News

Posted on by caw-d-h3f-u-034354

Looking at the pending changes to employers in respect of Payroll.

In the October budget statement the new chancellor confirmed changes to the costs relating to employees and employers, these have been summarised below.
1. Class  Employers National Insurance
From April 2025 all UK employers will have to pay 15% National Insurance on all employees’ earnings above the secondary threshold. The secondary threshold will be reduced from £9,100 to £5,000 per annum. This means that the employer will start to pay the higher rate at £4,100 lower than in the year 2024/25.
Review of the pending changes
This change will mean that for any employees in your workforce who earn above £5,000 a year, 15% of national insurance will be due as opposed to the present 13.8%. The reduction in the threshold will also push lower earners into paying employer national insurance. Note that the annual amount of £5,000 is divided into monthly amounts of £416.67 and the new rate of employer’s NIC will be calculated on the gross salary in excess of that amount each month.
Example of the Impact
An employee receives a monthly gross salary of £1,500 will have the following employer national insurance due at 15%:
2025/26 Employer’s NIC Liability
£1,500.00 – £416.67 = £1,083.33 x 15% = £162.50
Current Year 2024/25:
£1,500.00 – £758.33 = £741.67 x 13.8% = £102.35
In regards to this employee the impact monthly to the employer in respect of Er’s NIC will be £60.15. If this is then adjusted to show the annual cost of Employers NIC this will be £721.80.
2. Minimum Wage Increases
From 1st April 2025 the new minimum rates have been set as outlined in the table below
Current and New Hourly Rates
These rates are for the National Living Wage (for those aged 21 and over) and the National Minimum Wage (for those of at least school leaving age). The rates change on 1 April every year.
21 and over 18 to 20 Under 18 Apprentice
April 2024 (current rate) £11.44 £8.60 £6.40 £6.40
April 2025 £12.21 £10.00 £7.55 £7.55
All employers have the responsibility to ensure that the staff are paid at no less that the new rates based upon their age.
The impact is that from 1st April 2025 all staff paid at the minimum wage set for 2024/25 will see an increase in their pay to ensure that their hourly rate of pay meets the new legislation.
Impact
  1. The impact on the employer’s wages burden will increase as the employees salary is adjusted to take into account the new rates of pay.
  2. It is highly likely that this increase in salary will also result in additional Employers NIC liability, as the new limits and rates for this also are introduced from April 2025.
  3. In some instances where Individual staff members move to a new age band this will see a sizeable increase in the employer’s costs
3. Employer’s Annual Allowance
As from the 1st April 2025 the employer’s Annual allowance will be increased to £10,500 per year.
This is available to all employers, unless there is one employee who is the director.
Previously employees who had an employer’s NIC liability in excess of £100k would be exempt from claiming the annual allowance, this has now been removed.
Impact
  1. Small employers may see no impact if there Employer’s NIC is currently below £5,000 per year
  2. Other employers may find that they pay no Employer’s NIC as the new allowance covers all of the Employer’s NIC liability.
Overall summary in regards to PAYE changes
It is apparent that being an employer is becoming more expensive as minimum wage increases and Employers NIC changes have an impact on the costs of . There is some relief in regards to the increase in the annual allowance increase. The smaller employer may find that the new annual allowance covers the additional cost of Employer’s NIC and may even result in some seeing a saving as the annual allowance actually covers all Employers NIC that in prior years exceeded the annual employer’s allowance of £5,000.00.
The annual rise in minimum wage although being welcomed by the individual employee is certainly impacting on some employers especially in the hospitality and leisure industries where margins are extremely tight due to increased taxes, costs and pressures from larger chains. This will result in these employers looking more closely at staffing needs in order to ensure the business can continue to carry on its trade.
It is apparent that these changes are expected to raise a significant amount of tax for the treasury and most business will see an increase in salary costs and employer’s NIC liability. The increased minimum wage may see staff who are currently under the £5,000 annual salary (Part Time staff), now exceeding this amount and therefore the employer will need to start paying Employers NIC for that staff member as well.
 _________________________________________

Stamp Duty Land Tax (SDLT) and pending Changes

The higher rates of SDLT relating to the purchase of second homes and rental properties increased from 3% to 5% as at 31st October 2024.
Current SDLT Rates
Normal mainstream SDLT rates re purchasing residential property from 31st October 2024
Property Cost
SDLT Rate
Up to £250,000
Zero
£250,001 to £925,000
5%
£925,001 to £1.5million
10%
Over £1.5million
12%
Purchasing a second home (or rental domestic property) Rates (5% surcharge), from 31st October 2024
Property Cost
SDLT Rate
Up to £250,000
5%
£250,001 to £925,000
10%
£925,001 to £1.5million
15%
Over £1.5million
17%
These increased rates of SDLT, are impacting on all potential  property owners but specifically for landlords, as these increases make owning properties less attractive! The increased SDLT surcharge will certainly be a major factor for landlords who are considering acquiring further ‘buy to let’ properties.
Non-UK residents
Non-UK residents that purchase a residential property in England and Northern Ireland are liable to a 2% SDLT surcharge (the NR surcharge).
The NR surcharge will apply to the total purchase price of the property. It adds an additional 2% to each of the existing SDLT residential rates.
Identifying a non UK Resident
An individual will be non-UK resident for the purposes of SDLT if they spend fewer than 183 days in the UK in any continuous period of 365 days, beginning 364 days before and ending 365 days after the transaction occurs.
Limited Companies
Limited companies will always pay a 5% surcharge, on top of the standard SDLT rate when they purchase residential property in England and Northern Ireland.
First-time buyers
The threshold for first-time buyers was temporarily increased in September 2022 to £425,000 and the maximum value of a property on which first-time buyers’ SDLT relief can be claimed was also increased to £625,000.
The SDLT position for first time buyers is currently as follows:
Property Cost
SDLT Rate
Up to £425,000
Nil
£425,001 to £625,000
5%
These SDLT reductions will remain in place until 31 March 2025.
Certain first time buyers will have to act very promptly in order to complete their purchases before 31st March 2025. If they fail to do so, in some cases huge extra SDLT will be payable!
Changes to Stamp Duty Land Tax
From 1st April 2025, the nil rate SDLT threshold will be reduced from £250,000 to £125,000, marking the end of the SDLT holiday, as set out in the budget of September 2022.
The first time buyer threshold will also be reduced from £425,000 to £300,000.
From 1 April 2025, the property limit for the SDLT reduction for first-time buyers will resort to £500,000 and only the first £300,000 of the value of the property will be exempt from SDLT, with 5% payable on any remainder up to the reduced £500,000 figure.
For other buyers, individuals who are selling their current residential home and moving to a new property, from April 2025 the £250,000 exemption will halved and only the first £125,000 of a property purchase will be stamp duty free, with a 2% rate charged from £125,000 to £250,000.
Stamp Duty Land Tax — residential property from 1 April 2025
Property value
Rate (on portion of value above threshold)
Rate (on portion of value above threshold) if purchase is of an additional residential property
£0 to £125,000
0%
5%
£125,001 to £250,000
2%
7%
£250,001 to £925,000
5%
10%
£925,001 to £1.5 million
10%
15%
Over £1.5 million
12%
17%
The impact on delaying the purchase of a property until after 31st March 2025, will have a significant impact on the amount of SDLT that would be due if the property value exceeds the new annual exemption limits.
Overview
Landlords purchasing domestic rental properties are now also badly hit by the increased SDLT rates.
Stamp Duty Land Tax must be taken into account when purchasing a property as the new rates are applied at a lower value therefore seeing the final amount due on the property much higher after 1st April 2025. Property owners need to consider this additional cost as it is paid as part of the completion of the purchase.

____

Companies House Charges

What this means for you
Company incorporation and registration fees
Transaction                                                                             Channel                 New Fee
Incorporation                                                                            Digital                       £50
Incorporation (same day)                                                        Software                   £78
Incorporation                                                                            Software                   £50
Incorporation                                                                            Paper                         £71
Registration under s1040 (Part 33 Chapter 1) CA06             Paper                         £71
Re-registration of a company under Part 7 CA06                 Paper                         £71
Re-registration of a company under section 651 CA06       Paper                         £71
Re-registration of a company under section 665 CA06       Paper                         £71
Confirmation statement                                                          Digital                       £34
Confirmation statement                                                          Software                   £34
Confirmation statement                                                          Paper                        £62
Change of name                                                                        Paper                        £30
Change of name (same day)                                                    Digital                       £83
Change of name                                                                        Digital                      £20
Registration of a charge                                                           Paper                        £24
Registration of a charge                                                           Digital                       £15
Voluntary strike off                                                                  Paper                        £44
Voluntary strike off                                                                  Digital                      £33
Reduction of share capital of a company under s644 CA06 (same day)      Digital (upload service)      £136
Reduction of share capital of a company under s644 CA06                         Paper                                     £33
Reduction of share capital of a company under s644 CA06                         Digital (upload service)       £33
Reduction of share capital of a company under s649 CA06 (same day)     Digital (upload service)       £136
Reduction of share capital of a company under s649 CA06                        Paper                                     £33
Reduction of share capital of a company under s649 CA06                       Digital (upload service)       £33
Administrative restoration                                                                               Paper                                    £468
Application to make an address unavailable for public inspection            Paper                                     £30

______________________________-

Employment rates 2024/25

New regime re employment for 2024/25

Direct taxes are paid directly by the taxpayer to the government. For individuals, the main direct taxes in the UK are income tax and National Insurance contributions. Indirect taxes are collected by another party – such as a retailer or a producer – and then paid to the government. The main indirect taxes in the UK are VAT and excise duties, charged on alcohol, tobacco, and road fuel.
This briefing sets out direct tax rates and principal tax allowances for the 2024/25 tax year. It describes the conditions necessary for eligibility for these tax allowances and provides a summary of the general tax position in straightforward cases.

This briefing deals with tax allowances, but not with cash benefits provided under the social security system, child tax credit or working tax credit.

Income tax
Income tax on earned income is charged at three rates: the basic rate, the higher rate and the additional rate.

For 2024/25 these three rates are 20%, 40% and 45% respectively.

Tax is charged on ‘taxable income’ at the basic 20% rate up to the basic rate limit, set at £37,700. Taxable income excludes personal allowances, which are the amount of money someone can receive without having to pay tax on it.

The higher 40% rate is charged on taxable income between the basic rate limit and the additional rate threshold, set at £125,140.

The additional 45% rate is charged on taxable income over £125,140.

All three tax rates and thresholds are unchanged from 2023/24.

Personal allowance
The personal allowance for income tax is set at £12,570 for 2024/25. Like the basic rate limit, the personal allowance has been fixed in value since 2021/22.

Marriage allowance
Married couples and civil partners may be entitled to claim the marriage allowance. Individuals whose income is insufficient to make full use of their personal allowance can transfer this unused fraction to their spouse or civil partner, up to a set amount.

Individuals cannot make use of this provision if their spouse or partner pays more than the basic rate of tax.

For 2024/25 the maximum that can be transferred is £1,260.

National Insurance contributions
The main rate of National Insurance contributions (NICs) for employees is cut by two percentage points from 10% to 8% from 6 April 2024.

The main rate is charged on all earnings between the primary threshold and the upper earnings limit. This follows a previous rate cut from 12% to 10%, announced in the 2023 Autumn Statement, which took effect from 6 January 2024. Employee earnings above the upper earnings limit are charged at 2%. This rate is unchanged for 2024/25.

The rate of NICs for employers is set at 13.8% on earnings above the secondary threshold. This rate is unchanged for 2024/25.

The primary threshold for employees is £242 per week for 2024/25. The upper earnings limit is set at £967 per week for 2024/25, so that it remains aligned with the income tax higher rate threshold. The secondary threshold is set at £175 per week for 2024/25. All three thresholds are unchanged from 2023/24.

_____________________