TT217: Topical Tips for Employers

Last week was the final Budget before the General Election. There were a number of changes and announcements aimed across a spectrum of people. This note will focus on ‘employers’ and mention a few measures that will take affect from 2015-16 tax year although some of the changes were already announced.

National Minimum Wage

This will increase from 1 October 2015 and the rates will be as follows:

  • the adult rate will increase by 20 pence to £6.70 per hour
  • the rate for 18 to 20 year olds will increase by 17 pence to £5.30 per hour
  • the rate for 16 to 17 year olds will increase by 8 pence to £3.87 per hour
  • the apprentice rate will increase by 57 pence to £3.30 per hour
  • the accommodation offset increases from the current £5.08 to £5.35

https://www.gov.uk/government/news/new-national-minimum-wage-rates-announced

Van benefit charge for zero emission vans

If a van is made available for private use, there is a flat rate taxable benefit charge that is reportable on the form P11D.

From April, van with zero emission CO2 emission made available for private use will be introduced at a rate of 20% of the value of the van benefit charge for vans that emit CO2.

Car Benefit

Providing a car remains one of the most expensive benefits to provide to employees.

Unfortunately the taxable benefit value will continue to increase for the foreseeable future.

Statutory Exemption for trivial benefits

Any non-cash benefits received in your capacity as an employee or office holder is taxable unless it is covered by a specific exemption, covered by a dispensation or a PAYE Settlement Agreement (PSA).

Trivial benefits costing no more than £50 will not be liable to income tax or National Insurance Contributions from 6 April 2015. This cap will be £300 for office holders of close companies and employees who are family members of those office holders.

Abolition of employers National Insurance contributions (NIC) for the under 21s

From 6 April 2015 every employer with employees under the age of 21 will no longer be required to pay Class 1 secondary National Insurance contributions (NICs) on earnings up to the upper secondary threshold (UST), for those employees. The upper secondary threshold for U21s for 2015-16 will be £815 per week.

RTI late filing penalties – 3 day grace period

HM Revenue & Customs announced in February 2015 that in-year late-filing penalties would not be chargeable where a full payment submission (FPS) was made within 3 days of the due date, that is, on or before the third day after when it should have been made.

This welcome relaxation will apply to micro employers (employers with fewer than 50 employees) for paydays up to 5 April 2016.

https://www.gov.uk/government/news/hmrc-will-not-impose-paye-filing-penalties-for-short-delays-from-march-2015

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