The VAT registration threshold for companies has increased from £83,000 to £85,000, whilst the corporation tax rate will be being reduced from 20 percent to 19 percent.
Contact us for Help and Assistance With All Things Payroll
As you can see, the budget has introduced changes to employee wages, personal allowances, tax bands, National Insurance, statutory sick pay, the national living wage, the minimum wage and VAT and corporation tax.
If you would like a payroll services expert to take over the running of your payroll, contact us or call us on 0121 422 0550.