The new tax year has arrived, and employers in the UK face important responsibilities related to payroll management. Here's a comprehensive overview of what you need to know and do to stay compliant with HM Revenue and Customs (HMRC) regulations.

1. Sending Your Final Payroll Report

Ensure you had sent your employees' final payday of the tax year before or ON the 5th April. Be sure that you marked 'Yes' in the 'Final submission for year' field in your payroll software. This report should include end-of-year information for all payrolls under the same PAYE scheme.

If you missed this deadline or encounter specific circumstances (like 'Week 53' payments), you may need to correct any errors or omissions promptly to avoid penalties.

As we navigate through the ever-evolving landscape of employment regulations, it is crucial to stay informed. As of 1st April, the government has made adjustments to various employee-related allowances, with some significant changes that impact both employers and employees.

Here's a snapshot of the key changes:

Keeping you informed on crucial updates in employment regulations is at the heart of our commitment. As we transition into the new fiscal year, it's imperative to be aware of the revised compensation limits set by the government for Employment Tribunal cases.

Here are the key changes effective from 2024 to 2025:

As we usher in April, there are positive changes on the horizon for family-related payments, providing enhanced support for individuals during critical life moments. Starting this month, several key allowances have been raised to better assist those navigating family-related challenges.

**Family Related Payment Increases:**

- **SSP (Statutory Sick Pay):** Now increased to £116.75 per week.

- **SPP (Statutory Paternity Pay), SAP (Statutory Adoption Pay), Shared Parental Pay, and Bereavement Leave:** All increased to £184.03 per week.

In the intricate realm of payroll and taxation, the responsibility for submitting a tax return may not inherently lie with the employer. However, armed with this knowledge, the question arises – should employers take the initiative to communicate this information to their staff?

The government will mandate the reporting and paying of Income Tax and Class 1A National Insurance Contributions (NICs) on benefits in kind via payroll software from April 2026, building on the progress already made on the government’s ambition to fully digitalise the reporting of benefits in kind. Mandation will simplify the tax affairs of 3 million people and reduce the need for them to contact HMRC.

For those navigating the transitional period, here's the scoop on reclaiming Statutory Paternity Pay (SPP):

Single Block Scenario:

If an employee took a single block of Statutory Paternity Pay (SPPL) before 6 April 2024 (lasting 1 or 2 weeks), employers can claim repayment for that one consecutive block. Reclaiming is a breeze through your payroll software or standard procedures.

Non-Consecutive Blocks:

In the case of 2 non-consecutive SPPL blocks taken before 6 April 2024, employers can claim repayment for only one block before this date. Hold tight for the second SPP block—reimbursement will be possible once the PAYE system gets its update.

Exciting News for Soon-to-be Dads and Partners!

Starting from 8 March 2024, HM Government is introducing changes to Paternity Leave and Pay to provide more flexibility and support for fathers and partners. Here's a quick snapshot:

Non-Consecutive Blocks:

Dads and partners can now take their leave in 2 non-consecutive blocks, breaking free from the one-block restriction. Choose what suits your family best!

Extended Time Frame:

Enjoy the freedom to take Paternity Leave and Pay at any point in the first year after your child's birth or adoption. Flexibility tailored to your family's needs.

Shortened Notice Period:

With just a 4-week notice, you can decide when to take your leave, accommodating the dynamic needs of your growing family.

In a significant mid-tax year adjustment, the main rate of Class 1 employee National Insurance Contributions (NICs) is set to be reduced to 10% starting from January 6, 2024. This two-percentage point decrease brings about a notable change that can benefit both employees and employers. However, with the implementation date coinciding with the busy festive period, it's crucial for employers to make timely adjustments to their payroll systems to ensure a smooth transition.

Key Points for Employers:

National Minimum Wage Increase

Yesterday the Government announced that it has accepted the Low Pay Commission’s recommendations on minimum wage rates to apply from 1 April 2024.

This is the largest ever increase to the minimum wage in cash terms.

The National Living Wage will apply to all workers aged 21 and over for the first time (previously applying only to those aged 23 and over).

The National Living Wage and National Minimum Wage are the lowest rate of pay per hour that a worker must be paid by law. It does not matter how many workers you employ, you must pay the correct minimum wage.

You can find the current rates for 1 April 2023 to 31 March 2024 at National Minimum Wage and National Living Wage rates.

However, it is not just as simple as making sure the correct minimum wage rate has been paid. There are several ways in which underpayments can occur when minimum wage calculations are made. Common issues include unpaid working time, unpaid travelling time and deductions from pay for items or expenses connected with the job.

Find out more information on the common issues that can bring workers below the minimum wage.

Employing an intern or anyone on work experience

It is important to establish the nature of the relationship between the individual and the employer when deciding if the individual is a worker or not for minimum wage purposes.

Entitlement to the minimum wage does not depend on how someone’s role is defined by their employer.

Interns

Internships are sometimes understood to be positions requiring a higher level of qualification than other forms of work experience and are associated with gaining experience for a professional career.

Although the term intern is not defined in minimum wage legislation, if any payment or remuneration is made for work done, an intern is likely to be regarded as a worker for minimum wage purposes. An intern may also be considered as a worker if they are promised a contract of future work or future pay.

Work experience

The term work experience generally refers to a specified period that a person spends with a business, providing them with an opportunity to learn directly about working life and the working environment.

More information is available on GOV.UK:

· for guidance about minimum wage — work experience and internships

· for guidance on calculating the minimum wage correctly

· if you make a mistake, you can make a voluntary declaration

To make sure a payment is allocated to the correct month or liability you intended to pay, remember to include your 13-character accounts office reference number as the payment reference.

Each time you make an early or late payment you also need to add 4 extra numbers to the end of your 13-character accounts office reference number. If you pay monthly, the 4 digits which you need to add to the end of your 13-character reference number are:

· the last 2 numbers of the tax year your payment is for

· the number of the month or quarter of the tax year your payment is for

For example, if you are making a payment for the month of 6 May 2023 to 5 June 2023, the 4 numbers you need to add to the end of your accounts office reference number are 2402. This is worked out as follows:

We want to remind employers who are setting up a recurring Direct Debit for paying employer PAYE that they need to do this at least 6 working days before the payment is due. For employers who pay monthly this falls on the 22nd of every month.

You can set this up when you log into your business tax account.

We have changed the system so that employers will not now receive a notification for late payment when they have paid by Direct Debit.

You might see late interest being charged if you log into your account between the 23rd and the date the payment is taken from your account, but this will be reversed once we have processed the payment.

If you have a tax agent, it is important to note that they are unable to set up a Direct Debit on your behalf. To do it yourself, you need to be enrolled for PAYE Online for employers.

Many employers whose agents send in real time information data on their behalf are not enrolled. Even if you have an agent acting and filing payroll on your behalf you can set up and use PAYE Online for employers yourself.

Termination Payments Legislation

Do you or your employees earn over £100,000.00 through PAYE

If so, read below and call HMRC on 0300 200 3200 to let them know your earnings for the year. They will adjust your tax code accordingly to save any issues down the line.

Alternatively, sign into your Personal Tax AccountYour Personal Allowance goes down by £1 for every £2 that your adjusted net income is above £100,000. This means your allowance is zero if your income is £125,140 or above.

National Minimum wage Increases & New Statutory Maternity and Sick Pay Rates

The Government announced the rates of the National Living Wage (NLW) and National Minimum Wage (NMW) this comes into force from April 2023. In doing so, it has accepted in full the recommendations of the Low Pay Commission.

The free HMRC app

5 Tips That Can Help Make Your Payroll Processing Easier

NATIONAL INSURANCE CONTRIBUTIONS (INCREASE OF THRESHOLDS)