Several changes to tax and NI was announced in the 2014 Autumn Statement.
Tax Code Changes
The basic personal allowance will rise by £600 to £10,600 from 6 April 2015. Therefore, unless you receive an amended code notification for an employee, all “L” suffix codes will need to increase by 60 for 2015/16, e.g. code 1000L becomes 1060L.
The P suffix, for people born between 6 April 1938 and 5 April 1948, will increase by ten points reflecting the fact that the allowance for this age bracket will increase from £10,500 to £10,600. The remaining bracket, for people born before 6 April 1938, will remain unchanged at £10,660.
Employers’S NI changes
Announced in the 2013 Autumn Statement was that from April 2015 employers’ NI will be abolished for employees under 21 earning up to the upper secondary threshold (a new term for this new NI exemption) which will be £815 a week for 2015/16. If your company employs a lot of younger workers, then this could make a significant dent in payroll costs. For example, for a 20-year-old employee earning £12,000 a year, the employers’ NI saving would be £536 (£12,000 – £8,112) x 13.8%). Employers’ NI is also being abolished for apprentices aged under 25 earning up to the upper earnings limit from April 2016.
Benefits in kind changes
From April 2015 there will be a statutory exemption for trivial benefits in kind costing less than £50. But what’s considered trivial? The final details aren’t yet known but HMRC’s consultation document on this stated that it should not include cash or vouchers and should be a one-off or irregular item. Examples it gave included a bottle of wine or a small gift when an employee is ill or to mark a special occasion. From April 2016, there will be a number of other measures affecting benefits including the abolition of the £8,500 threshold, i.e. the end of the Form P9(D), and a general exemption for reimbursed non-taxable expenses (no need to analyse employee expenses forms to find the amounts to enter in section N of the P11D).
For more information on Tax, NI and tax credit rates for 2015/16 – https://www.gov.uk/government/publications/tax-and-tax-credit-rates-and-thresholds-for-2015-16/tax-and-tax-credit-rates-and-thresholds-for-2015-16#national-insurance-contribution-thresholds
Source: HMRC and Tips & Advice