New rates apply from 1 April 2022
SSP Rebate Scheme
The SSP rebate scheme which allows employers to reclaim up to 2 weeks SSP for Covid related absences was introduced in May 2020 and closed in September 2021. This re-opened on 21 December 2021 for any employers that had a PAYE scheme in place on 30 November 2021 with fewer than 250 employees and will cease on 17 March 2022. Claims and amendments must be made by 24 March 2022 via your online dashboard. The entitlement to SSP from day 1 of Covid related absences ends on 24 March 2022.
Apprenticeship Levy and connected companies
If you have connected companies that together the pay bill is £3 million per year, then all companies are liable to pay the apprenticeship levy. You only have one apprenticeship allowance of £15,000, but you can split the levy over the different entities at the start of each tax year. The levy is calculated on each payroll individually and dependant on how the levy allowance has been distributed will affect how much each connected company will pay.
Levy paying employers are now permitted to transfer up to 25% of their annual fund to other and smaller employers within their supply chain, as well as apprenticeship training agencies. This can be done once both employers are registered on the apprenticeship service. https://www.gov.uk/guidance/manage-apprenticeship-funds
Since April 2020 employers need to claim the £4k employment every year in order to receive the relief and it will no longer be carried forward automatically. This must be claimed from HMRC through an EPS (Employer Payment Summary).
The allowance is limited to businesses and charities as well as where there are connected companies, with a Class 1 national insurance liability in the previous tax year of £100k or less.
In addition, the employment allowance is operated as de Minimis State aid. In these circumstances, employers must have space to accommodate the full £4k employment allowance within their relevant de minims limit. Full details of the criteria can be found on the attached link: –
Health & Social Care Levy
From 6 April 2022 there will be a temporary rise in the national insurance contribution rates payable on all earnings above the primary and secondary thresholds for employees and employers to support NHS funding. An increase of 1.25% will apply to Class 1, 1A, 1B and Class 4 for those who are self-employed. A message should be displayed on payslips advising of this uplift.
From 6 April 2023 the national insurance rates will revert to 21/22 rates and a new Health & Social Care Levy will be introduced as a separate pay field to calculate the additional tax of 1.25%. In addition, those above state pensionable age who currently pay no NI will be required to pay the levy. Current NI exemptions for employers will remain in place for under 21’s, apprentices under age 25, veterans in the first 12 months of civil employment and freeport workers (from April 2022).
The levy will be reported via the payroll through real time information and will be displayed as a separate item on the payslip.
The introduction of HMRC approved salary sacrifice arrangements such as pension contributions can reduce NIC liabilities for employees and employers. If you require advice in this area, please get in touch.
National Insurance Exemptions
Veterans National Insurance Holiday – came into effect from 6 April 2021 and provides employer national insurance relief on the wages of veterans in their first 12 months of civilian employment up to the upper threshold. A new NI Letter ‘V’ is being introduced from 6 April 22/23 to facilitate this.
Freeports National Insurance Holiday – comes into effect from 6 April 22 and will provisionally end in April 2026. This provides employer national insurance relief on the wages of new freeport employees up £25,000 per annum. At the start of employment, the employer must expect that at least 60% of the employees working time will be spent at a single freeport site and new NI categories have been confirmed to facilitate this.
Apprentice National Insurance Relief – available to employers if an apprentice is under 25, on an approved UK government apprenticeship and earns less than £967 per week. If using this relief your payroll contact must be advised once the apprenticeship ends to avoid any underpayments.
Working From Tax Relief
The temporary home working rule will cease on 6 April 2022 and employees who work at home due to covid may no longer be able to claim the £6 per week tax relief.
If employees have changed their working arrangements to facilitate home working, they may no longer be eligible to claim the allowance from 2022/23.
There has been a number of employment law cases over recent years in relation to holiday pay so important to get this right to avoid backdated claims. For those staff on fixed hours and pay then a week’s holiday pay is simply the equivalent of a week’s wages.
For those staff with variable hours, then since 6 April 2020 the pay reference period for calculating holiday pay should be based on the previous 52 weeks that were paid. If your employees earn commission, bonus, overtime or any other additional payments they receive on a regular basis then you need to consider if they should be included in this calculation. Employment Law advice may be required if you are unsure of your contractual obligations.
Pension Re-enrolment & Declaration of Compliance
Automatic re-enrolment occurs every 3 years and is similar to the duties carried out at your pension staging date. Employees must be assessed and re-enrolled into the company pension scheme if applicable. In addition, employers have an obligation to complete a Declaration of Compliance, this needs to be submitted no later than 5 months after your re-enrolment date. You will be fined if you fail to complete this accurately and on time.
You can find further information and complete the declaration via the attached link.
Payrolling of Benefits
If you are not already payrolling benefits and intend to do this from 2022/23 you must first register with HMRC before the start of the new tax year.
If you would like any further information, please get in touch.