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Critical Updates, Issue 75, November 2015

National Minimum Wage rates

The National Minimum Wage (NMW) was increased from 1 October 2015. The hourly rates applying now are as follows:

Employees aged 21 and over                                            £6.70

Employees aged 18-20                                                       £5.30

Employees over school leaving age and under 18        £3.87

Apprentices                                                                            £3.30

(aged 16-18 or aged 19 and over in the first year of their apprenticeship)

Intrastat - thresholds from 1 January 2016

There will be no change to the arrivals, dispatches and exemption thresholds and delivery terms thresholds for 2016. However, the low value consignment threshold will be reducing from £160 to £150 from 1 January 2016.

Taxing your employees' benefits and expenses through your payroll

We promised to issue an update as soon as HMRC published details of the new process.

You need to register now to used the Payrolling Benefits in Kind online service if you want to start or continue payrolling in the 2016 to 2017 tax year. If you're intending to or already payroll benefits and expenses you must register them with HMRC using the new online Payrolling Benefits in Kind (PBIK) service. If you use this service and payroll benefits and expenses you won't have to report them on a P11D. The only benefits you can't payroll using this service are vouchers and credit cards, living accommodation, and interest free and low interest (beneficial) loans. If you're already payrolling benefits and didn't register you can continue to do so but you must still report them on a P11D.

You'll need to align your payroll software and register to payroll using the new service by 5 April 2016. You won' t be able to register after this date for the 2016 to 2017 tax year as HMRC can't process changes in-year. To avoid being sent multiple tax codes for your employees you need to register before the annual coding process which usually starts around 21 December.

If you don't register the benefits and expenses you'll have to report them on a P11D. From the 2016 to 2017 tax year HMRC will no longer accept informal reports of employee benefits.

All payrolled benefits and expenses need to be included when you report your payroll information in a Full Payment Submission.

P11D(b) forms must still be completed, including the total benefits and expenses provided, whether or not they've been put through your payroll. However, if you payroll car and car fuel benefit you mustn't complete P46 (Car) forms as you're deducting the tax due on these benefits at source.

Irish Budget 2016

The following changes are due to take effect from 1 January 2016 unless otherwise stated:

Tax rates

There have been no changes to the 20% and 40% tax rates.

Standard rate cut-off point (SRCOP)

There have been no changes to the tax bands.

Personal tax credits

The personal tax credits remain unchanged for 2016.

Universal Social Charge (USC)

Where an individual's gross income exceeds €12,012, USC is chargeable for 2016 at the following rates through the PAYE system:

Universal Social Charge Age under 70 years rate

First €12,012 1.0%

Next €6,656 3.0%

Next €51,376 5.5%

Balance 8.0%

A rate of 8% applies under the Emergency Basis.

2016 PRSI changes

Employees earning between €352.01 and €424 in a week and who pay Class A PRSI will be entitled to a new weekly PRSI Credit which will reduce the amount of PRSI deducted from their earnings in that week.

Calculation of the Class A PRSI Credit

Class A employee PRSI will continue to be calculated at 4% of gross weekly earnings.For gross earnings between €352.01 and €424 in a week, the 4% PRSI charge will be reduced by the new PRSI Credit.

The amount of the PRSI Credit depends on the employee's gross weekly earnings.

At gross weekly earnings of €352.01, the maximum PRSI Credit of €12.00 per week applies.

For earnings between €352.01 and €424, the maximum weekly PRSI Credit of €12.00 is reduced by one-sixth of earnings in excess of €352.01.

Fortunately, payroll software will make the adjustment to the amount of PRSI charged from 1 January 2016.



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