Are You Prepared For The Financial Year?

Are you prepared for the new financial year?

With the end of the financial year drawing to a close, this is a busy time for employers as they draw a line under one year and prepare for the next. After this year’s announcement for the Budget 2015, there is news of changes to salary arrangements, which you’ll need to follow when administering your payroll and any salary schemes that are currently in place within your business. To help get your new financial year off to a great start, Premier has summarised what you will need to know:

Personal Allowance

First to note after the Budget 2015 announcement is the increase in personal allowance from £10,000 to £10,600 coming in to effect on 6th April. In the future, we should also expect to see further increases to £10,800 in 2016/17 and £11,000 by 2017/18. Every little bit helps and we’re pleased to hear the prospect of further increases in the future!

The starting point for 40% tax will also rise from £41,865 to £42,385 on 6th April. With a future rise in 2016/17 to £42,700 and again in 2017/18 to £43,300.

National Minimum Wage

There has been quite a debate recently in regards to the National Minimum Wage and the cost of living, so for your staff who are aged 21 years and over, the National Minimum Wage is to rise to £6.70 per hour in October. If you also offer apprenticeships in your business, there will be an increase in the National Minimum Wage to £3.30 per hour (20% up on what it was).

It is important that your payroll is updated to reflect this and to ensure that new figures are taken into consideration when setting up salary sacrifices. For some employees this may reduce the amount they may receive in Childcare Vouchers so it is a good idea to sit down with those members of your staff who this will affect.

Earning Assessments

If you are a business who have a childcare voucher scheme, in order for this scheme to remain exempt from tax and National Insurance, at the start of each tax year you must review your employees’ earnings assessments.

Tax-Free Childcare

The Government have set in place a Tax-Free Childcare scheme available from Autumn 2015 that will be available to nearly 2 million households in the UK. This new scheme is set to help with the cost of childcare, enabling more parents to go to work and to provide greater security for their families.

You can read more about the scheme here.