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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 following changes 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 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

If an employee has a baby due on or after 5 April 2015, or adopts a child on or after this date, they might be entitled to shared parental leave (SPL) and shared parental pay (ShPP).

This is a new entitlement which means that partners can choose to share the leave that was previously only available as maternity or adoption leave, and receive a statutory payment for this time off work. If the employee is eligible, and if their partner ended maternity leave or adoption leave early, the remaining leave is available to take as SPL. They may also be eligible to be paid for this.

Shared parental leave (SPL)

To be eligible for shared parental leave:

  • The employee must have a baby due on or after 5 April 2015, or adopt a child on or after 5 April 2015.
  • The employee must share care of the child with their partner, joint adopter or the child’s other parent.
  • The employee or their partner must be eligible for maternity pay or leave, maternity allowance or adoption pay or leave.
Shared parental pay (ShPP)

To be eligible for shared parental pay the employee must:

  • Qualify for statutory maternity pay (SMP) or statutory adoption pay (SAP)
    or
  • Qualify for statutory paternity pay (SPP) or statutory paternity pay (adoption) (SPP) and have a partner who qualifies for SMP, maternity allowance (MA) or SAP.

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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