Ensuring Payroll Compliance: The start of the tax year

It is always important that you are compliant with payroll legislation, but particularly so as an old tax year ends and a new one begins. Last month we brought you a blog all about what you need to do to finish the old tax year, and now this month we identify the actions you need to take to start the new tax year.

Change National Minimum & Living Wage rates

The new rates for NMW and NLW apply from 1st April 2024. Read our blog here for the lowdown on all the changes you need to be aware of.

 Change Statutory Parental Pay rates

The statutory parental rate – applying to maternity, paternity, adoption, bereavement, and shared parental pay – increases on the first Sunday of April each year, so this year’s deadline is Sunday 7th April 2024. The new rate of £184.03 is paid from the first full statutory week on or after this date. (The statutory week is calculated from the day of the week that the employee starts their parental leave).

Change Statutory Sick Pay rate

From 6th April there is a new SSP rate of £116.75 per week, divided into a daily rate by the number of days in the employee’s working pattern.

Change National Insurance Contribution rates for directors

The hybrid rate for directors finishes at the end of the old tax year, so you will need to change directors’ NIC to the same rate as employee NIC. Employer NIC rates remain the same.

Change Student Loan thresholds

The thresholds for employees on Student Loan Plans 1 and 4 has increased, so you will need to reflect this in your payroll. (The threshold for Plan 2 remains the same this year.)

Remove non-cumulative tax code indicator

All employees paid in the previous tax year need their non-cumulative tax code indicator removed from their tax code before the start of the new tax year.

Register to payroll benefits

 If you plan to start payrolling benefits this year, you need to register this with HMRC before the start of the tax year. Once registered, if at a later date you decide to stop payrolling benefits you will need to notify HMRC of this decision.

Check your eligibilities

Thanks to the introduction of freeports and investment zones, National Insurance categories, rates and thresholds are changing in some areas of the country. You will need to check if your business falls under one of these zones as your NI responsibilities may have changed.

You will also want to check your eligibility for small employer’s relief and employment allowance, and action any changes before your April payroll.

Clearly there is a lot to think about when staying compliant at the start of the tax year. If you’d rather just avoid all the drama, and a potential fine, why not outsource your payroll to us here at Payroll Junction? This time of year is a great time to switch over to us, so get a quote today!