Preparations for tax year 2021/2022

The PAYadvice Series – Payroll Legislation Update 2021

PAYadvice.UK Legislation Update 2021

PAYadvice.UK have issued its first version of the Legislation Update 2021. This is a compilation of the changes due for 2021 for the UK and Channel Islands. Some values are subject to further confirmation and change. When further information is confirmed further editions / versions will be made available.

The following are links to blogs and information on payroll changes for 2021.

Guernsey (1st Jan 2021)

The States of Guernsey Class 1 contribution changes for 1st January 2021 have been confirmed

Jersey (1st Jan + 1st Jul 2021)

The States of Jersey Social Security contribution changes for 1st January 2021 have been confirmed. Further changes have also been confirmed which apply from 1st July 2021.

United Kingdom (April 2021)

The United Kingdom’s Westminster Parliament budget has been set as Wednesday 3rd March 2021.

Income Tax

As part of the winter statement, it has been confirmed that the personal tax allowance which is currently £12,500 will be uplifted by the Inflation rate for September 2020 which is 0.5%. This predicted to be £12,570.

This may result in the following (yet to be confirmed)

Right to Work checks

Revised New Starter Checklist for April 2021

With the introduction of Scottish Student Loan Plan 4, a revised New Starter Checklist is introduced for April 2021.

Real Time Information (RTI) changes

Minor changes have been to the RTI requirements with the introduction of the Scottish Student Loan plan type 4 along with standard annual changes.

-Benefits

Changes to the Van benefit charge

-England and Northern Ireland

The Westminster Parliament budget has been delayed and will be held on Wednesday 3rd March 2021.

Confirmed Details of the tax changes for England and Northern Ireland (referred to as the rest of the U.K.) are awaited. Indicative values based on known information is contained in the PAYadvice.UK Legislation Update 2021 PDF document.

-Scotland

The Scottish Government’s budget will be published on Thursday 28th January 2021.

Detail on Scottish tax changes are not yet available.

-Wales

The Welsh draft budget published on 21st December 2020 proposes that no changes are to be applied for the 2021/2022 tax year. Income tax for Wales will mirror those for England and Northern Ireland.

National Insurance

As part of the winter statement, it was confirmed that values would be uplifted by the Inflation rate for September 2020 which is 0.5%.

Details of the indicated values are as follows:-

No payroll changes for NIC Holiday for veterans are taking place for April 2021, alternate temporary measures to claim the rebate will be implemented with a more full payroll change under consideration for April 2022.

Off-Payroll workers in the private sector

Off-payroll proposals are being progressed for implementation from April 2021.

National Minimum & Living Wage

The 1st April 2021 National Minimum Wage and National Living Wage rates have been confirmed.

And for comparison the voluntary Living Wage Foundation rates

Statutory Payments

As part of the winter statement, it has been confirmed that values will be uplifted by the Inflation rate for September 2020 which is 0.5%.

Details have been confirmed as follows:-

Student Loan deductions

The student loan thresholds and rates operational from 6th April 2021 have been confirmed and issued along with details on the changes by the Scottish Parliament which bring into play Student Loan Plan 4:

Pension Auto Enrolment thresholds

Detail is yet to be confirmed by the DWP and The Pension Regulator (TPR). Some indicative values are contained in the PAYadvice.UK Legislation Update 2021 based on the revised National Insurance earnings levels, however, the finalised values are yet to be confirmed by the Pension Minister and the DWP.

Isle of Man (6th April 2021)

Details of any Income Tax and National Insurance changes are awaited.

PAYadvice.UK – updated 18/1/2021