HOT TOPIC
NMW rate from 1 April 2024
Increase in pence
Percentage increase
NLW (21 and over)
£11.44
£1.02
9.8%
18-20-year-old rate
£8.60
£1.11
14.8%
16-17-year-old-rate
£6.40
£1.12
21.2%
Apprentice Rate
£6.40
£1.12
21.2%
Accomodation Offset
£9.99
£0.89
9.8%
aged 21 and over from the same date, meaning the abolition of the 21-22-year- old rate going forwards. The table above shows the new rates and associated percentages in full. The government accepted the Low Pay Commission’s recommendations on the NLW / NMW rates to be applied, in full. What’s in store for pensions? Although not administered through payroll, we like to keep up to date with what’s happening with the state pension, as there’s so much focus at the moment on ensuring people save enough for a comfortable retirement. The government confirmed it will honour its ‘triple lock’ pledge, so the state pension will be uprated by 8.5% in April 2024. This is in alignment with average earnings growth. As a reminder, the ‘triple lock’ means that the state pension increases each tax year by the highest of: l 2.5% l average earnings growth l inflation. To address the longstanding issue of ‘small pension pots’, the government has confirmed it will launch a call for evidence which considers the benefits of a lifetime provider model. In a nutshell, this would mean when an individual moves to a new employer, they could have the right to nominate an existing pension scheme for the new employer to pay into. This could have huge ramifications for payroll professionals, as they could potentially be
paying contributions across to multiple pension providers.
6.7% for 2024/25. This will have an impact on universal credit payments. Additionally, the blind person’s allowance (BPA) and the married couple’s allowance (MCA) will be increased by the same rate, which means the new rates for 2024/25 will be £3,070 for the BPA and between £4,280 and £11,080 for the MCA. That’s quite a lot to digest… While the autumn statement 2023 didn’t contain loads of information for payroll professionals, the changes announced which will impact our industry are substantial, and payroll departments and software developers will need to start to prepare now. We know we can handle a mid-tax year NI rate change as we’ve done it before, because let’s face it, we’re amazing. But there’s work to be done to facilitate this again. The CIPP is recommending that employers use payslip messing in January. This is to notify employees as to why there’s a change to their NI contributions. We are making this recommendation as research from our Payslip Statistics Report 2023 highlighted the fact that, of those employers who used the payslip messaging recommended by government regarding the health and social care levy, 77% stated they didn’t receive any additional queries around the changes to NI into the payroll department. Providing this message will empower employees to understand their payslips without the need of having to contact the payroll department. You can read the report here: https:// ow.ly/4XL550QaMnh. We’re sure further details will be made available relating to the changes announced, and we will, of course, keep you updated as soon as we hear anything. n
Extensions for employers (NICs reliefs) In the autumn statement’s accompanying documents, it was confirmed that: l the current employer NICs relief granted to employers of eligible veterans has been extended for another year, into 2024/25 l the investment zones programme in England will be extended from five years to ten, meaning an extension to the employer NICs reliefs on offer for employers based in investment zones, for eligible employees l NICs reliefs for employers with a physical premises in a freeport tax site will now be available until September 2031 in English freeports, for eligible employees. Changes to benefits All working age benefits delivered by the Department for Work and Pensions will be uprated by the September 2023 consumer price index inflation rate of “The national living wage will also apply to everyone aged 21 and over”
“The main rate of class 1 National Insurance for employees would be reduced by two percentage points, from 12% to 10%”
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| Professional in Payroll, Pensions and Reward |
Issue 96 | December 2023 - January 2024
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