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Legislation changes for 2015/2016 tax year

With Sage One Payroll, you can be confident that your service is always up to date with the latest legislation. You don’t need to do anything, as it automatically updates with the rates and thresholds for the new tax year.

Tax rates and bands

Rate From (£) To (£) Rate
Basic Rate 0.01 31,785 20%
Higher Rate 31,785.01 150,000 40%
Additional Rate 150,000.01 N/A 45%

NI thresholds

Earnings Limit Weekly (£) Monthly (£) Yearly (£)
Lower Earnings Limit (LEL) 112.00 486.00 5,824.00
Primary Threshold (PT) 155.00 672.00 8,060.00
Secondary Threshold (ST) Employer threshold only 156.00 676.00 8,112.00
Upper Accrual Point (UAP) 770.00 3,337.00 40,040.00
Upper Earnings Limit (UEL) 815.00 3,532.00 42,385.00

For the latest HMRC information on NI thresholds and employer and employee contributions, please visit https://www.gov.uk/rates-and-thresholds-for-employers-2015-to-2016

Tax codes

L tax code

Tax codes with an L suffix increase by 60. For example, the 1000L tax code in the 2014/2015 tax year changes to 1060L in the 2015/2016 tax year.

Transferable tax allowance

There are new M and N tax codes to deal with Transferable tax allowance for married couples and civil partners.

For further information, please visit https://www.gov.uk/government/publications/transferable-tax-allowances-for-married-couples-and-civil-partners

NI categories for employees under the age of 21

Every employer with employees under the age of 21 are no longer required to pay Class 1 secondary NI contributions (NICs ) on earnings up to the UEL, for those employees.

A warning message appears if you process your pay run for any employees whose NI category is not correct for their age. To correct this you must click on the relevant employee in the Edit Pay stage of your pay run and change their NI category.

 
If you have employees under the age of 21, those on category A change to M and those on J change to Z.

To update an employee’s NI category
  • 1. Employees tab > click the employee > Edit.
  • 2. Change category A to M or J to Z.
  • 3. Click Save.

Statutory payment rates and thresholds

Payment Weekly Rate (£)
Statutory Adoption Pay 139.58
Statutory Maternity Pay 139.58
Ordinary Statutory Paternity Pay 139.58
Additional Statutory Paternity Pay 139.58
Statutory Sick Pay 88.45

Shared parental leave and pay

Shared parental leave (SPL) and pay (ShPP) is a new entitlement that allows parents to share the leave that was previously only available as maternity or adoption leave, and receive a statutory payment for this time off work.

For full information about eligibility, please visit https://www.gov.uk/shared-parental-leave-and-pay-employer-guide/overview

NI employment allowance

Qualifying employers paying employer Class 1 NI contributions on employee or director earnings are still entitled to a £2,000 employment allowance, to offset these contributions.

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