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Employment taxes: changes for the new tax year from 6 April 2017

Scottish Rate of Income Tax (SRIT). Icons 15

From 6 April 2017, there will be a change to the basic rate tax band for Scottish taxpayers. The Scottish rate of tax is 20% and is charged on income above £11,500, up to a Scottish basic rate limit of £43,000. >Find out more about the SRIT  >Scottish Budget 2016 key announcements

Download rate card: UK Business & Personal Tax Rates 2017-18

National Minimum Wage (NMW) and National Living Wage (NLW)

In previous years the National Minimum Wage (NMW) rate was increased in October. However, from this year the NMW and NLW (National Living Wage) will be aligned to increase in April each year.

The new compulsory rate of £7.50 for workers over 25 is also effective from 1 April 2017. >Further information

Apprenticeship Levy (for larger employers only)

HMRC is introducing an Apprenticeship Levy from 6 April 2017 which will affect larger employers (those whose annual payroll bill exceeds £3 million). The levy will also apply to connected companies, or charities, that in total have an annual payroll bill of £3 million.

Larger employers who are not connected to another company, or charity, will have an Apprenticeship Levy allowance of £15,000 per year. This allowance is deducted from the amount of Apprenticeship Levy that is due to be paid.

If you think your business, or charity, may be affected and you would like further information - please contact our Payroll Manager, This email address is being protected from spambots. You need JavaScript enabled to view it.. >Find our more about the Apprenticeship Levy

Restrictions on Salary Sacrifice and Flexible Benefit Schemes arrow people

From 6 April 2017, new rules will apply for certain benefits in kind where they are provided by salary sacrifice.

If any of the following applies to you then you need to know about the changes:

  • If you provide benefits to your employees in exchange for salary sacrifice; or
  • If you offer a flexibile benefit to your employees in exchange for salary sacrifice; or
  • If you provide flexible benefit packages where your employees can choose either a benefit or cash; or
  • If you provide benefits and also offer your employees a cash alternative.

Employers will not need to concern themselves with the new rules where employees are only sacrificing salary under the following arrangements: 

  • Pensions (including pension's advice).
  • Childcare Vouchers.
  • Cycle to Work (including accessories).
  • Cars with emissions at or under 75 CO2/km.

If however you are offering employee benefits over and above this, then you should read the new guidance >Salary Sacrifice changes

Flexible benefit schemes that only permit employees to purchase intangible benefits i.e. Annual Leave and Flexible Working will not change.

If you think you will be affected by the new rules and you would like further information - please contact our Payroll Manager, This email address is being protected from spambots. You need JavaScript enabled to view it..

Gender Pay Gap Reporting compliance

New gender pay gap regulations, due to come into force on 6 April 2017, will require private and voluntary sector organisations employing 250 or more people to publish details of their gender pay gap by 4 April 2018.

Employers should use payroll data from 2016/17 to create the first reports which will enable them to establish the information they are required to report.

If you think this may affect you or you would like more information then please contact our Payroll Manager, Jacqueline May. >Find out more about gender pay gap reporting

Tax-Free Childcare

Parents will soon be able to open a new childcare account (Tax-Free Childcare).

For every £8 a parent pays into their childcare account, the government will pay an extra £2. Parents can receive up to £2,000 government support per child per year towards their childcare costs.

HMRC are in the process of contacting parents to invite them to apply for Tax-Free Childcare. icon familyoffour

For further information on eligibility for Tax-Free Childcare and other information click here

Payment Reference Numbers

To ensure a payment is allocated to the correct tax month the payment to HMRC must be accompanied by a 13 character reference.

If payment is made with no reference number and is outside the 6th -22nd date range, HMRC is likely to allocate the payment to the incorrect tax period which will lead to a potential late payment notice. >Find out more

If you have employees who this will affect then please get in touch with your payroll team contact or send an email This email address is being protected from spambots. You need JavaScript enabled to view it., who will be happy to discuss this in detail with you.

Download a pdf: Employment Tax Changes for the New Tax Year 6 April 2017

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