Sage One Help

Legislation changes for 2014/2015

Sage One Payroll complies with all legislation changes introduced for the 2014/15 tax year.

All the relevant software changes are made automatically. So don’t worry, you don’t need do anything to stay up to date.


Tax rates and bands for 2014/15

The tax rates and bands for the 2014/15 tax year come into effect from 6 April 2014:

From (£) To (£) Rate
Basic Rate 0.01 31,865 20%
Higher Rate 31,866 150,000 40%
Additional Rate 150,000.01 N/A 45%

In addition, the personal allowance is increased to £10,000 for the 2014/15 tax year.
 

In the unlikely event that the tax rates or bands change during the course of the tax year, we’ll let you know and update Sage One Payroll accordingly.


L tax codes


For employees on an L tax code, the number in the tax code increases by 56 at the beginning of the 2014/15 tax year.

So, for example, the 944L tax code in the 2013/14 tax year changes to 1000L in the 2014/15 tax year.


NI thresholds


NI rates remain unchanged in the 2014/15 tax year, but the following thresholds apply:

Earnings Limit Weekly (£) Monthly (£) Yearly (£)
Lower Earnings Limit (LEL) 111.00 481.00 5,772.00
Secondary Threshold (ST) (Employer threshold only) 153.00 663.00 7,956.00
Primary Threshold (PT) 153.00 663.00 7,956.00
Upper Accrual Point (UAP) 770.00 3337.00 40,040.00
Upper Earnings Limit (UEL) 805.00 3489.00 41,865.00


For the latest HMRC information on NI thresholds and employer/employee contributions, see http://www.hmrc.gov.uk/payerti/forms-updates/rates-thresholds.htm#1



Statutory payment rates and thresholds


Statutory pay rates are updated as follows at the beginning of the 2014/15 tax year:

Payment Weekly Rate (£)
Statutory Adoption Pay 138.18
Statutory Maternity Pay 138.18
Ordinary Statutory Paternity Pay 138.18
Additional Statutory Paternity Pay 138.18
Statutory Sick Pay 87.55


For qualifying employers, NI compensation for small employers’ relief remains at 3%.


 


NI employment allowance


In the 2014/15 tax year, qualifying employers paying employer Class 1 NI contributions on employee or director earnings are entitled to a £2,000 employment allowance to offset these contributions.

The £2,000 allowance is applied in full to the contributions each month or quarter until it is exhausted.

Sage One Payroll handles the allowance claim automatically. All you need to do is specify whether you qualify for it.



Online submission changes

NI holiday value no longer recorded

The NI holiday scheme for regional employers ended on 5 September 2013.

Under this scheme, certain new businesses could qualify for a reduction of up to £5,000 in the employer NI contributions they made for each of the first ten employees they hired.

Because the scheme is abolished, in the 2014/15 tax year Sage One Payroll no longer records a NI holiday value or includes this field in EPS submissions.


Earlier Year Update (EYU)

If you need to make corrections to the 2013/14 payroll after you’ve submitted the final FPS for the 2013/14 tax year, you must report these corrections to HMRC using the new Earlier Year Update (EYU) online submission.

From 20 April 2014, HMRC accepts EYU submissions for corrections to 2013/14 payroll.

So, for example, if you submitted your final FPS on April 10, and then made corrections to 2013/14 payroll on April 15, you’ll need to wait until April 20 to report the corrections to HMRC using an EYU.
 
The official deadline for EYU submissions for 2013/14 is 19 May 2014.

However, to facilitate the introduction of this new submission type, HMRC has stated that late submission will not incur fines or penalties until October 2014.

To submit an EYU

If you make corrections to a pay run in the completed 2013/14 tax year after you have submitted the final FPS, the RTI panel in the Summary screen informs you that an EYU submission is required.

  • 1. In the RTI panel, click Earlier Year Update.
  • 2. The EYU panel in the Year End Reports screen tells you whether it’s time yet to make the EYU submission.

If the date is 20 April or later, the Submit EYU button is available.

Click Submit EYU to make the submission.


Student loans


From 6 April 2014, the student loan repayment threshold increases as follows:

Period New Threshold
Weekly £325.19
Monthly £1,409.16
Annual £16,910.00

Usually, an employee contributes 9% of their income over the threshold to make student loan repayments.


Abolition of percentage threshold scheme


To provide an incentive to employers to take a proactive approach to sickness absence management, the Government intends to introduce the Health and Work Service (HWS) by the end of 2014.

This new service will provide health and work advice to employers, employees, and general practitioners.

The HWS is funded through the abolition of the Statutory Sick Pay (SSP) percentage threshold scheme, under which employers could claim back a portion of their sick pay costs through an NI rebate.

The abolition takes effect at the start of the 2014/15 tax year.

Pending the introduction of the HWS, employer support for managing sickness absences is available from sources such as:


New contracted weekly hours band


In the 2013/14 tax year, there were four Contracted Weekly Hours options that you could choose in an employee record.

In the 2014/15 tax year, there are five Contracted Weekly Hours options.

The old 16 – 30 band has been split into two new bands:

  • 16 – 23.99
  • 24 – 30

The default selection is 16 – 23.99.

The employee’s contracted weekly hours band is reported in the FPS. So it’s important to check that the correct band is chosen for each employee.


Refund options for a negative P32 amount


If the P32/EPS wizard displays a negative P32 amount, you can now choose how you receive the refund.

The wizard’s first screen includes the HMRC Refunds panel. Here you can specify your preferred refund method.

You can choose either:

  • Bank Transfer

    If you choose this option, you are prompted to specify bank details that will be included in the EPS submission.

    HMRC will use these bank details to pay you the refund.

    However, you need to contact HMRC yourself to inform them that you want to receive the refund in this way. Otherwise they will not use the bank details.
  • P32 Adjustment

    If you choose this option, an EPS will not be submitted to HMRC unless the statutory payment recovery values specified in the second step of the wizard mean an EPS is required.

    The refund value will be displayed on the P32 report relating to the next P32 period, and will offset your overall liability in that P32 period.

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