POLICY HUB
records for no less than three years after the end of the tax year to which they relate. For reference, see: https://bit. ly/3wkIs76 and https://bit.ly/3Ld5OAO. Correct NI categories Q: A client is employing a veteran as an apprentice. We’ve confirmed this is the veteran’s first employment since leaving the armed forces, but we’re unsure what NI table letter to apply to the payroll record. A: Although the NICs ultimately calculated for employees on categories H and V would be no different, page four of HMRC's CA38 booklet confirms that category H takes precedence over category V. For reference, see: https://bit. ly/3wqIWIz. Establishing qualifying years for state pension Q: How is a qualifying year for a state pension established? A sole director of a limited company is taking a very low salary as it’s his first year in business and he’s concerned this will affect his entitlement to a state pension. A: A qualifying year for state pension can
be made up through combining earnings, NI credits, self-employment and voluntary contributions. A qualifying year can be built up if an individual is: ● employed and earning over £190 a week (the primary threshold for NI contributions in 2022/23) from one employer and paying NI contributions (NICs) ● employed and earning between £123 and £190 a week (2022/23) from one employer and is treated as having paid NICs ● self-employed and playing class 2 NICs contributions, which are £3.15 a week for tax year 2022/23 ● making voluntary NICs, which are £15.85 per week for 2023/23 ● receiving NI credits. An individual will need 52 times the lower earnings limit (LEL) of NICable earnings and then get a qualifying year, which is 52 x £123 (for tax year 2022/23) = £6,396. Documents such as a P60 or payslips can be used as evidence that the earnings have been reached and a qualifying year for a state pension will have been achieved. For reference, see: https://bit.ly/3M8Ymb7.
How exactly is a qualifying year for the state pension established?
Mileage allowance payments Q: Can you confirm if the limit of
approved miles for privately owned cars is based on the number of miles travelled, or paid, in a tax year? A: HMRC guidance states: “Mileage allowance payments (MAPs) are what you pay your employee for using their own vehicle for business journeys. You’re allowed to pay your employee a certain amount of MAPs each year without having to report them to HMRC. This is called an ‘approved amount'...To calculate the ‘approved amount’, multiply your employee’s business travel miles for the year by the rate per mile for their vehicle.” The period covered is the tax year itself, so the figure used in the calculation is the actual business mileage in the tax year. For reference, see: https://bit.ly/3NbGvQY and http://ow.ly/Wk9430smzUb. n
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| Professional in Payroll, Pensions and Reward |
Issue 82 | July - August 2022
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