Last week, the Chancellor of the Exchequer, Philip Hammond, delivered his Autumn Budget speech. From a payroll perspective, there were no big surprises.
He announced that the tax-free personal allowance will rise to £11,850 in April 2018 and that the higher-rate tax threshold will increase to £46,350. He also accepted the Low Pay Commission’s recommended increases to the National Minimum Wage and the National Living Wage, from April 2018.
To implement the personal allowance rise, HMRC normally issues a notice P9X, instructing employers to increase their employees’ tax codes in April. Some payroll systems, including ours, change the tax codes automatically so customers don’t need to do anything. Our system will also apply the new tax threshold for all payslips that are dated in the new tax year.
Mr Hammond also announced some changes to Universal Credit. Although Universal Credit doesn’t directly affect payroll, it may affect your employees and it relies upon the RTI data that is sent from your payroll to HMRC. He also announced more funding for teaching maths, which, in the future, may help employees to understand their payslips.
This is not a full summary of the budget, because I’ve just chosen the topics with a connection to payroll. For the other changes, and more details on the above, you can read the speech on gov.uk.
Some changes that apply from April weren’t mentioned in the budget because they had previously been announced. These include increases to the student loan threshold, which our system will apply automatically. There will also be a significant increase to the minimum contributions for workplace pensions. You can read about this on the regulator’s website.