HMRC has released a new tool to help individuals understand why they’ve been issued a new tax code. There are several different reasons why HMRC will issue a new code as listed below:

• you start to get income from an additional job or pension
• your employer tells HMRC you have started or stopped getting benefits from your job
• you get taxable state benefits
• you claim Marriage Allowance
• you claim expenses that you get tax relief on

As the employer or payroll bureau will not be informed why an employee’s tax code has been changed this tool should prove very useful in understanding the tax code change and reasons behind it.

Due to the coronation of King Charles III on the 6^th May 2023 there will be an additional bank holiday on Monday 8^th May 2023. Employees are entitled to a minimum 5.6 weeks holiday per holiday year, though there is no legal requirement for employers to give bank holidays as paid leave.

HMRC have updated their guidance on National Insurance due to the reversal of the National Insurance 1.25 percentage point increase from 6^th November 2022.

…and for some news closer to home. We are working in partnership with Modulr to make employee payments on behalf of employers. We provide a secure, safe and efficient payment service, saving employers the time and effort involved in paying employees. Not only can we make the employee payments, but we can also pay HMRC the taxes due on the employer’s behalf, ensuring not only the correct amount is paid but on time as well!

There are no extra fees for last minute payments, and we don’t charge for changes! We realise the importance of accurate and on time payroll and in conjunction with Modulr we can provide a complete payroll service.

From the 6^th November the 1.25 percentage point increase which came into force from the start of the 2022/23 tax year will be reversed. All payroll software providers should publish updates to remove the uplift. The Health and Social Care Levy of 1.25% will no longer go ahead as it was planned to from April 2023.

In other news, HMRC have released the October Employer Bulletin. As usual the bulletin covers a wide range of subjects, outlining updates and providing important information.

The bulletin shared details of a new starter checklist. This now can be completed online by the employee and then downloaded and passed to the employer. It should also be noted that if an employee has a student loan, even if they have a P45 they will still need to complete a starter checklist to ensure the correct student deductions are made.

From the 6^th November 2022 the 1.25 percentage point uplift in National Insurance will be reversed out. This also means the Health and Social care Levy will not go ahead as planned from April 2023.

As well as the NI reduction, the government will reduce the basic rate of Income Tax to 19% from April 2023 and remove the Additional Rate 45% tax band for earnings over £150,000/pa.

The following link is to the Chancellor’s growth plan released 23^rd Sept 2023.

The FSB has written a very interesting article about a recent landmark ruling by the Supreme Court relating to holiday entitlement and pay.

HMRC’s guidance on calculating holiday entitlement and pay for workers who work irregular hours, zero hours or casual hours is non-existent making it very hard to know the “correct” way to carry out these calculations.

The ruling doesn’t provide new legislation but does potentially give employers at least some guidance in approaching holiday calculation for workers who work irregular hours, zero hours or casual hours.

HMRC have released their latest Agent Update. As ever these updates cover a wide range of subjects and are especially useful to payroll professionals, accountants, but also any business owners.

HMRC are introducing a new payment method for employers to pay taxes to HMRC. The variable Direct Debit payment plan will be available from 19^th September 2022.

Employers will be able to set up a DD instruction, authorising HMRC to collect the taxes due directly from the business bank account based on the filed submissions.

The following charges will be collected by HMRC if signed up to the variable payment plan:

• Full Payment Submission
• Employer Payment Summary
• Construction Industry Scheme
• Apprenticeship Levy
• Class 1A National Insurance
• Earlier Year Update

Unfortunately, only the employer will be able to create, view and cancel the DD, meaning agents such as payroll bureaus wouldn’t be able to do this on the employers’ behalf.

Further information can be found in the August 2022 HMRC Bulletin.

The NI Primary Threshold has now increased to £12,570. This means up to £242/wk or £1,048/mth can be earned before paying any employees National Insurance. It is worth keeping in mind that for directors, who’s NI is calculated on an annual basis, the threshold is £11,908 this tax year due to pro-rata.

With the introduction of the Health and Social Care Levy and the change to the Primary Threshold (the threshold at which employees NI is due) from July, HMRC has released a new NI tool. The tool provides employees with an estimated difference in NI payable with the NI changes introduced.

The online tool can be found here!

HMRC have released their latest Employer Bulletin. As always, these bulletins are worth a read if you are an employer to help stay up to date with any changes.

The standout update, which has already been widely advertised, is the increase in the National Insurance Primary Threshold. The Primary Threshold is the threshold at which employees NI starts to be deducted. It is worth noting that for directors, who’s NI is calculated on an annual basis, the increase will be pro-rata’d to £11,908 for 2022/23.

To read the bulletin please follow the link!