Payroll key updates for 2023
Tax codes
The personal allowance for 2023/24 remains at £12,570 with a tax code of 1257L.
The responsibility is on the employee to ensure the tax code applied is correct – if an employee is not sure, they should contact HMRC on 0300 200 3300.
New employees
HMRC require either form P45 or Starter Checklist when processing a new employee as this determines the tax code to operate. Therefore, to process any new employee, payroll requires these forms.
Right to work check
The notes below are for your information and the link will advise you accordingly. https://www.gov.uk/legal-right-work-uk
As an employer, it is your responsibility to ensure your employees have the legal right to work in the UK. An employer who employs an illegal worker and has not undertaken a prescribed right to work check, will be liable for a civil penalty of up to £20,000 per illegal worker. It is also a criminal offence to knowingly employ an illegal worker, or to employ a worker despite having reasonable cause to believe they may be illegal. This offence could lead to a custodial sentence and an unlimited fine.
COMPANY CAR REQUIREMENT
Form P46(Car) must be completed and submitted online or by post to HMRC when an employee/director is provided with a company car, or the company car is withdrawn from the employee/director.
Student loan thresholds
Plan Type 1 – £22,015 (9% over threshold)
Plan Type 2 –£27,295 (9% over threshold)
Plan Type 4 –£27,660 (9% over threshold)
Postgraduate – £21,000 (6% over threshold)
Statutory maternity pay (SMP) – 39 paid weeks
Statutory paternity pay (SPP) – 2 consecutive paid weeks
This will increase from £156.66 to £172.48 subject to qualifying earnings.
Eligible smaller companies will still be entitled to claw back 100% plus 3% compensation against their monthly PAYE/NI liabilities. Larger companies remain at 92%.
Statutory sick pay (SSP)
This will increase from £99.35 to £109.40 subject to eligibility.
Directors’ national insurance threshold had increased
This remains at £758 per month, giving an annual total of £9,096.
Employment allowance
The employment allowance remains at £5,000 per year for eligible employers.
If the payroll has exceeded employers’ national insurance of £100,000 in the previous tax year, employment allowance is not applicable.
The following link provides further information relating to the employment allowance and eligibility – https://www.gov.uk/claim-employment-allowance
Employee’s earnings
Any employee who earns more than £100,000 through the payroll will need to complete a tax return.
National minimim wage
The hourly rates from 1 April 2023 have increased as follows:
| 23 and above | £10.42 |
| 21-22 inclusive | £10.18 |
| 18-20 inclusive | £7.49 |
| Under 18 | £5.28 |
| Apprentice under 19 | £5.28 |
| Apprentices aged 19 and over, but in the first year of their apprenticeship | £5.28 |
The apprenticeship rate only applies to apprentices aged:
- Under 19
- 19 or over who are in the first year of their apprenticeship.
Apprentices aged 19 or over in their second year of apprenticeship must receive the national minimum wage or national living wage rate their age entitles them to.
Auto enrolment
There is no change to the auto enrolment pension contribution thresholds.
| Date effective | Employer minimum contribution | Staff contribution | Total minimum contribution |
| 6 April 2023 | 3% | 5% | 8% |
| 6 April 2022 | 3% | 5% | 8% |
If you have any questions regarding the information above please do not hesitate to contact your payroll manager.
(E) enquiries@advaloremgroup.uk (T) 01908 219100 (W) advaloremgroup.uk
