Employers face a wide range of changes and new challenges from 6 April 2016. HMRC may be aiming to simplify the tax code but there is also greater desire to put more responsibility on to the shoulders of employers!
Other than the various threshold changes the most significant changes are:
The government will increase the National Insurance contributions (NICs) employment allowance from £2,000 to £3,000 a year. Importantly however, the allowance is no longer available to single person companies.
Dispensations are no longer available. Some benefits and expenses may now be paid through the payroll without the requirement of a P11D but others, and it falls upon the employer to determine which, will require P11D reporting. HMRC guidance.
Payrolling benefits in kind
Employers who already, or intend to, payroll benefits and expenses must register with HMRC using the new online Payrolling Benefits in Kind (PBIK) service. Employers must register to use the PBIK service by 5 April 2016.
Student Loan Deductions
Payroll software must provide support for student loan deductions on either Plan 1 or Plan 2 loan repayment schemes.
Apprentice NI Concession
For apprentices under the age of 25 there is an National Insurance concession. This is controlled by setting the appropriate NI table for the employee.
Scottish rate of income tax (SRIT).
For those employees living in Scotland, as opposed to where they are working, they will be subject to Scottish Rate of Income Tax.