Policy hub
A: On 7 September 2021, prime minister, Boris Johnson, announced that a new 1.25% Health and Social Care Levy, based on NICs, would be implemented from tax year 2022/23. For the first year of its implementation, the Levy will not impact individuals who are state pension age and above, and still working, as it will be collected via NICs. Currently, those who are state pension age and above are placed on NI category letter C, under which no employee NI deductions are taken. This will remain the case for tax year 2022/23, so they are not impacted. For working age employees, the self- employed and employers, NIC rates will be increased by 1.25% for that year. From tax year 2023/24, however, the Health and Social Care levy will be formally separated out as a deduction in its own right, and NIC rates will revert to 2021/22 levels. At this point, employers are required to clearly state the levy as a new deduction element on employee payslips, and those who are state pension age and above, and still working, will be required to pay the 1.25% levy. n
a PSA, but this has not been agreed with HMRC – is it too late to request an addendum to an existing agreement? A: If an employer has reportable benefits that relate to coronavirus only and they wish to settle the tax on behalf of employees via the PSA, HMRC will not issue an amended P626. Instead, HMRC is informing employers to email lbs.compliance@ hmrc.gov.uk providing details of the items they wish to include. HMRC will add an amendment to the current agreement for the 2020-2021 tax year.
employment since leaving the regular armed forces, and ends twelve months later. For the first year of the policy’s implementation, from April 2021 – March 2022, employers are required to pay the secondary Class 1 NICs due on the earnings of veterans as normal and will have the option to claim it back retrospectively. From April 2022 onwards, a solution will be introduced so that the relief can be applied through PAYE. NIC category letter V will be introduced, and this will mirror category A. HMRC has also confirmed that a new Veterans Upper Secondary Threshold (VUST) will be created. Employer relief can be applied to earnings below the VUST. Employers can claim relief even where the employment starts prior to 6 April 2021 but can only claim for the remaining qualifying period. For reference see: https://bit.ly/2UbXnBu. Q: Following the recent announcement regarding the Health and Social Care Levy, we understand that those who are state pension age and above, and still working, will be required to contribute. How will this work?
See the April edition of HMRC’s Employer Bulletin : http://ow.ly/ lasc30rSCE9.
Q: The company recently employed a veteran. We have confirmed this is their first civilian employment since leaving the army. We are aware that we can reclaim the cost of the employer National Insurance Contributions (NICs), but how is this done? A: The HMRC policy, implemented from 2021, made it possible for employers to claim relief if they employed a veteran during the qualifying period, which commences with the veteran’s first civilian
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| Professional in Payroll, Pensions and Reward |
Issue 74 | October 2021
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