Payroll & Reward Brunch – January 2021

  • Date: 28 January 2021
  • Duration: 1 Hour
  • Cost: On Demand

Thank you for your interest in the first of our 2021 Payroll and Reward Brunches.

As promised, the updated slides including the tables and charts of information, as we know it, are available for download.  There have been some additions to the slides as a result of announcements shortly afterward.

  • The Scottish Budget was held on the afternoon of 28 January 2021 and we include details of the proposed rates and thresholds
  • HMRC advised the uplifts necessary for the Marriage Allowance in 2021/22

We have identified these on the slides with a green star.

Questions and answers from the end of the brunch are available below after the video.

Additionally, Ian Holloway will be chatting with Kate Upcraft to answer the frequently-asked IR35 questions and conundrums that you posed before, during and after the brunch.  We will let you know when this recording is available.

Join us for our next Brunch on 25 February 2021 when we will be talking about finishing off one tax year and starting the next.  This is always a challenging time, regardless of how many times we have done it in our careers.

Questions & Answers

When do you think that payroll will be in a position to have all of the rates and thresholds to start the new tax year?  We’re not that far away now.

Well, we have the Budget on 03 March 2021 and have to digest anything that might come as a result of that.  Things do seem to be slipping out gradually, though, as most of the rates and thresholds are incremented by formulae in existing legislation – National Insurance, tax, etc.

So, I would hope by the end of the first week of March 2021 we will have the full picture.  Of course, let’s hope that the Chancellor does not make any fundamental changes in the Budget.

 

You mentioned that we had the National Living Wage rates from 01 April 2020.  Legislatively, is this the date from which they have to be paid, as the 1st falls on the last day of a weekly pay reference period so I am thinking I will have to pay 6 days at one rate and 1 day at another?

This is a question that comes up every year, probably because the likes of Ministers and TV news says that the rate is payable from 01 April.  The legislation says that the new rates are payable from the start of the first pay reference period that commences on or after 01 April.  So, legislatively, if 01 April is the last day of a pay reference period, the first pay reference period that starts on or after this date is the one that commences 02 April.

If you want the actual piece of legislation that says this then it is the National Minimum Wage Regulations 2015.  Also, have a look at HMRC’s National Minimum Wage Manual.

 

We payroll our benefits instead of producing the P11D.  however, we cannot do that for accommodation and beneficial loans benefit.  I thought that this was going to be allowed from April 2021.  Is that the case?

That was the intention.  However, only last week I was advised that due to the software changes required on HMRC’s side, this date is not possible and they have now pushed back the implementation date to April 2022.  I’m also told that whilst it looks as though everything is COVID-related, payrolling work is still going on in the background.

 

We understood that apprenticeships were going to be front-loaded from April 2021.  Is this still going ahead?

For those that don’t know, front-loading has always been available in apprenticeships and is where the essential requirements of the apprenticeship are pushed to the front rather than spread the 20% off-the-job training over the course of the apprenticeship.  So, for example, someone that was needing to be able to drive as part of their job would have this part of their training pushed to the front to make them effective in their profession earlier on.  What was announced in the Spending Review in November 2020 was plans to make this more innovative for certain apprenticeships in construction followed by health and social care.  I’m not aware that a pilot for this has started yet.

 

Are there any fundamental changes to the Auto-Enrolment regime that we need to be aware of for 2021/22?

Not for 2021/22, save for the fact that the Upper QEB has increased.  What you should be aware of is that the 2017 Review of Automatic Enrolment recommended 2 things from the mid-20s:

  1. Removal of the lower QEB – i.e., assessment and contributions from £1
  2. The lower age limit will be reduced from 22 to 18

Both of these things will be subject to consultation beforehand.