April marks the new tax year, and with it, His Majesty’s Revenue and Customs (HMRC) are bringing in a host of new changes that will affect how employers pay their staff. It is vital to be across these and ready to incorporate them into your Payroll processes, to stay legally compliant. A strong Payroll software solution will save your team from time spent painstakingly making adjustments.
Advanced’s Payroll focuses on removing complexity from Payroll processes, incorporating new regulatory changes and automating as many of the calculations as possible. Let us worry about the legislation, letting your Payroll professionals complete value-adding tasks.
The below new features, introduced in response to HMRC changes, demonstrate how investing in Payroll can save hours of time worrying about compliance.
Already a customer? To easily enable the new functionalities, all on premise Payroll customers need to do is upgrade to the latest version. Hosted customers will see the upgrade occur automatically.
1. National Insurance (NI)
There are four new National insurance letters to support Investment Zones. The new NI letters are N, E, K and D. You can see a full list of the 2024/25 rates here.
The changes to NI are incorporated in the latest Payroll upgrade from Advanced, so if you are within an Investment Zone the new NI letters will be available.
There has been a change to the main rate of Primary (Employee) Class 1 NICs for earnings paid on or after 6th April 2024 as announced in the Spring Budget on 6th March 2024. Despite the short notice period we have worked to ensure that this change has been included in the year-end release.
2. New rolled-up holiday pay
Irregular and part-time workers can now access rolled-up holiday pay - where employers can add an additional amount of holiday pay to each payslip instead of paying it specifically when a worker takes annual leave. This is assigned as pay covering 12.07 per cent of the total pay during a pay period. Read more on the pay reforms in our dedicated blog, here.
This change is now easy to calculate in Payroll, with 12.07 per cent rolled-up holiday pay set as the default. If you try to input a lower percentage, the system will issue a warning, helping you stay legal and compliant. You can also adjust the percentage easily if you are offering above the statutory pay.
There is a new holiday tab in the employee record which includes an option for rolled-up holiday pay, if you select Yes on the user profile then this new pay rate will be automatically added.
3. Bacs hash no longer required
Previously, HMRC required a Bacs hash code on full payment submission, and this was randomly generated by Payroll. However, now it is no longer required, and with the new update Payroll will no longer generate this code.
4. Paternity leave
Fathers can now take their two weeks of paternity leave in two separate blocks. Read more about the changes in our dedicated blog. In Payroll, an extra set of input boxes has been added, allowing managers to adjust pay for fathers taking advantage of this new policy:
5. Increase in national living wage and minimum wage
The National Living Wage (NLW) increases on 1 April. The main change is the lowering of the age, meaning employees aged 21 and over will need to be paid the NLW of £11.44. This means that the minimum wage for younger employees has also increased. These changes will be supported in Payroll, meaning if you accidentally set pay as lower you will receive a warning and be unable to continue.
6. Rates for PAYE
Rates for PAYE for Wales and the rest of the UK (England and Northern Ireland) remain the same. Scotland has introduced a new Advanced tax band between the Intermediate and Higher brackets. The rate for this new tax band is 45 per cent. Additionally the Higher bracket rate has been increased to 48 per cent. This is incorporated into Payroll.
Consider Payroll as a robust, intuitive software solution designed to simplify Payroll management. It offers detailed payslip generation, supports multiple pay schedules, and ensures adherence to HMRC regulations.