Professional October 2021

Payroll news

New Health and Social Care Levy to be introduced PRIME MINISTER, Boris Johnson, confirmed on 7 September 2021 that, in tax year 2022/23, National Insurance (NI) rates for employees, employers and the self-employed will increase by 1.25%. The initial increase will be collected via National Insurance Contributions (NICs), but then it will be ringfenced out as a separate Health and Social Care Levy in tax year 2023/24. From this point, any individuals who are state pension age and above, and still working, will also be required to pay the levy. When this happens, NIC rates will return to the levels that currently apply (in tax year 2021/22). Employee payslips will need to be adjusted to accommodate this change, as the levy will need to appear as a new deduction element from tax year 2023/24. Her majesty’s revenue and customs (HMRC) has published a policy paper relating to the Health and Social Care Levy, which can be located here: http://ow.ly/TGLW30rUvgZ. Autumn Budget to take place on 27 October 2021 HM TREASURY has confirmed that an Autumn Budget will be held on 27 October 2021, so payroll professionals should mark this date in their diaries. The Budget will set out the government’s spending priorities for the next three years. The associated news story can be located here: http://ow.ly/Btig30rUvhU.

State Pension ‘triple lock’ suspended for 2022/23 ORDINARILY, THE State Pension increases by the greater of earnings growth, inflation or 2.5%. This is what is referred to as the ‘triple lock’ guarantee. Due to the impact that the coronavirus job retention scheme has had on earnings growth (as people come off furlough and return to full pay), for 2022/23, the ‘triple lock’ will be suspended for one year only. For 2022/23, the State Pension will increase by whichever is highest out of inflation or 2.5%. The ‘triple lock’ will then be restored for the remainder of this Parliament, which ends in 2024. The oral statement on the subject, from the secretary of state for work and pensions can be accessed here: http://ow.ly/CNTG30rUvqg.

Closure of the coronavirus statutory sick pay (SSP) rebate scheme ELIGIBLE EMPLOYERS have been able to claim back up to two weeks’ worth of SSP if they have paid employees sick pay for coronavirus-related absence. They were able to do so if they: ● were paying an employee who was eligible for SSP due to coronavirus ● had a PAYE (pay as you earn) payroll scheme that was created and started on or before 28 February 2020 ● had fewer than 250 employees across all PAYE payroll schemes as of 28 February 2020. Many payroll professionals and organisations have been asking when the rebate scheme will end, and guidance has been updated to confirm that claims can only be made for employees who were off work on or before 30 September 2021. The updated guidance can be located here: http:// ow.ly/1XNU30rUT4E.

Advisory fuel rates THE ADVISORY fuel rates changed effective 1 September 2021, and apply, until further notice, to all journeys made on or after this date. For one month from the date of change, employers can choose to use either the previous or revised rates. Employers may therefore make or require supplementary payments if they so wish but are under no obligation to do either.

Diary dates

5 October 6 October

Last day of tax month 6

First day of tax month 7

Last day for submitting a real time information employer payment summary to apply to tax month 6 Deadline for payment of PAYE and NICs etc to HMRC’s Accounts Office by non-electronic method Deadline for payment of PAYE and NICs under a PAYE Settlement Agreement (PSA) by non- electronic method Deadline for payment of PAYE and NICs etc to HMRC’s Accounts Office by electronic method Deadline for payment of PAYE and NICs under a PSA by electronic method

19 September

Engine size Up to 1400cc

Petrol

Diesel

LPG

12p

7p

10p

1401cc to 1600cc 1601cc to 2000cc

14p

8p

12p 15p

Over 2000cc

20p

12p

22 October

HMRC will accept that if the employer pays up to 4 pence per mile when reimbursing their employees for business travel in a fully electric company car there is no taxable profit and no class 1 NICs to pay. The advisory electricity rate will be published alongside advisory fuel rates and kept under review.

5 November

Last day of tax month 7

6 November

First day of tax month 8

| Professional in Payroll, Pensions and Reward | October 2021 | Issue 74 22

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