PAYROLL INSIGHT
Collection of student loans There is no change to the percentage rate of student loan deductions from 6 April, but the earnings threshold for both plan types increase, as shown in Table G.
Table G – Student loan earnings threshold
Threshold
Table K – Car and van fuel benefit Car £23,400 Van £633 ● Fuel for cars and vans – The taxable benefit of fuel (other than electricity) for a car or van provided to an employee by reason of the employment from 6 April is calculated using the amount shown. Benefits in kind ● Optional remuneration arrangements (OpRA) – Transitional provisions (‘grandfathering’) that applied to some benefits in kind (typically under salary sacrifice arrangements) provided via OpRA cease to apply on 6 April. For further guidance see http://bit.ly/2uwUnxD. ● Employer-supported childcare (ESC) – The tax-exemption for ESC ceases to be available to any employee joining the scheme on or after 6 April.
Plan
Annual
Month
Week
1 2
£18,330 £25,000
£1,527 £2,083
£352 £480
Automatic enrolment New qualifying earnings (QE) limits (Table H) and new workplace pension contribution rates (Table I) apply from 6 April.
Table H – Workplace pension earnings trigger/limits Weeks Months 1 2 4 1 3 6
12
Earnings trigger QE lower limit QE higher limit
£192 £384 £768 £833 £2,499 £4,998 £10,000 £116 £232 £464 £503 £1,508 £3,016 £6,032 £892 £1,783 £3,566 £3,863 £11,588 £23,175 £46,350
Table I – Workplace pension contribution rates
Employer minimum contribution
Member’s contribution
Total minimum contribution
Effective date
6 April
2%
3%
5%
PAYE ● Amend tax codes – The numerical value of tax codes carried forward from tax year 2017–18 to 2018–19 are to be increased by the number shown in Table J. Change codes with ‘W1’ or ‘M1’ basis to cumulative. (This uplift may be globally actioned in payroll software.) Do not change the tax code tax year 2018–19 for any employee who leaves before 6 April, even if they will be paid on or after this date. However, the standard rule for using code 0T or S0T on non- cumulative basis will apply. ● Emergency tax code – The new emergency tax code from 6 April is 1185L.
● PAYE threshold – From 6 April, the new weekly threshold for PAYE (pay as you earn) is £228 (and £988 monthly). ● New employee – If an employee commences between 6 April and 24 May refer to http://bit.ly/2F6lUvQ for guidance. ● Real time information – ❍ For each PAYE scheme, either the last full payment submission (FPS) or the employer payment summary (EPS) must indicate that it is the last submission for tax year 2017–18. Corrections to 2017–18 can be made by FPS no later than 19 April, after which they must be made via the earlier year update (EYU). ❍ Employers payrolling the cash equivalent of the taxable benefit of a car provided by reason of the employment should begin reporting details in the FPS returns from 6 April.
Table J – Increase numerical value of tax codes
Tax codes with suffix
Increase by
L
35 39
M
N
31
| Professional in Payroll, Pensions and Reward | April 2018 | Issue 39 24
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