Did you know that from this tax year you can now get up to £3,000 off your National Insurance bill if you’re an employer? This has increased from the £2,000 allowance which could be claimed in both 2014/15 and 2015/16.
Not sure if you are eligible?
You can claim Employment Allowance if you’re a business or charity paying employers’ Class 1 National Insurance. You can also claim if you employ a care or support worker. However, you can only claim Employment Allowance for one PAYE scheme so if you’re part of a group, only one company or charity in the group can claim the allowance.
Directors, take note!
If you are the only employee in your company who has employer National Insurance deducted then the rules have changed this year and you are no longer eligible to claim the allowance. If you have claimed the allowance previously you need to make sure that you update your payroll records you reflect the fact that the business is no longer eligible and notify HMRC accordingly.
One of the most notable announcements in this years’ Summer Budget was the introduction of a compulsory National Living Wage.
The new National Living Wage of £7.20 per hour will take effect from April 2016, being a top-up of 50p per hour to the National Minimum Wage (£6.70) for those employees aged 25 and over. The National Living Wage is set to increase each year, eventually hitting £9.00 per hour by 2020.
You may want to consider the cost implications of this for your business and importantly you may need to be aware that employees cannot make a ‘salary-sacrifice’ which takes them below the hourly minimum (£7.20) and you therefore may need to reconsider any existing or future sacrifice arrangements.
While many have been calling for the introduction of a ‘Living Wage’ for some time, it’s important to recognise the difference between the Chancellor’s’ newly announced National Living Wage and the Living Wage that is voluntarily paid by some employers.
The ‘other’ Living Wage that is talked about is calculated according to the basic costs of living in the UK by the Living Wage Foundation. There are two rates, a UK rate which is £7.85 and a London rate which is currently £9.15. Employers can choose to pay the Living Wage on a voluntary basis.