There are 4 essential tasks that a bookkeeper or payroll agent needs to take ahead of 06 April 2024, as this information is essential for accurate payroll processing.
The Basic Earnings Assessment
This is necessary for applying the correct Income Tax and National Insurance relief on Employer-Supported Childcare (ESC) arrangements such as the childcare voucher.
Where an employee joined an arrangement between 06 April 2011 and 04 October 2018, the employer is required to perform the Basic Earnings Assessment to assess their anticipated earnings in the coming tax year, i.e. 2024/25. This is because, for these entrants, relief is not automatically £2,915 per annum (£55 per week / £243 per month) but might have to be tapered down.
The Employment Allowance
This is the annual £5,000 Allowance that can be used against an employers’ Class 1 (payroll) National Insurance Contributions (NICs) liability. However, there are two things to remember:
1. There are eligibility criteria and
2. The Allowance must be claimed each tax year via payroll software. Entitlement in one year does not carry forward to the next, likewise with non-entitlement
It could be that a client was entitled in 2023/24 because they met the eligibility criteria. However, maybe their circumstances have changed and they are no eligible in 2024/25. This can apply in reverse.
ICB advises that bookkeepers check with each client.
The Apprenticeship Levy Allowance
This is the £15,000 Allowance, unchanged from tax year 2023/24 that can be used to offset any Apprenticeship Levy that mat be due. Unlike the Employment Allowance which can only be allocated against one PAYE reference, the Apprenticeship Levy Allowance can be split between PAYE references for the same employer, for example two monthly payrolls or a monthly and weekly payroll.
It could be that the client has allocated some of the £15,000 Allowance to one PAYE scheme and some to another and, maybe, they want to change this allocation in the following tax year.
ICB advises that bookkeepers check with their clients, confirming the current allocation and requesting agreement or any amendments.
Small Employer’s Relief
Small Employer’s Relief is valuable for small employers, i.e. those with gross National Insurance of £45,000 in the previous tax year. Being flagged in the payroll system as a small employer means that statutory payments (SMP, SPP etc) can be reclaimed at 103% rather than the usual 92%.
However, eligibility in 2023/24 does not mean automatic eligibility in tax year 2024/25.
ICB advises that bookkeepers check their payroll systems to look at the value of gross National Insurance Contributions in 2023/24 and advises each client. Plus, if there is eligibility, ensure the relevant small employer marker is flagged in the payroll software.
