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Pension rate changes – April 2019

The minimum contributions the employer and your staff pay into your automatic enrolment workplace pension scheme will increase from 6 April 2019.

Employer minimum
contribution
Staff
Contribution
TOTAL
minimum
contribution
New rate:
6 April 2019 onwards
3% 5% 8%
Old rate:
6 April 2018 to 5 April 2019
2% 3% 5%

By law a total minimum amount of contributions must be paid into the scheme. The employer, must make at least the minimum employer contribution towards this amount and your staff member must make up the difference. If the employer decides to cover the total minimum contribution required, your staff won’t need to pay anything.

Further information is available from your pension provider and from The Pensions Regulator:
www.thepensionsregulator.gov.uk/en/employers/increase-of-automatic-enrolment-contributions

2019 / 2020 National Insurance and Income Tax Rates

A full schedule of the National Insurance and income tax rates for the 2019/2020 income tax year, which starts 6 April 2019, is available at:
www.gov.uk/guidance/rates-and-thresholds-for-employers-2019-to-2020

National Minimum Wage & National Living Wage [April 2019]

The National Minimum Wage (NMW) is the minimum pay per hour most workers under the age of 25 are entitled to by law. The government’s National Living Wage (NLW) is the minimum pay per hour most workers aged 25 and over are entitled to by law. To further complicate, there is also a non-statutory Living Wage set by the Living Wage Foundation.

 

Minimum Wage Rates from 1 April 2019

Age 25 and over Age 21 to 24 Age 18 to 20 Aged under 18 [1] Apprentice [2]
New Rate £8.21 £7.70 £6.15 £4.35 £3.90
Old Rate £7.83 £7.38 £5.90 £4.20 £3.70

[1] Aged under 18 and above compulsory school leaving age
[2] Apprentices aged under 19 and, Apprentices aged 19 and over but in the first year of their apprenticeship

 

Further information available at: www.gov.uk/national-minimum-wage-rates and www.gov.uk/national-minimum-wage

Information on the non-statutory Living Wage is available at www.livingwage.org.uk

National Minimum Wage & Sleep-ins

 

Not sure how the National Minimum Wage applies to ‘Sleep-in shifts’?  HM Revenue and Customs has produced an informative ‘webinar’ available on YouTube and below:

 

Updated guidance on Minimum Wage and Working Wage

The Department for Business, Energy & Industrial Strategy has produced new guidance on the National Minimum Wage and the National Living Wage.

 

The updayed guidance, entitled “National Minimum Wage and National Living Wage – Calculating the minimum wage” includes updated information on “Sleep-in” shifts to reflect recent court rulings.

 

You can download the new guidance (.pdf) here.

Pension Regulator prosecutes recruitment agency

The Pensions Regulator has prosecuted a Derby based business, the Directors and senior staff for offences under the Computer Misuse Act. The seven individuals all worked together to opt workers out of the NEST pension scheme, thus depriving workers of the recruitment agency of pension scheme membership.

 
Derby Crown Court, Judge Nirmal Shant QC told the defendants their “co-ordinated effort” had been an “attempt to steal a march” on their competitors and that “This amounted to a deliberate subversion of the automatic enrolment process. It was a deliberate attack on the integrity of the electronic systems of NEST.”

 
Such was the severity of the offences, that the company was fined £200,000 plus nearly £61,000 in costs. In addition, individuals were sentenced to prison sentences (suspended), community service, overnight curfews and costs.

 

Further information avaialable here.

 

 

Free training on sick pay and leave

Would you like to attend a free webinar providing training on sick pay and sick leave?
 
HMRC and ACAS are running a webinar entitled “Managing Sick Leave and Pay“. There will be a broef summary of Statutory Sick Pay entitlement, also how to manage sick leave and the impact it has on employment relations in the workplace.
 
You will be able to ask questions using the on-screen text box.
 
Friday 1 June, 9.00am to 10.00am
Tuesday 12 June, 3.00pm to 4.00pm
 
You can register, or find more information here

Bank Charges

 

If an employer reimburses or pays employees’ bank charges this counts as earnings (and is subject to income tax and National Insurance) unless the bank charges are the employers fault (eg because the employer paid the wages late). If the bank charges were the employers fault, there is no need to report the reimbursement to HMRC.

 

Further information at www.gov.uk/expenses-and-benefits-bank-charges

 

Technical information from HMRC available for income tax and National Insurance

New Student Loan Repayments rates this month

A reminder that one of the many changes this month is a change to the payroll repayment rates for those with Student Loans.

 
 
For borrowers repaying on Plan 1 – if earnings in the week or month exceed the highest amount of earnings shown in the tables you’ll need to deduct the ‘pay period threshold’ from total earnings in the week or month. Do this by:
       deducting £352.50 from weekly earnings for weekly paid employees, or deducting £1,527.50 from monthly earnings for monthly paid employees
       multiply the result (the excess) by 9% (0.09), round down this figure to the nearest whole pound.

 
For borrowers repaying on Plan 2 – if earnings in the week or month exceed the highest amount of earnings shown in the tables you’ll need to deduct the ‘pay period threshold’ from total earnings in the week or month. Do this by:
       deducting £480.76 from weekly earnings for weekly paid employees, or deducting £2,083.33 from monthly earnings for monthly paid employees
       multiply the result (the excess) by 9% (0.09), round down this figure to the nearest whole pound.

 
 

The new rates and further information is on the HMRC website

Changes to Pay In Lieu of Notice

Extract from the HMRC Employer Bulletin, April 2018 [link]

Payments in lieu of notice

Changes to the taxation of non-contractual payments in lieu of notice (PILONs) came into effect from 6 April 2018. All payments in lieu of notice on, or after 6 April 2018 are chargeable to income tax and Class 1 National Insurance Contributions (NICs), whether or not they are contractual payments. Detailed guidance can be found in the Employment Income Manual.

Accordingly, any Pay In Lieu of Notice payments processed by Payroll Check will always be subject to both income tax and National Insurance.