axis payroll User Guide Supplement March 2019

8. The New Year

8.1 Employment Allowance

The Employment Allowance remains at £3000 per year from 6th April 2019.

If you were eligible for and claimed Employment Allowance for the tax year ending 5th April 2019 no action is required to claim from 6th April 2019.

If you have become newly eligible to claim the 'Employment Allowance' you will need to go to 'Amend Employer Details' for the payroll data set through which you wish to claim the allowance and tick the 'Employment Allowance' option. Note: if you are operating more than one payroll data set, you should only claim through one data set. Calculate Monthly Remittance will then include your claim for the allowance. You will need to create and submit an RTI Employer Payment Summary in the first month of the tax year to advise HMRC that you are claiming the allowance setting the 'Employment Allowance claim' option to 'Yes'.

 
 

8.2 Tax Code Changes

The standard personal allowance increases from £11,850 to £12,500. This applies to England and Northern Ireland, Scotland and Wales.

The code for emergency use with effect from 6th April 2019 changes accordingly to 1250L

There is a general uplift of L suffix tax codes by 65 and a corresponding uplift to M and N suffix tax codes by 71 and 59 respectively. The increment is applied automatically to all existing employees by the 'Year End Processing' routine.

Where you receive a code notification for an individual employee to be operated from 6th April 2019 (on Form P9(T) or via your online HMRC account), the specified code must be entered after the year end has been run.

Refer to form P9X(2019) for further details.
 

8.3 Class 1 National Insurance Contributions

Calculate Net Pay will check the tax year / pay date and automatically apply the following Class 1 earnings thresholds effective from 6th April 2019:

 

  Weekly Monthly Yearly
Lower Earnings Limit £118.00 £512.00 £6,136.00
Primary Threshold £166.00 £719.00 £8,632.00
Secondary Threshold £166.00 £719.00 £8,632.00
Upper Secondary Threshold (Under 21) (UST) £962.00 £4,167.00 £50,000.00
Apprentice Upper Secondary Threshold (Apprentice Under 25) (AUST) £962.00 £4,167.00 £50,000.00
Upper Earnings Limit   £962.00 £4,167.00 £50,000.00

 

The Employee and Employer Class 1 NI contribution rates for NIC categories A, B, C, H, J, M and Z remain unchanged.

Calculate Gross Pay will continue to check employees in the 'under 21' and 'under 25' N.I. categories and amend their category to a standard category if that employee has achieved the age of 21 or 25 by the pay date of the period being run.

Note: The 'Print Payroll Parameters' function, accessed from the 'Supervisor Functions' menu, may be used to produce a report of the rates applicable to each NI category and band of earnings.

 
 

8.4 Statutory Sick Pay

The weekly rate increases to £94.25.

The appropriate daily rate is determined by the number of qualifying days.

Eg. The daily rate for an employee with five qualifying days is £18.85.

 
 

8.5 Statutory Maternity / Paternity / Adoption Pay

Statutory Maternity Pay (SMP) is paid at 90% of the employee's average weekly earnings for the first six weeks. The standard weekly rate for the remaining weeks is £148.68 or 90% of the employee's average weekly earnings, whichever is lower.

Statutory Adoption Pay (SAP) is paid at 90% of the employee's average weekly earnings for the first six weeks. The standard weekly rate for the remaining weeks is £148.68 or 90% of the employee's average weekly earnings, whichever is lower.

Statutory Paternity Pay (SPP) is payable for 1 or 2 weeks at the standard weekly rate of £148.68 or 90% of the employee's average weekly earnings, whichever is lower.

Statutory Shared Parental Pay (ShPP) is payable at the standard weekly rate of £148.68 or 90% of the employee's average weekly earnings, whichever is lower. Information for employers is available at http://www.gov.uk/shared-parental-leave-and-pay-employer-guide/entitlement

The amount of SMP/SPP/ShPP/SAP that may be recovered for employers who do not qualify for Small Employers Relief (SER) is 92% of the SMP/SPP/ShPP/SAP paid to their employees.

Employers who do qualify for Small Employers Relief (SER) can recover 100% of the SMP/SPP/ShPP/SAP paid to their employees plus NIC compensation of 3%.

A ‘small employer’ is one who paid (or was liable to pay) total gross class 1 NICs of £45,000 or less in the individuals qualifying tax year. For further information pkease refer to https://www.gov.uk/recover-statutory-payments
 

8.6 Student Loan and Postgraduate Loan Recovery

The annual threshold for the collection of existing Plan 1 Student Loans increases from £18,330 to £18,935.

The annual threshold for the collection of Plan 2 Student Loans increases from  £25,000 to £25,725.

The deduction percentage rate for student loans remains unchanged at 9% of earnings above the threshold.

Support has been added for Postgraduate loan recovery. The annual employee earnings threshold for Postgraduate loans for 2019/2020 is £21,000 and deductions are made at 6%.

 
 

8.7 PAYE Income Tax

Calculate Net Pay will automatically apply the appropriate annual tax bands for the tax year / pay date as follows:

 

   

2018 - 2019

2019 - 2020
England & Northern Ireland Basic Rate 20% £1 to £34,500 £1 to £37,500
England & Northern Ireland Higher Rate 40% £34,501 to £150,000 £37,501 to £150,000
England & Northern Ireland Additional Rate  45% £150,001 and above £150,001 and above
Scottish Starter Rate 19% £1 to £2,000 £1 to £2,049
Scottish Basic Rate 20% £2,001 to £12,150 £2,050 to £12,444
Scottish Intermediate Rate 21% £12,151 to £31,580 £12,445 to £30,930
Scottish Higher Rate 41% £31,581 to £150,000 £30,931 to £150,000
Scottish Additional Rate 46% £150,001 and above £150,001 and above
Welsh Basic Rate 20% N/A £1 to £37,500
Welsh Higher Rate 40% N/A £37,501 to £150,000
Welsh Additional Rate 45% N/A £150,001 and above

 

The new bands for 2019-20 are effective from the first pay day on or after 6th April 2019.

NB. A report of all the current statutory deduction and payment rates can be produced using the ‘Print Payroll Parameters’ function which is located on the Supervisor Functions menu.

 
 

8.8 Pension Scheme Qualifying Earnings

As the qualifying earnings are reviewed annually, please contact your pension scheme provider to see if there are any changes.

If so, this can be changed in Amend Pension Scheme Details.

By law, the total minimum amount of contributions which must be paid into workplace pension schemes is increasing on 6th April 2019. Employers must make a minimum contribution towards this amount and the staff member must make up the difference. If you decide to cover the total minimum contribution required, your staff won’t need to pay anything.

This table shows the minimum contributions you must pay and the date when they must increase:

Date Employer minimum contribution Staff Contribution Total minimum contribution
Until 5th April 2018 1% 1% 2%
6th April 2018 to 5th April 2019 2% 3% 5%
6th April 2019 onwards 3% 5% 8%


Please see https://www.axisfirst.co.uk/documentation/WorkPlace-Pensions/articles/14043 for detailed information on managing workplace pensions in axis payroll.The staff contribution rate may vary depending on the type of tax relief applied by your scheme. If you are unsure check your scheme documents.
 

8.9 Disguised Remuneration Loan Charge

If you are required to declare a Disguised Remuneration Loan Charge in respect of outstanding employee or directors loan balances at 5th April 2019, you will need to download and install updated software prior to running your final pay period for the affected employee(s).

The updated software will alllow you to create a new pay component for processing the balance and flag the component as a 'Disguised Remuneration'.  

 

For further information regarding Disguised Remuneration Loan Charge, please refer to Employer Bulletin: February 2019