What’s Changing?
The following documents changes made in the system required to allow legislative compliance from April 2017.Release Date: Released 2nd March 2017
Reason for the Change
Her Majesty’s Revenue and Customs (HMRC) are implementing changes to legislation agreed by the UK Government, for the tax year beginning 6th April 2017.
Please visit www.gov.uk or use the links in this document for more information.
Customers Affected
All customers with the Payroll or Pension module with pay dates on or after 6th April 2017.
Release Notes
PAYE - Tax and National Insurance:
Rates and Thresholds
- Payroll > Admin > Payroll Statutory Information Screen:
Fig.1 – Payroll Statutory information
Fig.2 – NI Rates for 2017
Fig.3 – PAYE Tax Thresholds & Rates for 2017
Student Loans
From 6th April 2017 the two Student Loan Type Thresholds Will be:
o Plan 1 with an earnings threshold of £17,775 per year
o Plan 2 with an earnings threshold of £21,000 per year.
National Living Wage (NLW)
From the 1st April 2017, the National Living Wage will be £7.50 an hour. This only applies for workers that are aged 25 and older. For workers under the age of 25, the National Minimum Wage will apply as follows:
o Apprentices - £3.50
o Under 18 - £4.05
o 18 to 20 year olds - £5.60
o 21 to 24 year olds - £7.05
More information on the living wage and latest rates for NMW can be found at: https://www.gov.uk/national-minimum-wage-rates
Statutory Payments – Sickness (SSP), Maternity (SMP), Paternity (SPP), Adoption (SAP), Shared Parental (ShPP)
There are no changes for 2017/18 in this area, both in terms of the entitlements or statutory rates of pay.
From 6th April 2017 the two Student Loan Type Thresholds Will be:
o Plan 1 with an earnings threshold of £17,775 per year
o Plan 2 with an earnings threshold of £21,000 per year.
National Living Wage (NLW)
From the 1st April 2017, the National Living Wage will be £7.50 an hour. This only applies for workers that are aged 25 and older. For workers under the age of 25, the National Minimum Wage will apply as follows:
o Apprentices - £3.50
o Under 18 - £4.05
o 18 to 20 year olds - £5.60
o 21 to 24 year olds - £7.05
More information on the living wage and latest rates for NMW can be found at: https://www.gov.uk/national-minimum-wage-rates
Statutory Payments – Sickness (SSP), Maternity (SMP), Paternity (SPP), Adoption (SAP), Shared Parental (ShPP)
There are no changes for 2017/18 in this area, both in terms of the entitlements or statutory rates of pay.
- Rates can be viewed for 2017/18 in Payroll > Administration > Payroll Statutory Information.
Fig.4 – Payroll Statutory Information
Real Time Information (RTI)
Changes have been made to the Employer Payment Submission (EPS) to account for all legislative and system changes related to the Apprenticeship Levy.
Pensions
The Department of Work and Pensions (DWP) has announced the proposed earnings thresholds for the 2017 - 2018 tax year. These values have been published in an Order (a form of secondary legislation) by the DWP and laid before Parliament and so are subject to Parliamentary approval.
Fourth does not expect the rates and thresholds to change from the proposed rates as shown in Fig.5 below, as these fall in line with National Insurance rates (as in previous tax years).
As soon as confirmation from TPR is received, Fourth will amend the system with the confirmed earnings thresholds and inform customers with an additional release note that this is complete.
Expected Rates
Fig.5 – Expected Pension Rates
Rolling Over the Portal
Fourth’s Payroll Specialist team will contact customers near to the completion of their final pay runs for the 2016/2017 tax year, arranging for portals to be rolled forward to the 2017/2018 tax year.
What the Rollover will do
This section describes the changes made by the system when the Portal is rolled over into the new tax year. When viewed on the Employee History screen, these changes are indicated as a System Operation as per the example below.
Fig.6 – Employee History
Tax Code Uplift
From 6th April 2017 tax codes will be uplifted as per the following table:
For example:
o 1100L becomes 1150L
o 964M becomes 1019M
o 816N becomes 861N
Week 1\Month1 Indicators will not be taken forward into 2017/18 on any tax code.
PAYE Rates and Thresholds:
Rates and thresholds for Tax in the rest of the UK (rUK) and Scotland (SRIT) and National Insurance will be updated for the new tax year as part of the portal roll over. As result, pay will be calculated accordingly for 2017/18 for pay dates on or after 6th April 2017.
- See Payroll > Admin > Payroll Statutory Information Screen or Fig.4 above for actual rates and thresholds for 2017/18.
- Pension > Administration > Pension Scheme {select scheme} > Pension Diary
If the Pension Dairy has not already been manually updated for tax year 2017/2018 this will happen when the portal is rolled over into 2017/18.
In some circumstances dates that are scheduled by the system may need to be edited. Therefore, when the diary is generated, it is important to check and verify the dates, editing dates as appropriate using the edit option on each row.
Pension Phasing
- Pension > Admin > Pension Statutory Information Screen
This has been updated to the correct phasing dates as follows.
Fig.7 –Minimum Contribution Phasing information
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