Month: February 2024

Year end payroll reporting

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It is not that long until the current 2023-24 tax year comes to an end and there are a number of year end payroll chores that must be completed. This includes sending a final PAYE submission for the tax year. The last Full Payment Submission (FPS) needs to be submitted no later than the last payday for your employees of the 2023-24 tax year.

It is also important that employers remember to provide employees with a copy of their P60 form by 31 May 2024. A P60 must be given to all employees that are on the payroll on the last day of the tax year – 5 April 2024.

The P60 is a statement issued to employees after the end of each tax year that shows the amount of tax they have paid on their salary. Employers can provide the P60 form on paper or electronically. Employees should ensure they keep their P60s in a safe place as it is an important record of the amount of their earnings and tax paid.

In addition, a P60 is required in order that an employee can prove how much tax they have paid on their salary. For example:

  • to claim back overpaid tax;
  • to apply for tax credits; and
  • as proof of your income if you apply for a loan or a mortgage.

Employees who have left their employment during the tax year do not receive a P60 from their employer, as the same information will be on their P45.

The deadline for reporting any Class 1A National Insurance contributions and submitting P11D and P11FD(b) forms to HMRC for the tax year ending 5 April 2024 is 6 July 2024.

National Insurance and tax after State Pension Age

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If you have reached the State Pension age and continue to work, in most cases, you no longer need to pay National Insurance Contributions (NICs).

At State Pension age, the requirement to pay Class 1 and Class 2 NICs ceases. However, you will remain liable to pay any NICs due to be paid to you before reaching the State Pension age. If you continue working, you need to provide your employer with proof of your age.

Your employer remains liable to pay secondary Class 1 employer NICs. If you would rather not provide proof of age to your employer, you can request a letter (known as an age exception certificate) from HMRC confirming you have reached State Pension age and are no longer required to pay NICs.

If you are self-employed you will need to pay Class 4 NICs for the remainder of the year in which you reach State Pension age but will be exempt from the following year.

HMRC provides the following example. Someone who reached the State Pension age on 6 September 2023 will stop making Class 4 contributions on 5 April 2024 and pay their final Class 4 bill by 31 January 2025, together with any Income Tax due.

If you have overpaid NICs you can claim the excess back from HMRC.

Spring Budget 2024

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The Chancellor of the Exchequer, Jeremy Hunt has confirmed that the next UK Budget will take place on Wednesday, 6 March 2024. This will be the Chancellor’s second Budget and will include the government's tax and spending plans as well as new growth and borrowing forecasts. Various pundits are suggesting that selecting a Budget date in early March leaves the possibility of a general election as early as May 2024. The next general election is required to take place by January 2025.

There may be a round of new tax-cuts and changes as the government works to attract voters and narrow the gap against Labour. Details of all the Budget announcements will be made on a special section of the GOV.UK website which will be updated following completion of the Chancellor’s speech.

The Budget will be published alongside the latest forecasts from the Office for Budget Responsibility (OBR). This forecast will be in addition to that published for the Autumn Statement and fulfil the obligation for the OBR to produce at least two forecasts in a financial year, as is required by legislation.

The OBR has executive responsibility for producing the official UK economic and fiscal forecasts, evaluating the government’s performance against its fiscal targets, assessing the sustainability of and risks to the public finances and scrutinising government tax and welfare spending.

Digital labelling of imports

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Businesses are set to benefit from savings as import labels are made digital for the first time.

  • New legislation to introduce digital labelling for British businesses to cut red tape and save millions in unnecessary regulation costs.
  • Recognition of CE marking continued for products such as toys and machinery, easing burdens to businesses.
  • Digital labelling reforms made possible by Brexit and ensures the UK’s regulatory requirements are fit for the modern world.

The government hopes that digital labelling will allow businesses to place important regulatory or manufacturing information online rather than requiring them to physically print it on their products – saving time and money which can be pushed towards scaling up and growing companies.

This measure has been made possible by leaving the EU and provides greater flexibility than the EU’s regulatory requirements while better reflecting the modern and digital world of business and international trade.

The change follows the Product Safety Review consultation and extensive industry engagement – looking at ways to cut costs while benefitting consumers and ensuring regulatory systems are agile. The move towards digital labelling has been an issue industry has lobbied for consistently.

This comes as part of a wider range of measures covered by the smarter regulation programme, which ensures our laws and regulatory regime are better tailored to the interests of UK businesses, consumers and the economy.

This announcement does not apply to regulations for medical devices, construction products, marine equipment, rail products, cableways, transportable pressure equipment and unmanned aircraft systems, led by relevant government departments.