HMRC PAYE update 95

HMRC have provided a further informal update on PAYE related matters for sharing. The update covers Statutory Payment rates, the Small Employer's Compensation Rate, Percentage Threshold Scheme for 2012-13, 2011/12 PAYE Payment Booklet, RTI and the abolition of contracting-out on a Defined Contribution basis.

Statutory Payment rates, the Small Employer's Compensation Rate and Percentage Threshold Scheme for 2012-13 

Increase of Statutory Payment Rates from 2012-13

The Department for Work and Pensions have announced the statutory payment rates for 2012-13 as part of the Social Security Benefit Up-rating.

Statutory Maternity Pay - £135.45 per week
Ordinary Statutory Paternity Pay - £135.45 per week
Additional Statutory Paternity Pay - £135.45 per week
Statutory Adoption Pay - £135.45 per week
Statutory Sick Pay - £85.85 per week

Lower Earnings Limit - £107.00 per week

For employees earning £107.00 or more per week in 2012-13, the above rate of Statutory Maternity, Paternity and Adoption Pay will apply for complete pay weeks commencing on or after 1 April 2012 (the first Sunday in April), for Statutory Sick Pay this will apply from 6 April 2012.

Small Employers Compensation Rate and Percentage Threshold Scheme

Small employers i.e. employers with a total annual Class 1 National Insurance contributions (NICs) liability of £45,000 or less (same threshold as last year) get back all of the Statutory Maternity, Paternity and Adoption Pay they pay out plus an additional amount in compensation for the employer’s NICs due to be paid on those payments.

From 6 April 2012 the rate of the additional amount payable to small employers (generally referred to as the Compensation Rate) will remain at 3%.

From 6 April 2012 employers who do not qualify for full reimbursement plus the additional payment can recover 92% of the Statutory Payment paid to their employees. This is the same as the rate last year.

The threshold for recovery of Statutory Sick Pay under the Percentage Threshold Scheme remains unchanged from last year at 13 per cent.

The above rates are still subject to Parliamentary approval. Should Parliamentary approval not be obtained we will tell you of any further changes on our website before Sunday 1 April 2012.

Temporary Suspension of 2011/12 PAYE Payment Booklet 

Due to the selection process for PAYE Payment Booklets for 2012-13, we are temporarily unable to issue booklets for 2011-12.

We will be issuing new PAYE Payment Booklets for the year 2012-13 between 19 December 2011 and 31 March 2012. Please put the booklet somewhere safe until you need to use it from April 2012.

Due to the issue of these booklets, we temporarily cannot issue PAYE Payment Booklets for the tax year 2011-12. This will affect employers who request a 2011-12 booklet depending on which Accounts Office they are linked to.

Employers who have a payment to make by 19 December 2011 and/or 19 January 2012 who do not have a payslip (or payment booklet) should use the online facilities to make payment. Please make sure the cleared funds reach HMRC by no later than 22 December 2011 or 20 January 2012 (this is the last bank working day before the 22nd).

RTI – help to improve employer data quality 

We are offering help to employers to improve their PAYE (Pay As You Earn) information.

The abolition of contracting-out on a Defined Contribution basis 

The latest Countdown Bulletin regarding the abolition of contracting-out on a Defined Contribution basis has now been published.

2011 has been quite a year at HMRC with many successes and challenges for all of us. I hope these weekly updates have proved a helpful channel to keep you up to date about what is happening in HMRC.

The next update will be issued on 6 January 2012.

Technical Team

Posted in: News