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Critical Updates, Issue 74, September 2015

Advisory fuel rates from 1 September 2015

These fuel rates apply to employees using a company car from 1 September 2015. You can use the previous rates for up to one month from the date the new rates apply.

Engine size                         Petrol per mile
1400cc or less                               11p
1401cc-2000cc                              14p
Over 2000cc                                   21p

Engine size                         Diesel per mile
1600cc or less                                9p
1601cc to 2000cc                         11p
Over 2000cc                                  13p


Student loans - changes from 6 April 2016

From 6 April 2016 a new student loan threshold of £21,000 will be introduced and will be known as a Plan 2 loan. If you have employees repaying under the existing threshold, they will be unaffected by the change and these existing loans will be described as a Plan 1 loan.

All software recognised by HMRC will calculate student loan deductions based on either a Plan 1 or a Plan 2 threshold.

Key facts:
• As now, payroll software will deal with student loan calculations at the same time as it calculates tax and NICs
• Employers will never be asked to operate more than one plan type at a time for any individual employee
• As now, the main employer notification method will be the SL1 Start notice. Every SL1 issued will indicate which plan type should be operated
• When updating employee information on payroll software, employers will have to input which plan type applies
• As now, employers will collect and record starter information. If the employee is repaying a student loan they will now also need to ask which plan type the employee is repaying under
• From 6 April 2016 the Starter declaration checklist will prompt employers to ask new employees about their student loan plan type
• Form P45 will only indicate whether an employee is already repaying a student loan. It will not indicate a plan type and so employers must ask the new employee for this information. If an employee doesn't know, the employer should adopt a Plan 1 type by default
• In some cases a plan type could change in year. The notification method will be a new SL1. When a new SL1 is received showing a different plan type an employer should simply amend their payroll software for the new plan type and deductions will continue uninterrupted. In these circumstances an SL2 Stop notice will not be issued, only a new SL1.

Biometric Residence Permits

The Home Office is simplifying the documents employers check to confirm a person's right to work in the UK.

Since 2008, the Home Office has been phasing in the Biometric Residence Permit (BRP), which replaces a range of older less secure immigration documents and provides a simple and secure means of checking a migrant's identity and right to work.

The roll out of the BRP has now been completed. From now the BRP will be the only document issued to non-European Economic Area (EEA) migrants permitted to stay in the UK for more than six months under the UK's Immigration Rules. Non-EEA migrants who register with the Home Office as exercising European Union (EU) treaty rights as family members of EU nationals will receive a Biometric Residence Card (BRC), which closely resembles the BRP.

The BRP and the BRC are single credit card sized documents and allow migrant workers from outside the EEA to evidence their right to enter or remain in the UK.

The BRP only applies to migrants from countries outside the European Economic Area, their partners and children.

The BRP shows the worker's digital photograph, biographical data (name, nationality and date of birth), any immigration conditions or restrictions, and the date the person's permission to remain expires on the face of the card. This information is replicated digitally on a chip in the card, together with the holder's fingerprints.

The Home Office is also working with the Department for Work and Pensions (DWP) to incorporate a migrant's National Insurance number on the BRP for migrants in employment-related categories, and the BRPs issued to Tier 2 skilled workers have started to include the National Insurance number.


Update on Employer-Supported Childcare

The Supreme Court confirmed on 1 July that the government's proposals for delivering Tax-Free Childcare (TFC) were lawful. This upholds previous judgments from the High Court and the Court of Appeal.

The government welcomed the court's judgment but has also announced that, as a direct result of the delay caused by the legal challenge, Tax-Free Childcare will now launch from early 2017.

The government has also announced that the existing Employer-Supported Childcare scheme (ESC - often known as childcare vouchers) will remain open to new entrants until Tax-Free Childcare is introduced.

If you operate an ESC scheme, your employees who currently use it will be able to choose to stay in that scheme while you offer it.


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