The Pensions Regulator has announced that the number of employers meeting their workplace pension duties has reached one million and that statistics show that approximately 9.3 million people are saving into a pension.
TPR’s Director of Automatic Enrolment, Darren Ryder, said:
‘I am delighted we have reached this important landmark, which shows how far we have come since the start of automatic enrolment.
By successfully meeting their responsibilities, employers have helped reverse the downward trend in workplace saving so that putting earnings into a pension has now become the norm.
The continued support of the pensions industry, including pension and payroll providers and business advisers has been crucial to the success of automatic enrolment. The industry has helped us ensure employers have the tools, information and services they need to comply with the law.
We are now focused on the challenges ahead so that employers continue to understand what they need to do so that staff receive the pensions they are entitled to.’
Minimum pension contributions are set to increase from 6 April 2018 and again in 2019.
||Employer minimum (%)
||Total minimum contribution (%)
||Employer’s staging date to 5 April 2018
||6 April 2018 to 5 April 2019
|6 April 2019 onwards
Contact us if you would like help with auto enrolment.
Internet links: TPR press release TPR report TPR contributions increase
The National Minimum Wage (NMW) and National Living Wage (NLW) are the legal minimum wage rates that must be paid to employees. Employers are liable to be penalised for not complying with the NMW and NLW rules.
There are different levels of NMW and NLW, depending on age and whether the employee is an apprentice. The rates are due to increase from 1 April 2018 as shown in the following table:
||Rate from 1 April 2017 (£)
||Rate from 1 April 2018 (£)
|NLW for workers aged 25 and over
|NMW main rate for workers aged 21-24
|NMW 18-20 rate
|NMW 16-17 rate for workers above school leaving age but under 18
|NMW apprentice rate *
*for apprentices under 19 or 19 or over and in the first year of their apprenticeship
There are no exemptions from paying the NMW on the grounds of the size of the business.
If you would like help with payroll matters please get in touch.
Internet link: ACAS article
A First Tier Tribunal has ruled that Christa Ackroyd who presented BBC news programme Look North and was paid via a personal service company was caught by the IR35 rules resulting in additional tax and national insurance contributions being payable.
The IR35 rules in broad terms mean that those working via a personal service company have to consider whether, if the services were provided by the individual contractor directly to the client, there would be a contract of employment.
The tribunal looked at lots of factors pertinent to Ms Ackroyd’s engagement and considered it significant that the BBC could control what work she did. She was engaged for seven years on effectively a full time basis.
Subject to any appeal and determination of final figures, the tax and NIC that Ms Ackroyd will be liable for amounts to around £420,000 before offset of corporation tax.
The IR35 rules were amended for Public Bodies (including the BBC) from April 2017 and the government has announced that it may make changes to the rules for the private sector as well in the future.
Internet link: ICAEW News
Following the announcement of new income tax rates for Scottish taxpayers for 2018/19, the government is looking at ways of addressing the issue of the tax relief due on Scottish taxpayers’ pension contributions.
Tax relief on pension contributions is a complex matter and depends on the marginal tax rate of the individual concerned and whether or not the contributions are being paid with relief at source or under net pay arrangements. The following link details how relief will be given for 2018/19. If you would like help in this complex area please contact us.
The income tax rates for Scottish taxpayers on income other than savings and dividend income are now expected to be as follows:
|Scottish Bands (£)
||Scottish Rate (%)
|0 – 2,000
|2,001 – 12,150
|12,151 – 31,580
|31,581 – 150,000
Scottish taxpayers are entitled to the same personal allowance as individuals in the rest of the UK which for 2018/19 is £11,850. The allowance is reduced by £1 for every £2 of adjusted net income in excess of £100,000. The bands and allowances are detailed in the P9X.
Internet links: GOV.UK pensions newsletter P9X 2018
The implementation of Tax-Free Childcare, the new government scheme to help working parents with the cost of childcare, is being rolled out to eligible parents in stages.
The scheme first made its debut in April 2017 and although there have been initial systems problems, HMRC’s aim is to have the scheme open to all eligible parents by 14 February 2018. Application is made online through the Childcare Choices site www.childcarechoices.gov.uk and applications can be made for all eligible children at the same time.
Under Tax-Free Childcare, for every £8 the parent pays, the government provides a £2 top-up, to a maximum of £2,000 per child each year – with a higher limit of £4,000 for disabled children. This gives a total childcare pot of £10,000, or £20,000 for disabled children. To be eligible, parents must generally have minimum weekly earnings of at least £120 each. There is also an upper earnings limit of £100,000.
Compensation may be available in certain circumstances where a parent:
- is unable to complete an application for Tax-Free Childcare
- is unable to access their childcare account
- or doesn’t get a decision about whether they are eligible, without explanation, for more than 20 days.
Those employing a nanny should be able to use the childcare account to pay their PAYE tax and National Insurance. Delays in getting this system working may also give grounds for compensation. Application is made online GOV.UK childcare-service-compensation
Internet link: GOV.UK childcare under 9s