The start of the new 2019/20 tax year brings changes to pension contributions, the National Minimum Wage, statutory payments and the Personal Allowance. Here we detail the changes and the actions we may need to take as your Payroll Services provider.
Automatic Enrolment – Workplace pensions contributions to increase
Employers’ contributions will also increase from 2% to 3%.
The table below shows the new minimum contributions rates to be collected from 6 April:
Payroll actions – pension contributions
If we manage pension deductions for you, we will automatically make the statutory increases from the first payroll period following 6 April 2019. If you wish to make changes to contributions percentages that are different from the minimum rates, please contact us on 01772 431233 or email firstname.lastname@example.org.
Where employees or employers already make contributions above these new minimum rates, we will not make any changes unless the employer asks us to.
National Minimum Wage to go up
There are five different National Minimum Wage rates dependent on age and employment status, for example over 25s and Apprentices. These will increase from 6 April 2019.
The table below gives details of the new rates:
Payroll actions – National Minimum Wage
It is the responsibility of the employer to ensure that employees are being paid in line with the new rates from April 2019. If you need to make changes to your employees’ hourly rates or salaries, please let us know as soon as possible and in advance of your first pay period following 6 April.
Where we hold details of the hours worked and hourly rates, we will check to ensure the legal minimums are being met.
The table below shows the rates for statutory payments (including statutory sick pay and statutory maternity pay) that will be payable from 6 April 2019:
Income Tax Personal Allowance
From 6 April, individuals will be able to earn an additional £650 a year before becoming liable for Income Tax. The new Personal Allowance for the tax year 2019/2020 will be set at £12,500.
Payroll actions – Personal Allowance
We will ensure that employees who have full personal allowance have the correct tax code 1250L.
Emergency tax codes will be 1250L W1, 1250L M1, of 1250L X.
UK Tax Rates (except Scotland)
The below table shows the tax rate bands effective from 6 April 2019 (excludes Scotland).
The Employment Allowance
The Employment Allowance was introduced in 2014 to help companies reduce their employer class 1 National Insurance (NI) contributions. Most businesses can claim Employment Allowance with the exception being companies with a sole employee who is also a director.
The allowance was increased to £3,000 on 6 April 2016 and will remain the same for 2019-2020 tax year.
Need help managing your Payroll?
Outsource your Payroll to RfM Accountants and we’ll ensure your staff are paid accurately, on time and with the minimum of fuss – so everyone will be happy come payday.
Call 01772 431233 or email email@example.com to request a quote.