HMRC Payroll Requirements

HMRC have a Real Time Information (RTI) requirement in place.  This means that businesses must submit employee PAYE, NIC and Student Loans information to HMRC at the time of issuing actual employee payments (and not at the tax year end, as previously required).  Failure to do so may result in monetary fines.

Employers’ National Insurance Contribution Allowance

Employers and charities can claim back £3,000 per annum on Class 1 employee NIC payments.

Abolition of Class 1 Secondary National Insurance Contributions for Employees Under 21 Years of Age

Employers do not pay Class 1 Secondary NIC for employees under 21 years of age, where payments are below the upper secondary threshold.

This abolition however does not apply to Class 1A or Class 1B, employees receiving payment above the upper secondary threshold and employees 21 years of age or over.

The Married Couple Allowance

If an employee earns less than £11,000 per annum yet their marriage or civil partner earns more than £11,000, then the employee can transfer £1,100 of their annual personal allowance to their partner’s pay or income.  The couple must apply for this allowance by themselves via the HMRC website.  HMRC then updates the employee’s tax code (the new tax code will end with an ’N’) or alternatively applies it to their self assessment tax return (if they are self employed).

Shared Paternal Leave

Employees may request Shared Parental Leave and Statutory Shared Parental Pay if they have a baby or have adopted a baby.   This is where some or all of the paternal leave can be given to the female parent, provided that the female parent has not claimed her full entitlement to maternity leave or maternity pay.  She may then receive enough of the paternal entitlement to make up for her unclaimed maternity leave or maternity pay entitlement.

As an employer you must keep specific records for HMRC regarding any claims on this scheme.  This includes the proof that the employee has provided you with to show that they are eligible for Statutory Shared Parental Pay, the date that the payments began, all of the consequent payment dates, the payments that you’ve reclaimed and information on any weeks where you didn’t pay, along with the reason for non-payment.  These records must be retained for at least 3 years from the end of the tax year in which the payments occurred.

If you would like further information or guidance, you are welcome to contact us.

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