Payroll Key Information 2020/21 - Ad Valorem

TAX CODES
The personal allowance for 2020/21 has remained the same being £12,500 with a tax code of 1250L.

NEW EMPLOYEES
HMRC require either form P45 or Starter Checklist when processing a new employee as this determines the tax code to operate.  Therefore, in order to process/pay any new employee, we will need either one of 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.

STUDENT LOAN THRESHOLDS
Plan Type 1 – £19,390 (9% over threshold)
Plan Type 2 – £26,575 (9% over threshold)
Postgraduate – £21,000 (6% over threshold)

STATUTORY MATERNITY PAY (SMP) – 39 PAID WEEKS
STATUTORY PATERNITY PAY (SPP) – 2 CONSECUTIVE PAID WEEKS ONLY
This will increase from £148.68 to £151.20 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 £94.25 to £95.85 subject to qualifying earnings.

DIRECTOR’S NATIONAL INSURANCE
For directors who pays themselves a monthly salary of £719, this has now increased to £732, with the increase in the secondary NIC threshold. Please note for the time being this increase will not apply to furloughed directors.

EMPLOYMENT ALLOWANCE
The employment allowance has been increased from April 2020 to £4,000 for eligible employers.
The following link provides further information relating to the employment allowance and your eligibilty – https://www.gov.uk/government/publications/employment-allowance-increases-for-national-insurance-from-april-2020/employment-allowance-increases-for-national-insurance-from-april-2020

NATIONAL MINIMUM WAGE
The hourly rates from 1 April 2020 will increase as follows:

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