The Chartered Institute of Payroll Professionals ……………………………………………………………Policy News Journal
This consultation closes 3 January 2017.
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Update on KC National Insurance number prefix 16 November 2016
The majority of employers will now be able to submit RTI data for employees using the KC National Insurance number prefix.
HMRC’s SDS Team has confirmed that the live (production) environment for Internet users has been updated to accept the wider range of NINO prefixes, including KC, for all RTI messages.
The equivalent changes to the test services will be released on 28 November (TPVS/VSIPS) and 12 December (Local Test Service).
Some software products, including HMRC’s Basic PAYE Tools, may not be updated before April 2017. If this applies to you then you should continue to follow this guidance when submitting your RTI:
the National Insurance number field should be left blank you should make sure the employee address field is completed in those cases.
If you/your employee has a ‘KC’ National Insurance number, there is no need to request a new one.
You should continue to apply tax codes and notices you receive from HMRC in the normal way.
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Draft legislation for the abolition of Class 2 contributions 7 December 2016
Draft legislation has been published which makes the relevant changes to abolish Class 2 NICs from 6 April 2018.
The 2016 Autumn Statement confirmed the government’s intention to abolish Class 2 NICs from 6 April 2018.
Geographical extent – The changes will extend to all four nations of the UK. The draft legislation details the legislative amendments required for both Great Britain and Northern Ireland.
Class 2 National Insurance contributions (NICs) are flat-rate weekly contributions paid by the self-employed to gain access to contributory benefits. The 2016 Autumn Statement confirmed the government’s intention to abolish Class 2 NICs from 6 April 2018. This means that instead of paying 2 classes of NICs (Class 2 and Class 4), the self-employed will pay just one class of NICs (Class 4) in the future. This builds on recommendations of the Office of Tax Simplification and will simplify the NICs system for millions of self-employed people. Draft legislation has been published to change the structure of Class 4 NICs to introduce the Small Profits Limit. Changes will also be made to benefit entitlement rules to allow Class 4 NICs to count for benefit entitlement purposes where annual taxable profits are at (or exceed) the Small Profits Limit. Class 3 NICs which can be paid voluntarily to protect entitlement to the State Pension and Bereavement Benefit will be expanded to give entitlement to Maternity Allowance and contributory Employment and Support Allowance for the self- employed.
A tax information and impact note has also been published.
If you have any questions about this change, please contact Christopher Orton on email: christopher.orton@hmrc.gsi.gov.uk .
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The Chartered Institute of Payroll Professionals
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