29th March 2019
As the tax year is coming to an end, next month we are going to see a lot of important changes for Payroll that employers need to be aware of in order to stay compliant and prevent any embarrassing mistakes.
National Living Wage and National Minimum Wage
With effect from 1 April 2019 we will see changes to the National Living Wage and National Minimum Wage.
- The national living wage for workers aged 25 and over will increase to £8.21 per hour.
- The national minimum wage for workers aged 21 to 24 (inclusive) will increase to £7.70 per hour.
- The national minimum wage for workers aged 18 to 20 (inclusive) will increase to £6.15 per hour.
- The national minimum wage for workers aged under 18 (but above compulsory school age) will increase to £4.35 per hour.
- The national minimum wage for apprentices will increase to £3.90 per hour.
In April 2018 auto enrolment minimum contributions increased from 2 to 5 percent, with The Pensions Regulator suggesting that the change had a minimal effect on employees leaving pension schemes within small to medium employers. However, April 2019 sees another hike in contributions to 8%, with the employee this time paying 5%
Payslip law changes
Under new law laid before Parliament on Thursday 8th February 2018, The Employment Rights Act 1996 (Itemised Pay Statement) (Amendment) Order 2018 was passed and comes into force from 6th April 2019. Employers will now be required to provide employees who are paid according to ‘time worked’, details of the number of hours being paid on their payslip this time.
“where the amount of wages or salary varies by reference to time worked’, the total number of hours worked in respect of the variable amount of wages or salary either as— a single aggregate figure, or separate figures for different types of work or different rates of pay.”
Trethiant Cymreig. Welsh Taxation
In 2017 Scotland broke away from the rest of the UK by introducing Scottish Tax.
In April 2019, similar powers will also be given to the Welsh Assembly. For the first time, it will be required to set Welsh tax rates in order to obtain its share of the wider UK tax slice.
UK employers will, therefore, have to operate three different taxation regimes covering Scotland, Wales and the rest of the UK (England and Northern Ireland).
New Student Loan Type
The current threshold for 2017-18 for Plan 1 is £18,330 and for Plan 2 is £25,000. The new threshold rates from 6 April 2019 will be: Plan 1 loans will rise to £18,935 Plan 2 loans will rise to £25,725
In 2019 the Department for Education will introduce a new loan type from 6 April, the Postgraduate Loan (PGL). The threshold for 2019/20 will be £21,000.
Failing to comply when new payroll rules are introduced can be costly for any business, so it is crucial that business owners and payroll staff stay up to date. Outsourcing to a payroll provider is a great way to give you peace of mind that your payroll is being taken care of correctly and it can remove the headache of keeping up with the ever-changing payroll legal requirements.
Top 10 Payroll Issues 2019
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