Please find below a list of items that you may need to check before starting to run your payroll in the new tax year, 2017/18.
- On 6th April 2016, the employment allowance increased to £3,000, this will remain the same for 2017/18.
- If you claimed the allowance in the tax year 2016/17, you do not need to do anything further, your claim for the 2017/18 tax year will be automatic.
- If you have not previously claimed the allowance but are now entitled to it you will need to make the claim via an EPS (employer payment summary).
Personal Allowance/Tax Codes
- The personal allowance for 2017/18 is £11,500. This means the standard tax code will be 1150L.
- You should increase all employees with a tax code ending in ‘L’ by 50. For example, if an employee’s tax code is 1070L in the tax year 2016/17, you will increase it by 50 to 1120L for 2017/18. You should also remove any w1/m1 status tax codes.
- Any other tax codes should only be changed if you receive official notification to do so.
- Statutory holidays are calculated at 5.6 weeks per annum. This equates to 28 days for a person working 5 days per week, including bank holidays.
- Holidays for casual workers should be calculated at 12.07% of hours worked, for example, if an employee works 30 hours in one week then they have accrued 3.62 hours’ holiday
- All employees are entitled to holiday pay, including, part time and casual staff.
- We will be leaving the director/shareholder basic salary as £725 per month for the 2017/18 tax year as it is still above the national insurance limit.
- HMRC would like all payments to be made electronically, the bank details are below:
Sort code: 08-32-10
A/c number: 12001039
Reference: Your accounts office reference
National Minimum Wage/Living Wage
- The National Living Wage and National Minimum Wage will increase on 1st April 2017 to the following rates:
Small employer’s relief
- If you do your own payroll and use Sage payroll software, please ensure you have marked on that you are a small employer if this is the case. You can do this by going into company>settings>tick box ‘Eligible for Small employers relief for 2017/18’
- You are classed as a small employer for this purpose if your total National Insurance bill for the previous tax year was less than £45,000
- Ticking this box, lets you claim back additional compensation on SMP, SPP, SAP and ShPP
- From 6th April 2017, Employers with a pay bill of more than £3million must pay an additional Levy through their PAYE, this will be 0.5% of your pay bill with an annual allowance of £15,000
- If you feel this is something that will affect your business going forward, please feel free to contact us.