We know that January 1st was quite a while ago now, the new year we’re talking about is the new tax year which starts in the first week of April.
Why are we talking about that now? Well, it’s important to review all the requirements that will impact you as an employer. So, if you have staff, do read on.
From April the minimum wage rates in the UK will increase so that those aged 25 upwards will need to be earning £8.21 per hour, those aged 21 to 24 (inclusive) need to be paid £7.70 per hour, 18 to 20 year olds £6.15 and under 18’s are entitled to £4.35 per hour. Different rates apply to apprentices (should this be of interest, please contact us for more information).
As an employer, it is critical that you do not break the law in respect of paying your employees the legal minimum. HMRC may investigate, fine and name your company publicly not to mention the potential for your employees to take action against you. All of which could have a negative impact on your business in the longer term.
Our payroll team can provide an analysis of your team and confirm the likely impact of the increases as well as ensuring that you are able to meet the minimum requirements.
Paying staff a fair wage is known to be a great way to increase productivity, reduce staff turnover and boost morale. Why not contact us today and see if we can help analyse what increases are affordable for your business?
On top of the increases to minimum wage rates, the auto-enrolment (pension) rules continue to have an impact. Auto enrolment is a legal requirement for almost all employers and aims to provide a workplace pension for all workers subject to meeting certain criteria. This year the minimum contributions of both workers and employers are increasing meaning that there is yet another cost impact on businesses.
As an employer you will be required to contribute at least 3% and your employees will need to put in 5% of each wage payment towards their pension pot. So, despite the increase in the minimum wage, some employees are likely to see a slight wage drop overall. Of course, these rules only apply if your employees have opted in or are required to be automatically enrolled into the pension.
If you’re not sure how the pension rules impact your business, please get in touch and we’ll happily talk you through the options and see how Magpie Accountancy can help you. If you want to discuss any aspect of payroll we would be delighted to hear from you and provide details of how we can help.
Written by Scott Preston