This coming tax year looks to be another busy one with more significant changes coming into force. I have highlighted some of the key changes below:
Tax
The personal allowance increases from £11,000 to £11,500 making the standard tax code 1150L
The 20% basic tax rate band increases from £32,000 to £33,500 per annum.
National Insurance
The lower earnings limit for National Insurance increases from £112 to £113 per week or from £672 to £680 per month.
The upper earnings limit for National Insurance increases from £827 to £866 per week or £3583 to £3750 per month.
Marriage Allowance
The Marriage Allowance is rising from £1,100 to £1,150 from April 6, 2017.
This tax break allows those that are married or in a civil partnership to transfer part of their tax-free personal allowance to their partner.
Employment Allowance
• No change to £3,000 value • HMRC will be monitoring ‘abuse’ throughout 2017/18 though
Student Loans
Students will repay 9% of their salary above £1481 per month if they are on Plan 1, and above £1750 per month if they are on Plan 2.
Statutory Payments
Statutory sick pay increases from £88.45 to £89.35 per week.
Statutory Maternity/Paternity/Adoption pay increases from £139.58 to £140.98 per week.
Apprenticeship Levy
The Apprenticeship Levy is being introduced to help young people get into apprenticeship schemes. The money will go towards funding the education within apprenticeships in the UK. The new tax will only apply to companies that have a pay bill over 3 million per annum.
The Apprenticeship Levy starts for businesses whose monthly pay bill is £250,000 (£3,000,000 annually).
The tax will be based on 0.5% of your pay bill. However, there will be an allowance of £15,000 for all employers. So your tax will be: 0.5% of your pay bill less £15,000.
Some employers will be liable to pay the levy in some periods and not in others. The calculation will take this into consideration and make sure that you are paying the correct amount of tax. This would apply to a seasonal business that would have a higher pay bill at certain times of the year
Gender Pay Gap Reporting
New gender pay gap regulations which are due to come into force on 6 April 2017 mean that private and voluntary sector organisations employing 250 or more people as of 5 April 2017 must publish the details of their gender pay gap by 4 April 2018.
Employers will need to use data from 2016/17 for the first reports which will require median and mean information relating to employee pay and bonus pay to be published; together with details of the number of men and women in each quartile of the organisation’s pay distribution.
National Minimum and Living Wage
The national living wage for employees aged 25 or over will rise from £7.20 an hour to £7.50 an hour from April 2017.
The National Minimum Wage rates increases: 21-24 year olds from £6.95 to £7.05; 18-20 year olds from £5.55 to £5.60; 16-17 year olds from £4.00 to £4.05; apprentice rate from £3.40 to £3.50.
Vat
The VAT registration threshold increases on 1st April 2017 from £83,000 to £85,000.