We’ve seen a rise in queries about how Statutory Maternity Pay (SMP) should be calculated when an employee qualifies for a second period of maternity leave without returning to work.

The key point: SMP eligibility and calculation rules don’t change. Employers must assess eligibility as usual, using the average weekly earnings (AWE) from the 8-week relevant period up to and including the Qualifying Week.

Back in October of 2024, the Department of Business and Trade published the code of practice on fair and transparent distribution tips, and while not much will change for payroll processes, it important to ensure your company is compliant.

Please see below some helpful things to remember about tips and the tax treatment of processing them in different scenarios:

We have been aware for some time of the pending changes to SSP and there is now official confirmation that they will be implemented as of April 6th, when the new tax year begins.

The key changes are as follows:

As we approach 2026, it is important to take note of the latest budget policies and announcements from the Chancellor.

Rachel Reeves recently confirmed that income tax thresholds will stay frozen until the 2030–31 tax year, extending a policy first introduced in 2021.

Chancellor Rachel Reeves has announced that the government will raise the National Minimum Wage and the National Living Wage from April next year. The move is intended to offer additional support to those in lower-paid roles and to help with persistent cost-of-living pressures.

The Living Wage Foundation has announced a rise in the Real Living Wage: 

The Real Living Wage has increased by 6.7% across the UK and 6.9% in London. This increase means that from now, it iss set at £13.45 per hour across the UK and £14.80 per hour in London.

The Government has published legislation, ‘The Companies (Accounts and Reports) (Amendment and Transitional Provision) Regulations 2024’, to increase the monetary size thresholds for micro, small and medium-sized entities, meaning that the classification of many companies will change.

Rachel Reeves, the Chancellor of the Exchequer, has confirmed that Labour will be adhering to their manifesto pledge of keeping the rates for National Insurance (NI), Income Tax, and VAT unchanged for working people. However, the rate of Employers’ NI contributions (NICs) will be increasing.

Are you a new employer or planning to become one? If so, it is essential for you to be made aware of the different factors that often come to light when paying staff, in accordance with the laws concerning minimum wage. We have created a short summary below outlining the key fundamentals of the different aspects surrounding this topic:

HMRC has introduced a cutting-edge online tool to help workers engaged with umbrella companies identify signs of fraud and avoid falling into tax avoidance schemes. This initiative is part of HMRC’s ongoing efforts to protect workers and ensure transparency in payroll processes.

Between May and August, over 100,000 small employers and their business advisers will be tackling an important task: submitting a Declaration of Compliance to The Pensions Regulator (TPR). If you're supporting clients through this process, here's what you need to know.

Why the Declaration Matters

Every employer in the UK has workplace pension duties. This means they must assess their staff, enroll those who qualify into a pension scheme, and contribute to it. The Declaration of Compliance is the formal way of showing TPR that these duties have been met.

Even if an employer doesn’t have staff to enroll, they still need to complete the declaration to confirm they've fulfilled their legal obligations. Missing this step could lead to penalties, so it’s not something to overlook.

The problem of small and lost pension pots has garnered significant attention in recent years, though many may not realize just how widespread the issue is.

According to recent research from the Pensions Policy Institute (PPI), the scale of lost pensions is substantial, as highlighted in their 2024 briefing note.

A split tax code is assigned when your tax-free personal allowance is divided between two or more sources of income, such as two jobs or a job and a pension. Here's how you can get a split tax code and how it works:

1. Understanding the Need for a Split Tax Code 

If you have multiple sources of income, such as:

   - Two or more jobs

   - A job and a pension

   - Multiple pensions

RTI REPORTING CHANGES DELAYED

• Changes Pushed to 2026: HMRC has delayed the requirement to report detailed employee hours via real-time information (RTI) until at least April 2026. This delay allows businesses time to prepare for the changes.

• New RTI Requirements: Employers will need to report actual hours worked or contracted hours for hourly paid employees.

• Self-Assessment Changes: Starting April 2025, self-employed taxpayers and company owners will need to report start/end dates of self-employment and dividends, with additional details required on self-assessment (SA) returns.

According to the latest data from the Office for National Statistics (ONS), the Consumer Price Index (CPI) inflation rate for the year leading up to July 2024 stands at 2.2%. This figure reflects a slight increase from June's annual inflation rate of 2.0%.

In the month leading up to July 2024, the monthly CPI fell by 0.2%. However, when compared to the same period in 2023, which saw a more significant decline of 0.4%, this year's smaller drop has resulted in a 0.2% net rise in yearly inflation. This modest increase has pushed the annual inflation rate slightly higher.

The Office for National Statistics (ONS) has released its August 2024 labour market data, revealing some notable trends in employment across the UK. One key finding is that wage growth has slowed to its lowest rate of increase in two years. While it is too early to draw definitive conclusions from this data, the slowdown in wage growth may be contributing to lower inflation rates. However, the Bank of England's Monetary Policy Committee has indicated that it will remain cautious with adjustments to the bank rate, reflecting the uncertain economic outlook.

Exploring the Future of Automatic Enrolment Beyond Pension Schemes

For the past decade, automatic enrolment in pension schemes has proven to be a game-changer for employee retirement savings. This success begs the question: can similar methods be applied to other areas of employee benefits?

The National Bureau for Economic Research (NBER) sought to answer this by analysing data from two large UK studies on payroll contributions for short-term savings.

Key Insights from the NBER Studies

The Living Wage Foundation has released a policy paper highlighting low pay in the adult social care sector across the UK. The report reveals that 43% of adult social care workers in England earn less than the real living wage, and 80% in London earn below the London living wage.

To address this, the Foundation recommends that the UK government:

Agents will be aware that men born after 5 April 1951 or woman born after 5 April 1953, have until 5 April 2025 to pay voluntary National Insurance contributions to make up gaps from 6 April 2006 if they are eligible. The 5 April 2025 deadline is for paying voluntary National Insurance contributions for tax years 2006 to 2007 to 2017 to 2018 (as they would otherwise have dropped out of time). 

We wanted to let you know that most of your clients can now take advantage of an enhanced online digital service which HMRC and DWP have delivered on GOV.UK or link through the HMRC app.