New tax year, new tax rules: are you up-to-date?
The start of the new tax year brought significant changes to legislation. It is also P11D season: these need to be completed soon.
Increasing minimum wage
From April 2019, the National Minimum Wage (NMW) and the National Living Wage (NLW) rates increased.
From 1 April 2019, the hourly rates of pay are as follows:
|16 and 17||£4.35|
|18 – 20||£6.15|
|21 – 24||£7.70|
|NLW – 25 and over||£8.21|
*Under 19, or 19 and over in the first year of their apprenticeship
In the 2019 Spring Statement, Chancellor Philip Hammond announced that Professor Arindrajit Dube will undertake a review of the latest international evidence on the impact of minimum wages, to inform future NLW policy after 2020.
From 6 April 2019, changes to payslips take effect. All workers have the right to a payslip, no matter whether they are employees with a regular monthly salary or workers on a variable or zero-hour contract. In addition, more information needs to be shown on the payslip, including the number of hours a person has worked; the type of work they have done; and the rate of pay for the different types of work they do.
Don’t forget, P60 forms, which summarise the pay for the year, need to be issued to employees by 31 May 2019.
You should start preparing to file your forms P11D for the tax year 2018/19. These need to be filed by 6 July 2019, and the Class 1A national insurance contributions (NICs) payable need to be paid by 19 July, or 22 July if you pay online. Late filing and payment will incur a penalty and interest, respectively.
Payrolled benefits-in-kind (BIK) do not need to be reported on forms P11D, although Class 1A NICs are reportable via form P11Db and payable as detailed above. If you decide you want to payroll BIK in the future, you need to register online by the 5 April before the start of the new tax year for which you will be payrolling.
Changes to car, van and charging point benefits
Out of all the BIK available, company cars can be one of the more complicated ones to understand. Here we outline some of the increases to benefits that you need to be aware of.
Cars – a BIK charge is based on the list price of the vehicle, multiplied by a percentage linked to the car’s CO2 emissions. These percentages have increased by 3% for 2019/20. The supplement for diesel cars remains at 4%. This applies to all diesel cars (unless the car is registered on or after 1 September 2017 and meets the Euro 6d emissions standard), but the maximum is capped at 37%. There is no change to the current position that the diesel supplement does not apply to hybrid cars.
The fuel benefit charge multiplier for a car is £24,100 in 2019/20 (£23,400 in 2018/19).
Vans – there have been increases in the benefit charge and the fuel benefit charge. For 2019/20, the flat rate for private use of a van is £3,430 (£3,350 in 2018/19). The van fuel benefit is £655 in 2019/20 (£633 in 2018/19). No BIK arises where the ‘restricted private use’ condition is met.
Charging electric cars – employees who charge their own vehicles using an employer-provided charging point do not incur a BIK charge from 6 April 2018, and therefore this does not need reporting on forms P11D. Employees provided with a purely electric company car can be paid 4p per mile for business journeys.
If you require further help in regard to payroll, reporting benefits-in-kind or submitting P11Ds, please contact us.