The new tax year 2015-16 is almost with us. There are a few changes for individuals and employers to be aware of.
Income tax
From 6th April 2015 the personal tax allowance will increase to £10,600 for the 2015/16 tax year. Taxpayers will pay 20% on the next £31,785 of their income, so higher rates of tax will be applied to income above £42,385.
A new married couples’ allowance is being introduced from April 2015. This means that if eligible you could transfer up to £1,060 of your allowance to your spouse or civil partner. Your partner would then save up to £212 tax during the tax year. To qualify, one spouse must have a total income no higher than £10,600, and the other must be earning between £10,601 and £42,385. One person per couple can register here https://www.gov.uk/marriage-allowance
Employer’s National Insurance
There is some good news for certain employers for the 2015/16 tax year. The NIC allowance is continuing, so employers will not need to pay the first £2,000 of the 13.8% employer’s national insurance liability. It’s a good idea to check your payroll software is set up to enable this deduction.
Also, from April 2015 employers’ NICs on payments to employees aged under 21, and apprentices under 25 will be nil, on salaries/wages up to £42,385. The normal 13.8% rate will apply to amounts in excess of that threshold.
The NIC deducted from employees is not affected by the above.
Pensions
There have been wide-ranging changes to the way people can pay into pension schemes and withdraw cash. The tax savings or consequences of your decisions could be significant, and you are strongly advised to seek advice from a regulated financial advisor before making any changes, or simply to review your pension status.
Payroll reporting
Penalties for late submissions of PAYE reports (RTI / FPS / EPS reports submitted online on or before the wages/salaries payment date) are due to begin in March 2015. 3 days’ grace will be allowed for employers with fewer than 50 employees.
Penalties start at £100 per late return, further details are here https://www.gov.uk/what-happens-if-you-dont-report-payroll-information-on-time
Auto-enrolment pension schemes
Between now and 2017 employers with small numbers of employees will be contacted by the Pensions Regulator, and will need to have a compliant pension scheme for all eligible workers. Employers should ensure they understand their obligations and act in plenty of time to set up a scheme before their compulsory staging date. The staging date is the date on which employees must be enrolled and the scheme begins. Information can be found on the Pensions Regulator website, and/or from your financial advisor. http://www.thepensionsregulator.gov.uk/employers.aspx
If you would like any help with any of the above please contact us.