Payroll news
Income tax for 2021/22 SUBJECT TO relevant confirmation, from 6 April 2021 the annual personal income tax allowance will increase to £12,570, and the income tax bands will be as shown in the tables.
Class 1 NICs for 2021/22 SUBJECT TO relevant confirmation, the following will apply from 6 April 2021. ● There are no changes to the rates of class 1 NICs. ● Some of the earnings thresholds and limits for class 1 NICs are changing; see the table. (Note that the upper secondary threshold and the apprentice upper secondary threshold are the same as that for the upper earnings limit.)
England/Wales/Northern Ireland Rate
Band
Weekly £ Monthly £ Annual £
% Taxable income £
120
520
6,240
Lower earnings limit
Basic
20
1–37,700
184
797
9,568
Primary threshold
Higher
40
37,701–150,000
170
737
8,840
Secondary threshold
Additional
45
Over 150,000
967
4,189
50,270
Upper earnings limit
Scotland
PAYE – tax codes 2021/22 THE 2021 P9X ( Tax codes to use from 6 April 2021 ) notice (https://bit.ly/3rz88IY) indicates that: ● in line with the proposed increase in the personal allowance (see top of column one), the emergency tax code will be 1257L (cumulative or non-cumulative) ● suffix letter tax codes are to be increased for employees for whom a P9 coding notice for tax year 2021/22 is not received from HMRC, as follows: L by 7 points, M by 8 points, and N by 6 points.
Rate
% Taxable income £
Starter
19
1–2,097
Basic
20
2,098–12,726
Intermediate
21
12,727–31,092
Higher
41
31,093–150,000
Top
46
over 150,000
Public sector exit cap A STATUTORY cap of £95,000 limits the amount a public sector employer can pay when an employee leaves their employment from 4 November 2020. Included are payments employers make to pension funds to ensure long-serving staff do not receive reduced pensions. Any worker over the age of 55 made redundant will be affected by the change. https://www.lgpsmember.org/news/latest.php And briefly… ● Form SSP1 – A new version of this form, which employers use if an employee is either not entitled to or payment of statutory sick pay is about to end, can be found here: https://bit.ly/3jya8yk. ● Employer Bulletin: UK Transition Special Edition – Published by HMRC, this contains information relating to new rules relevant to business travellers and social security coordination (http://bit.ly/3jzcFbE). ● Employer Bulletin – The February 2021 issue containing a lot of important information can be found here: http://bit.ly/374mx87.
Cars and vans: taxable benefits IN FEBRUARY, the Treasury announced (http:// bit.ly/3p5xMTW) that the van benefit charge and the fuel benefit charges for cars and vans will be uprated from 6 April 2021, as follows: ● car fuel benefit charge multiplier will be £24,600 employees who have a cycle or cyclists’ safety equipment provided after 20 December 2020 will need to meet all the conditions for the exemption to apply. qualifying journeys condition for the exemption will not be applied until after 5 April 2022. However, Earnings for AE SUBJECT TO relevant confirmation, for tax year 2021/22 the earnings trigger and limits for purposes of automatic enrolment (AE) will be as follows: ● earnings trigger: £10,000 ● lower limit for qualifying earnings band: £6,240 ● upper limit qualifying earnings band: £50,270. Tax exemption for cycles etc THE ‘MAIN use’ test for the income tax exemption for cycles and related safety equipment provided by employers to employees, has been temporarily modified because of the pandemic’s impact on limiting ‘qualifying journeys’ (http://bit.ly/2EuqLY2). Provided employees have joined a scheme, with a cycle or cyclists’ safety equipment provided to them on or before 20 December 2020, the
Diary dates
First day of tax month 12
6 March
Last day for submitting a RTI employer payment summary to apply to tax month 11 Deadline for payment of PAYE and NICs etc to HMRC’s Accounts Office by non-electronic method. Add ‘2111’ to accounts office reference to ensure accurate payment allocation Deadline for payment of PAYE and NICs etc to HMRC’s Accounts Office by electronic method. Add ‘2111’ to accounts office refer- ence to ensure accurate payment allocation.
19 March
22 March
Last day of tax month 12, tax year 2020/21
5 April
● van benefit charge will be £3,500 ● van fuel benefit charge will be £669.
First day of tax month 1, tax year 2021/22
6 April
| Professional in Payroll, Pensions and Reward | March 2021 | Issue 68 22
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