2019/20 PAYE Year End Updates
As you will be aware the new tax year is fast approaching, as ever HMRC have made a number of changes to the existing systems. In this email we will address the following issues:
- Directors’ salaries for 2019/20
- Statutory Sick Pay (SSP) Rates for 2019/20
- 2019/20 RTI Submissions
- CIS Suffered/Deducted
- 2018/19 PAYE Year End
- 2018/19 P11d Information
- HMRC Bank Accounts – PAYE Payments 2019/20
- Tax and National Insurance Thresholds 2019/20
- Minimum Wage Increases
- Automatic Enrolment Minimum Contributions Increases
Directors Salaries for 2019/20
As the personal allowance has increased along with the National Insurance rates the amount directors/employees can be paid before tax and national insurance is due, assuming you have a standard tax code, has increased to £8,632 per annum which breaks down to £719.33 per month or £166 per week.
If you are a director currently being paid £8,424 per annum (£702 per month/£162 per week) we will automatically update your salary in 2018/19 unless you instruct us otherwise.
If you elect to currently take £988.33 so you pay national insurance to utilise the full tax threshold, we will increase your salary to £1,041.67 per month.
If you are paid any other amount and wish for your salary to be changed to this amount please let payroll know.
Statutory Sick Pay (SSP) Rates in 2019/20
The rules for Statutory Sick Pay remain the same for 2019/20.
However, the rate of Statutory Sick Pay will increase for 2019/20. The SSP rate will increase from £92.05 per week in 2018/19 to £94.25 per week in 2019/20.
To calculate the amount of SSP you need to pay your employee please use the following link to the HMRC calculator tool: https://www.gov.uk/calculate-statutory-sick-pay
2019/20 RTI Submissions
We remind you that in order for your payroll submission to be treated as on time it needs to be filed on or before the pay date; for example, if you send in your wages for 28th February on 1st March this is treated as a late submission.
HMRC have now begun issuing penalties for late submission.
HMRC are also continuing to chase PAYE contributions which have not been paid on time. It is therefore important to make payment on time if you do not want HMRC’s debt enforcement to be on your case.
As you should be aware CIS needs to be reported to HMRC on a monthly basis. Either through the filing of CIS monthly returns if you have subcontractors or through the payroll submission if you are a Limited Company who has suffered CIS. Sole Traders who suffer CIS will continue to reclaim it on their Self Assessment Tax Returns.
If we file your CIS monthly returns please ensure you are providing the information as soon after the 6th of each month as possible and definitely before the 19th as HMRC are particularly hot on late filing in this area. If you file your own monthly returns please send us a summary at the end of the PAYE year of the CIS you have deducted each month during that year.
For Limited Companies who suffer CIS we need details of any deductions again between the 6th and the 19th of each month for the preceding month so we can file the information with HMRC on a monthly basis. It is particularly important that we have all details of CIS suffered between 6th April 2018 and 5th April 2019 by 12th April 2020 as the payroll final submission for the year is your only opportunity to reclaim this CIS.
2018/19 PAYE Year End
RTI filing deadlines state yearends have to be filed by the 19th April 2019 which considerably shortens the time available to prepare and file the year ends opposed to the timeframe under the old payroll system. It is therefore extremely important that you get your information to us as soon as possible. If you are a limited company and have CIS deducted from your sales we will also need this information in advance of 19th April so we can file it on your behalf and get HMRC to process any repayment claims as early as possible.
Failure to file on time could result in HMRC issuing penalties.
The deadline for issuing P60’s to your employees is 31st May. We will send them to you before this date as long as we have all the information from you to complete them.
2018/19 P11D Information
The deadline for filing P11D’s with HMRC is 6th July. If you provide your employees with benefits please let us have the relevant information by 31st May so we can prepare the P11D’s on your behalf. The associated Class 1a National Insurance Contributions will need to be paid to HMRC by 19th July. As ever, late submissions and payments to HMRC can be subject to penalties and interest.
HMRC Bank Accounts – PAYE Payments for 2019/20
As per last year, all PAYE payments in the 2019/20 year should be made to the following bank account.
Account Name: HMRC Cumbernauld
Account Number: 12001039
Sort Code: 08 32 10
Reference: See table below
|Payment for the month or quarter ended||PAYE month or quarter number||How to show your reference on your payment|
|5 May||M01||Your Accounts Office reference followed by 2001|
|5 Jun||M02||Your Accounts Office reference followed by 2002|
|5 Jul||M03/Q1||Your Accounts Office reference followed by 2003|
|5 Aug||M04||Your Accounts Office reference followed by 2004|
|5 Sep||M05||Your Accounts Office Reference followed by 2005|
|5 Oct||M06/Q2||Your Accounts Office Reference followed by 2006|
|5 Nov||M07||Your Accounts Office Reference followed by 2007|
|5 Dec||M08||Your Accounts Office Reference followed by 2008|
|5 Jan||M09/Q3||Your Accounts Office Reference followed by 2009|
|5 Feb||M10||Your Accounts Office Reference followed by 2010|
|5 Mar||M11||Your Accounts Office Reference followed by 2011|
|5 Apr||M12/Q4||Your Accounts Office Reference followed by 2012|
Failure to use the correct reference or bank account creates additional work because if HMRC’s automated system cannot automatically match the payment they will write to the employer chasing payment, even though the payment has been made.
Tax and National Insurance Thresholds 2019/20
For a comprehensive list of Tax and National Insurance thresholds please visit the government website: https://www.gov.uk/guidance/rates-and-thresholds-for-employers-2019-to-2020
Minimum Wage Increases 2019/20
The National Minimum Wage and National Living Wage rates will change from April. Please see below the changes in rates:
|Year||25 and over||21 to 24||18 to 20||Under 18||Apprentice|
|April 2018 (current rate)||£7.83||£7.38||£5.90||£4.20||£3.70|
Please inform us if any of your employees are affected. If the employee is paid a fixed amount not broken down by hours we will not know if they are paid the minimum wage and therefore will not know an increase is required unless we are advised.
For further information, please visit: https://www.gov.uk/national-minimum-wage-rates
Pension Auto Enrolment Minimum Contribution Increase
From 6 April 2019, the total minimum contribution including employer and employee payments must be at least 8% of qualifying earnings. You, the employer, must pay a minimum of 3%, with your employees making up the remaining 5%. Please see below the change in rates:
|Date effective||Total minimum contribution||Employer minimum contribution||Staff contribute the remainder|
|April 2018 (current rates)||5%||2%||Up to 3%|
|6 April 2019||8%||3%||Up to 5%|
We will automatically increase the contributions made by your employees on their first payslip after 6 April 2019.