Please find below a list of items that you may need to check before starting to run your payroll in the new tax year, 2016/17.

Employment allowance

• From 6^th April 2016, the employment allowance will increase to £3,000, however companies where there is only a sole director on the payroll will no longer be able to claim this.

Personal Allowance/Tax Codes

• The personal allowance for 2016/17 is £11,000. This means the standard tax code will be 1100L.

Holidays

• Statutory holidays are calculated at 5.6 weeks per annum. This equates to 28 days for a person working 5 days per week
• 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.

Director/shareholder salaries

• We will be leaving the director/shareholder basic salary as £725 per month for the 2016/17 tax year as it is still above the national insurance limit.

Paying HMRC

• 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 introduction of the National Living wage is 1^st April 2016, this means any employee, who is aged 25 or over will have to be paid a new minimum pay of £7.20 per hour.
• A reminder of the current minimum wage rates, since 1^st October 2015:

25 and over*	£7.20 p/h
21 and over	£6.70 p/h
18 to 20	£5.30 p/h
Under 18	£3.87 p/h
Apprentice**	£3.30 p/h

*Starting from 1^st April 2016

**This rate applies to apprentices aged 16-18 and those aged 19 or over in their first year of an apprenticeship. All other apprentices are entitled to the minimum wage for their age group

 

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 2016/17’
• 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 and SAP