From April 6 employers who have employees under 21 years of age will no longer have to pay Class 1 secondary (employers) National Insurance Contributions on earnings up to the Upper Secondary Threshold (UST) for those employees.
Employees will continue to pay the standard rate of primary (employees) Class 1 National Insurance Contributions through their salary.
Therefore, if your are an employer of somebody aged over 16 but under 21 you will need to choose one of the seven new NI categories when assessing their secondary NIC’s. It will be the employer’s responsibility to ensure that the correct category has been applied.
Beware that if you operate a weekly, two-weekly or four-weekly payroll and the final payday this tax year falls on April 5, it is possible that your employees may underpay tax so it is best to explain it to your employees if they will be affected.
This “extra” payday can happen when the final pay date falls on the last day of the tax year, hence creating a 53-week payroll year.
Employees are therefore given an “extra” proportion of their personal allowance (tax free pay) which results in an underpayment of tax which HMRC will later seek to recover from the employee.
Employment Allowance came into effect in April last year and nearly all employers who pay Class 1 NIC’s are eligible to claim it.
Once you have claimed it for the year ended April 5, 2015, it automatically applies for future years. Therefore, if you are already claiming you do not need to take any action.
From April 2015, the Employment Allowance will be extended to individuals who employ certain care/support workers.
However, households employing nannies and other domestic support remain excluded from claiming the Allowance.
The new rates of Statutory Payments for the 2015/16 tax year were announced in December and are as follows :-
Statutory Sick Pay £88.45 per week, Statutory Maternity Pay, Adoption Pay and Paternity Pay £139.58 per week.
The earnings threshold for entitlement to all Statutory Payments increases to £112 per week.
Auto enrolment applies to every employer with at least one member of staff in the UK. It can take several months to prepare so make sure you are aware of the date it applies to you and if you haven’t already, start your preparations !