Payroll news
Statutory payments 2021–22 IN EARLY December, the Department for Work and Pensions published a policy paper on the proposed levels of various statutory payments from April 2021 (http://bit.ly/3p2hTOJ). The weekly rate of statutory maternity pay (SMP), statutory adoption pay (SAP), statutory paternity pay (SPP), statutory shared parental pay (SShPP), and statutory parental bereavement pay (SPBP) would increase by 77p to £151.97 from Sunday 4 April. The daily amount would therefore be £21.71. If the employee’s maternity, adoption, shared parental, paternity or parental bereavement pay period started on a day other than a Sunday, the new weekly rate does not apply until the beginning of the first complete SMP-, SAP-, SPP-, SShPP-, SPBP-week following Sunday 4 April. The weekly rate of statutory sick pay would increase by 50p to £96.35 from 6 April 2021. Minimumwage rates THE SPENDING Review 2020 document (https://bit.ly/3rF2wOi), published by HM Treasury, indicates that following recommendations of the Low Pay Commission (LPC), minimum wage hourly rates will increase in
Advisory fuel rates THE ADVISORY fuel rates changed with effect 1 December 2020 and apply, until further notice, to all journeys made on or after this date. For one month from the date of change, employers could 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.
Engine size
Petrol
Diesel
LPG
Up to 1400cc
10p
7p
8p
1401cc to 1600cc
11p
8p
1601cc to 2000cc
10p
Over 2000cc
17p 12p 12p
Tax avoidance schemes PROMOTIONAL GUIDANCE to support its Tax avoidance – don’t get caught out campaign (http://bit.ly/2KdJWvN) was published by HMRC in November 2020. Its Spot the signs of tax avoidance guidance (http://bit.ly/2Wnvm7e) includes ‘signs’ as such as: cash bonuses, an ‘enhanced’ scheme, and the scheme being ‘approved’ by HMRC. Included in the campaign are two case studies illustrating how people get caught up in such schemes. Tanya, a nurse, who wanted the benefits of higher pay joined a tax avoidance scheme offered by the payroll services umbrella company which had been recommended by the agency. She was left with an unexpected tax bill, on top of the high fees she had paid to the umbrella company for using the scheme. Employers can use their own rate which better reflects circumstances if, for example, the cars are more efficient or if the cost of business travel is higher than the guideline rate. HM Revenue & Customs (HMRC) will accept that if the employer pays up to 4 pence per mile when reimbursing employees for business travel in a fully electric company car there is no taxable profit and no class 1 National Insurance contributions (NICs) to pay.
April 2021, as follows, subject to Parliamentary approval: ● individuals aged 23 and over: £8.91 (see note below)
● 21–22-year-olds: £8.36 ● 18–20-year-olds: £6.56 ● 16–17-year-olds: £4.62 per hour ● apprentices: £4.30 per hour.
The daily accommodation offset will increase to £8.36. Note the change to age 23 for the minimum/living wage.
Contractual non-compete clauses THE DEPARTMENT for Business, Energy and Industrial Strategy has launched a consultation exercise on measures to reform post-termination non-compete clauses in contracts of employment (https://bit.ly/3oYiaSJ). The closing date for comments is 26 February 2021. The government is particularly interested in views on an option to make such clauses enforceable only when the employer provides compensation during the term of the clause, thereby ensuring individuals receive a fair settlement if they are restricted from joining or starting a business within their field of expertise. In addition, the government is also interested in views on the potential to place statutory limits on the length of non- compete clauses and on an alternative option to make post-termination, non-compete clauses unenforceable.
Diary dates First day of tax month 11
6 February
Last day for submitting a RTI employer payment summary to apply to tax month 10 Deadline for payment of PAYE and NICs etc to HMRC’s Accounts Office by non-electronic method – Add ‘2110’ to accounts office number to ensure accurate payment allocation Deadline for payment of PAYE and NICs etc to HMRC’s Accounts Office by electronic method – Add ‘2108’ to accounts office number to ensure accurate payment allocation
19 February
22 February
UK Budget
3 March 5 March 6 March
First day of tax month 12 First day of tax month 11
| Professional in Payroll, Pensions and Reward | February 2021 | Issue 67 24
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