With Christmas having very stealthily snuck up on us, I thought it would be a good time to reflect upon the year in the payroll industry whilst also looking at what we can look forward to in the New Year. With December being a hectic month in regards to getting payrolls processed, it is (at least from a Bureau’s point of view) easier in that you know what you need to do and when it needs doing, and with the benefit of no companies staging for AE this month…so time off to eat copious amounts of food once you have finished.
2016 saw a relatively quiet year in regards to payroll. Auto Enrolment has been in full flow for a few years now, as has the Employment Allowance and RTI. Statutory payment rates did not change this year so the only new items to come along were payrolling of benefits and auto re-enrolling, both of which only really affected a small number of companies. Both however I can see coming into play a lot more looking forward to 2017.
At the moment, 2017 looks like being a quiet year in regards to payroll too. Payrolling of benefits along with auto re-enrolment are going to come into force more, however with most small and medium payrolls not enrolling until 2015 or beyond, this will be larger firms that will have to deal with this for now. Salary sacrifice on benefits as per the Autumn Statement have been amended to limit what is eligible. As usual the personal tax allowance is increasing — this time to £11,500 (or 50 points on what you previously had). The NI thresholds have been brought into line for the 1st time so that the employee and employer threshold are the same.
The biggest development to hit payroll next year (in April) looks to be the new Apprenticeship Levy. This will only affect companies who have a ‘pay bill’ of £3 million per year — or £250,000 per month. There will be a levy allowance — like the employment allowance to an extent where companies are eligible to claim £15,000 against the amount they owe. The main difference being however that unlike the Employment Allowance which can be used up in one month if their employer’s NI is high enough, the Apprenticeship Levy Allowance can only be used £1,250 per month and thus cannot be used in a single month. You can however carry any unused amounts across to the next month — this will help companies who have a ‘pay bill’ of less than £3 million but who have spikes in their pay due to seasonal trends which will take them over the £250,000 threshold.
Currently, we do not know the full details of the Levy, as they are yet to be released by HMRC. This does not make our lives easy as it is always better to know as much as we can, with as much information as we can. Yet being a seasoned payroll professional, I am now used to this and we carry on regardless to ensure we get the job done.
Finally, I would like to wish anyone reading this blog a very Merry Christmas and a Happy New Year. I hope you all get to relax over this festive period. Here’s to the end of 2016 and embracing 2017 with its challenges and excitements, after all, without both, life would be all the more dull.