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Payroll Update November 2007
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Article bylined to John Black - Payroll & Legislation Advisor, MidlandHR
We now know that the implementation date for the new Additional Paternity Leave and Pay (APL & P), and the extension from 39 weeks to 52 weeks of Statutory Maternity Pay (SMP), Maternity Allowance (MA) and Statutory Adoption Pay (SAP) will not be until April 2010 at the earliest.
P45s
Those with long payroll memories may shake their heads in disbelief but the form P45 is undergoing a major overhaul.
From October 2008 new fields (e.g. date of birth and gender) will be added to the P45 and it will be A4 size! Employers will also have a “plain paper” P45 option for producing just the parts 1a - 3 where the part 1 is filed electronically.
HMRC will not allow bespoke designs (like P60 substitutes) for the time being as they are concerned that the move from the traditional P45 to an A4 layout will be hard enough for employees to get used to. Nor will employers be allowed to produce electronic versions of employee copies of P45s.
Student Loans
April 2008 sees a change to the start and stop notices (SL1 & SL2) to remove reference to the 42 day lead time. In future the requirement will be to operate each form on the next available pay day after the issue date.
Pre-Budget Report (PBR)
The new Chancellor’s first PBR contained more substance from a payroll perspective than most people expected:
- The conclusion of the review of the case for Income Tax and National Insurance Contributions (NICs) alignment is that the two will not be combined, nor will NICs be calculated on a cumulative basis. However, HMRC will issue a consultation document in November 2007 on how best to introduce a system to tax benefits in kind and expenses through the payroll.
- The exemption from NICs on holiday pay paid via a third party is to be removed for all sectors outside the construction industry from 30th October 2007, although it will be maintained for the construction industry for 5 years to give it sufficient time to adjust.
- The fuel benefit charge multiplier will be increased from £14,400 to £16,900 from April 2008.
- From April 2009 a new band of NICs will be introduced for contracted-out contributions. This will involve additional columns on forms P11 and P14 relating to a new threshold called the UAP (Upper Accrual Point).
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