NI thresholds mean nearly all tax year pieces in place

On Friday 31st it seemed like our pleas as employer and agent representatives finally paid off when the Government announced the NI rates and thresholds for 2020/21. Since Christmas there has been furious lobbying behind the scenes to make the point that we wouldn’t be able to pay people for April unless NI details were published ahead of the Budget. Some April payrolls are run at the end of February for payment on 6th April, so a Budget on 11th March was simply way too late.

Those friends of mine with long memories dredged up recollections of changing NI mid-tax year back in 1989 and we haven’t done that since, which, given NI isn’t cumulative, is a relief. It now seems that we should be able to get the software changes in place in time and the Government should be very grateful to the payroll software industry for turning on a sixpence yet again, when politics looked like it would conspire to prevent us paying employees correctly.

The details you need are as follows:

Pay frequency

LEL PT ST UEL AUST UST
 Weekly £120 £183 £169 £962 £962 £962
 Fortnightly £240 £366 £338 £1,924 £1,924 £1,924
 Four-weekly £480 £731 £676 £3,847 £3,847 £3,847
 Monthly £520 £792 £732 £4,167 £4,167 £4,167
 Yearly £6,240 £9,500 £8,788 £50,000 £50,000 £50,000

 

There are no changes to any of the percentages or table letters.

Remember the introduction of Class 1A (employer only) NI on termination payments over £30,000 is not handled via a table letter from 6th April, it requires the employer to complete a manual calculation and enter that in the FPS.

The next question is of course will the auto-enrolment thresholds be aligned with the NI thresholds as currently? Let’s hope we find that out quickly too as that will leave just tax for Budget day. It was 2002 when we last rolled on tax rates and thresholds until week 6 and changed them in week 7, but if we’re still aligning the UEL with the 40% threshold, and we were told no tax rises and a £12,500 personal allowance for 2020/21, then maybe we’re just about there.