Getting payroll right in the new tax year

30 March 2017

There are a number of changes taking place from April 2017 and you need to ensure that you have addressed them and are operating correctly within the new rules.

Owner-managed businesses who adopt a nominal salary up to the Class 1 National Insurance earnings limit will need to increase their salary to £680 per month or £8,164 per annum.

The Apprenticeship Levy requires any employer with a pay bill in excess of £3 million to pay 0.5% of their pay bill alongside their normal PAYE deductions.

Any businesses that employ individuals and pay the National Living Wage or the National Minimum Wage will need to increase their hourly rates as follows:

Rate from: 1 October 2016 1 April 2017
NLW for workers aged 25 and over £7.20* £7.50
NMW main rate for workers aged 21-24 £6.95 £7.05
NMW 18-20 rate £5.55 £5.60
NMW 16-17 rate £4.00 £4.05
NMW apprentice rate** £3.40 £3.50

*introduced and applies from 1 April 2016

**the apprentice rate applies to apprentices under 19 or 19 and over and in the first year of their apprenticeship.

Not only are there financial penalties for making errors but it can also be a criminal offence so it is vitally important to ensure that you have adopted these changes.

For guidance and advice on any payroll related issues, please contact me or your local UHY adviser.