March 21, 2017 at 6:16 AM
The Budget announcement, and subsequent withdrawal, regarding the increase in NI contributions for the self-employed has been a debacle. Philip Hammond was supposed to be a safe pair of hands as Chancellor of the Exchequer, but any more gaffes like this and he will earn the nickname “Butterfingers”!
Simplifying the tax system is a noble aim, and the abolition of Class 2 NIC from 6th April 2018 is a good step along this road. It seems that the Chancellor was trying to claw back some of this lost revenue by his Class 4 NIC hike, but this was politically unacceptable.
The shortfall of revenue that the proposed increase would have raised will now have to be found from elsewhere. No doubt there will be a lot of (clearer!) thinking done between now and the next Budget in the Autumn to decide how to raise this £2 billion shortfall. One of the targets being discussed is the removal of higher rate tax relief on pension contributions. There are not many other areas that can be attacked, given the Tories pledge not to increase income tax or NIC during the period of this Parliament. Or could a snap General Election allow them to re-write their pledges, in which case some of these taxes might come under attack again?
For now, it’s “as you were”.
March 15, 2017 at 8:52 AM
With the new tax year looming, the payroll year end is at the top of the list of ‘to do’ for all of us processing payrolls. I thought it might helpful if I run through a few of the things that we need to keep in mind this month and into the next:
If you haven’t already ordered, and don’t want to waste ink, the Revenue are still providing blank P60 forms for free, just search for the online order form on HMRC.GOV.UK.
Tax codes will have been arriving in the mailbox for the new year since February, but we must not forget that there is a general uplift for all those without a personal notice, because the personal allowance has raised by £500, so those with an ‘L’ code will need 50 adding to the number, those with an ‘M’ code will need 55 adding, and those with an ‘N’ code will need 45 adding. Don’t forget to remove the ‘week 1/month 1’ flags too. All these changes apply for payrolls run on or after 6 April.
The other big change on 1 April will be the rise in the National Minimum Wage and the National Living Wage. This change will now be annual, so will not change again until April 2018. The NLW for all those 25 and over will be £7.50 per hour. The complete table can be found on the GOV.UK website.
Finally, for everyone else who hasn’t already reached their staging date for auto-enrolment will do so this year, a lot of people have been leaving it far too late to make provisions.
If you need any further help with fulfilling your obligations please contact Julie Romain on 01522 815100.