So here we are again, another tax year is about to end and a new one begin.
Given this we have some key information on the changes that may affect you from 1st April 17 including the new tax thresholds, pension changes and apprenticeship levy.
Rates and Thresholds
We've summarised new thresholds for 2017/18 below, although please note some of these remain unchanged from the current year. For our Scottish contractors with a tax code prefix S please note the different thresholds. All the below will come into effect from 6th April 2017 expect for minimum wage which will be from the 1st April 2017.
The national minimum wage will rise 4% from £7.20 to £7.50 an hour, in new plans set to go live on the 1st of April 2017. The national minimum wage has notably increased from 2010 when it was only £5.93 for ages 25 and over. The government announced that its target is to increase to £9 an hour by 2020. The announcement has been subject to discussion. Many argue that the increase is not enough, others argue that setting higher minimum wages would lead to fewer job opportunities.
Umbrella Workplace Pension
NEST is making some improvements to their service in March 2017. From April 2017, you'll be able to transfer money into NEST from a UK based-pension scheme that's registered with HMRC. NEST will only be able to accept certain types of transfer payments.
From April 2017, you'll also have the option to transfer your pot to another registered pension scheme even if you are under the age of 55. You can find out how to transfer money in or out of NEST in the member help centre.
The annual contribution limit (ACL) is the maximum amount that can be contributed to any member's NEST retirement pot in a tax year. This limit is being removed from 1 April 2017. Until then, the current annual contribution limit still stands at £4,900 for the 2016/17 tax year
Construction Industry Scheme - subcontractor verifications
In 2016 it was announced that there would be improvements to Construction Industry Scheme (CIS) online verification service.
From April 2017, contractors must use an approved method of electronic communication to verify their subcontractors. As such from April 2017 HMRC will no longer accept any telephone calls to verify subcontractors and verification. PayStream already have the system capabilities of verifying all our CIS workers through our Commercial CIS software.
As a large employer, PayStream is subject to the new apprenticeship levy. The levy is calculated as 0.5% of gross pay in a similar way to Employers National Insurance. For example, if gross pay is £500.00 there will be an apprenticeship levy deduction of £2.50 which is paid to HMRC each month.
Tax Year Timeline
What important tax deadlines do you need to be aware of?
- 1st April - National Living Wage increases to 2017/18 rates.
- 5th April - Last day of the 2016/17 tax year.
- 6th April - First day of the 2017/18 tax year.
- 6th April - First Day of Government new Apprenticeship Levy Scheme.
- 19th April - Outstanding PAYE tax and Class 1 NICs Deadline for postal payments to reach HMRC for previous tax year.
- 22nd April - Outstanding PAYE tax and Class 1 NICs Deadline for electronic payments to be cleared by HMRC for previous tax year- As 22nd April 2017 is a Saturday, the payment will need to clear into the HMRC account by Friday 21st.
- 31st May - Last date to provide each employee with their P60.
- 6th July - Deadline for filing forms P9D, P11D, P11D (b) for previous tax year.
- 19th July - Class 1A NICs - postal payments must reach your HMRC Accounts Office.
- 31st July - Deadline for second Self-Assessment payment account for previous tax year.
- 19th October - Payment over of tax and Class 1B NIC in respect for PSAs.
- 31st October - Deadline for paper submission for previous tax year.
- 30th December - Deadline for online submission of Self-Assessment tax return for previous tax year. To collect tax through clients PAYE codes.
- 31st January - Deadline for paying Self-Assessment 'balancing payments' for tax year ended 5th April 2017.
- 31st January - Deadline for first Self-Assessment payment on account for tax year ended
5th April 2017.
- 5th April - Tax year ends.
- 19th of each Month - Deadline for postal payments remittance of PAYE, NIC's & CIS to HMRC.
- 22nd of each Month - Deadline for electronic remittance of PAYE, NIC's & CIS to HMRC.