As ever the “devil is in the detail” and as the Annual Statement 2013 runs to a mere 122 pages – you can expect us to be providing you with more detail in the coming days but in the meantime the CIPP policy team have put together the following highlights for your delectation and delight!
Bad news buried in a one liner – Apprenticeships
We have said it before and we will say it again, why is it that government buries potentially bad news for payroll through a one liner? The Chancellor said and we quote “To build on this success, the government will reform apprenticeship funding to ensure that employers are at the heart of the system and it delivers skills that meet the demands of UK businesses. The government will put business at the centre of the apprenticeship system by enabling employers to receive funding for the training costs of apprentices directly through an HMRC-led system and ensuring that employers contribute . This change will raise apprenticeship standards and ensure they align with the needs of business.” CIPP comment So what does this mean for payroll? You will recall the recent consultation BIS conducted where they had three options up for debate. Option 2 was where employers would receive their funding through the PAYE system. Call us sceptical but “an HMRC- led system” would imply that option 2 is going to happen. Why are the CIPP really, really disappointed by this news? Well as we all know this will have to go via our real time reporting returns. Whilst RTI has been successful for many employers there are still issues surrounding the reconciliation of accounts i.e. what the employer has reported and paid versus what HMRC says is due. Imagine now putting something that isn’t in fact earnings into the mix; potentially a disaster. As our introduction states the Chancellor also announced further investment in the public sector; let us hope this includes supporting HMRC with their systems which in turn will support employers. The CIPP will as you would expect, be champing at the bit to be part of the future discussions on how this will be implemented; assuming we can’t get them to do a U-turn of course! The Chancellor clearly supports apprenticeship type schemes as he has also linked the Welfare caps to young people. Whilst he has said Job Centre Plus will be given more money to help those 16 and 17 year olds, which they don’t currently assist, for all young people; from day one of any benefit claim, those without a level 2 qualification in English and maths will be required to do up to 16 hours per week of training alongside jobsearch; if they don’t they risk losing their benefits. In addition after 6 months on Job Seekers Allowance all claimants will be required to participate in work a work experience placement, a traineeship or community work placement programme.
Personal Allowance, Rates of Tax, National Insurance Contributions for 2014/15
As announced at Budget 2013, people born after 5 April 1948 will be entitled to a basic personal allowance of £10,000 for 2014/15. The ‘higher rate threshold’ (the sum of the basic personal allowance and the basic rate limit) will be £41,865. As the personal allowance will be £10,000 for 2014/15, this means that the basic rate limit will be £31,865 the rates of tax will be announced at Budget 2014. For 2014/15, there are no changes to the percentage rate of contribution for Class 1, Class 1A, Class 1B and Class 4 National Insurance contributions but there are changes to all of the thresholds and limits. The weekly rates for Class 2 and Class 3 NICs will be increased. The
CIPP Policy News Journal
16/04/2014, Page 30 of 519
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