Payroll isn’t an exciting topic for most people, however not being informed can lead to headaches and financial penalties. My Knowledge Nugget blogs are designed to give you a quick taste of what you need to know without leaving you bogged down in jargon and HMRC speak!
This week’s blog is about changes in the forthcoming financial year, and the new National Living Wage
How to Make 2016 Payroll Start Smoothly!
We’ve only just returned from Christmas, but already there are many changes on the horizon small businesses should be aware of. Preparing for these now and having all the knowledge you need saves errors and problems later on.
From the 1st of April 2016, there is an increase in the minimum wage for employees aged 25 and over. Previously the minimum wage of £6.70 would have been legal, but at the start of the new financial year these employees are entitled to the National Living Wage of £7.20 per hour.
Additionally, from 6th April 2016 the basic tax code changes from 1060L to 1100L. This means that employees will be able to earn £11,000.00 per year before paying income tax, an increase on the 2015-16 tax-free allowance of £10,600.00
There is a government commitment to increase this each year, so that by 2020 it will be more than £9.00 per hour.
There are also changes to National Insurance Thresholds and Employers Allowance.
Whilst from a small business perspective this seems like quite a lot to deal with, your payroll provider should take care of all of this for you easily and painlessly.
If you have any questions about the forthcoming changes, or help with payroll, auto enrolment or employment contracts, please email me at [email protected] or call 01384 92 90 20.
Further information about The National Living Wage can be found on the Government website:
Information on Income Tax and National Insurance Thresholds can be found on the Government website:
www.gov.uk/tax-and-tax-credit-rates-and-thresholds-for-2016-17
