THE LIVING WAGE
The new living wage from April 2016 will be £7.20 per hour for those aged over 25. This is an increase of 7.5% on the current National Minimum Wage rate of £6.70 for over 25’s.
It is recommended that you review your current payroll costs to ascertain what impact, if any, the new rates will have on your business.
The national living wage is planned to increase to £9 per hour by 2020 which is an increase of 34% on today’s rates.
HMRC are setting up a new unit to deal with employers who do not comply. Employers could face fines for non compliance.
The following steps should be taken to ensure you are ready for the new rules:
- Check that adequate record keeping procedures are in place to identify employees and their ages.
- Ensure your payroll procedures are suitable.
- Advise staff of new rates.
- Ensure staff under 25 are being paid at least the National Minimum Wage rate.
Many employers already pay the living wage and may have already signed up to the living wage foundation. You can find more information at www.livingwage.org.uk.
RTI CONCESSIONS FOR SMALL EMPLOYERS TO END FROM 6 APRIL 2016
The Government announced in the Autumn Statement 2015 that the current two year temporary reporting relaxation will end as planned on 5 April 2016. The relaxation permitted employers who at 5 April 2014 employed no more than 9 employees, to report their PAYE information for the tax month ‘on or before’ the last payday in the tax month instead of ‘on or before’ each payday. This will align the reporting obligations for micro employers with all other employers who are currently required to report payments ‘on or before’ each payday. As a consequence ‘Late reporting reason code E’ will not be valid from 6 April 2016.
END OF YEAR PAYE RETURN REMINDER
Under RTI the end of year form P35 was replaced by the Final Full Payment (FPS) submission. Send your final FPS on or before your employees’ last payday of the tax year (5 April) instead of the old 19 April deadline. Remember to put ‘Yes’ in the ‘Final submission for year’ field in your payroll software.
If you require any further information or would like to discuss any of the above, please contact us.