The Chancellor of the Exchequer, Rishi Sunak, has announced that the government will publish the Budget on Wednesday 3 March 2021.
The Budget will set out the next phase of the plan to tackle the virus and protect jobs and will be published alongside the latest forecasts from the Office for Budget Responsibility (OBR).
Opinion – risks for payroll
For the second year running, the government have delayed the budget. That, in itself, is not overly a problem.
However, the payroll software development community, employers and payroll professionals will worry whether change can be applied in time.
So we know:
- National Living Wage and National Minimum Wage rates
- Student Loan deduction thresholds
- And the statutory payment rates, but with one missing essential ingredient, the Earnings Threshold that triggers entitlement.
What don’t we know yet and which is critical:
- It is critical that the National Insurance banding, thresholds and contribution rates are confirmed urgently – software developers need to know the changes in readiness for development, testing and implementation for payroll processing in March in readiness for 6th April 2020 onwards payments
- The trigger threshold for statutory payments, without the payments will be wrong
- And the Pension AE threshold and any banding changes
Of course tax can be applied late and under the cumulative principle of tax calculations and collection, it all catches up. But not for NICs and associated items. Scotland and Wales changes, if there are any, will have to wait until Westminster set the late change date. In 2020, the changes for tax applied from 11th May.
The payroll industry needs certainty to prepare in advance for April 2021.