Navigating Payroll Changes for the Tax Year 2024/2025

Welcome to the new tax year! As we embark on this fresh fiscal journey, it's crucial to stay abreast of the latest payroll changes to ensure smooth operations. Here's a comprehensive guide to help you navigate through the updates and key dates for the tax year 2024/2025.

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Tax Codes & National Insurance

In the new tax year, there won't be any uplift for tax code free pay allowances. The Emergency tax code remains 1257L W1/M1. Additionally, there's a reduction in employee National Insurance at a rate of 8%, while employer's National Insurance remains unchanged at 13.8%.

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National Minimum & Living Wage

The National Minimum and Living Wage rates remain unchanged.

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Statutory Payments

Effective from April 6th, 2024, there's an increase in Statutory Sick Pay to £116.75 per week. Similarly, Statutory Maternity, Paternity, Adoption, Shared Parental, and Parental Bereavement Pay have been raised to £184.03 per week from April 7th, 2024. Eligible employees can avail these payments for the specified durations.

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Employment Allowance

No alterations have been made to the Employment Allowance for the 2024/25 Tax Year. Employers can still reduce their annual National Insurance liability by up to £5,000, provided their Employers Class 1 National Insurance liabilities were less than £100,000 in the previous tax year. Remember to inform HMRC whether you're claiming the Employment Allowance for 2024/2025.

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Automatic Enrolment

Minimum Pension Percentages remain at 8%, with annual thresholds unchanged from the previous tax year. Ensure compliance with Automatic Enrolment earnings triggers and contribution bands.

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Directors National Insurance

At the outset of the new tax year, inform HMRC of any changes to Director statuses within your payroll. This includes newly appointed Directors, preferred National Insurance calculation methods, and any Directors who are no longer in office. Changes must be communicated before processing the April payroll.

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‍Payrolling Benefits

If considering payrolling benefits for the first time, register with HMRC before the tax year commences. Notify HMRC of your decision and provide relevant information for payroll entry.

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Key Dates

Stay on top of deadlines with these key dates:

• By April 19th, 2024: Complete year-end procedures and issue reports.
• By May 31st, 2024: Issue P60s to employees.
• By July 5th, 2024: Submit P11Ds to HMRC.
• By July 22nd, 2024: Electronically pay Class 1A NICs (P11D).

As we embark on this new tax year, ensure compliance and efficiency in managing payroll changes and deadlines. Stay informed and organised to navigate smoothly through the fiscal landscape of 2024/2025.

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