Owner Kate Upcraft Consultancy Ltd
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Payroll: What we know for 2020/21

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The 2020 Budget is still five weeks away, but the NIC rates and thresholds have now been announced along with key details for other payroll deductions, as Kate Upcraft explains.

4th Feb 2020
Owner Kate Upcraft Consultancy Ltd
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It’s been a tense few weeks for payroll software developers and tax agents who are trying to prepare employers for the new tax year. The software development cycle for the last 18 years has worked on the basis of having key pieces of tax information announced as part of an autumn statement, rather than being left to a spring budget.

This year was very different. When parliament was dissolved in November 2019, the civil service went into a period of election purdah until mid-December which prevented any discussions about next tax year taking place with policymakers.

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Replies (8)

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By Charlie Carne
05th Feb 2020 11:29

When I heard that the NIC threshold was rising to £9,500, I welcomed this as an indication of government policy to align NIC and income tax personal allowance (PA) thresholds by the end of this parliament (at 12,500 or whatever higher level the PA reaches by then). As the UEL has been aligned for some years with the level at which higher rate income tax applies, we would soon have one set of lower and upper limits for both tax and NI, which goes a very long way towards the goal desired by many of us to eventually merge tax and NI. I am, therefore, very disappointed to read in this article that the primary and secondary NI thresholds are now being separated again. This is a retrograde step and adds unnecessary complication to PAYE matters.

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By paulfieldcrest
05th Feb 2020 16:10

You and I, and the rest of the thinking population might see it that way, Charlie.

Big Dom and Little Boris wouldn't get it if you kept them in after school for a week writing it out fify thousand times......

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By Ian McTernan CTA
05th Feb 2020 16:31

But Paul, blaming Boris and Dom for this is so far wide of the mark it makes you sound like a Corbynite.

HMRC and the Treasury come up with these things. The politician said £9,500 for the individual so HMRC only do it for the individual, creating yet more complexity but trying to scrape every penny off employers that they can.

HMRC and the Treasury don't care how complicated they make things.

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By paulfieldcrest
05th Feb 2020 17:12

No, definitely not a Corbinyte - he's the reason we don't have an Opposition any more (which is a Very Bad Thing).

But isn't the Government ultimately responsible for implementing the recommendations of the Treasury and HMRC?

And isn't this Government led by an unelected bureaucrat puppeteer with one hand working Little Bo and the other Little Saj - both of them dancing to his merry little tune?

Sorry, I've become somewhat cynical over the course of the last three or four years. Hard to put my finger on why this is - probably old age creeeping up on me.

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By k743snx
05th Feb 2020 16:31

Some people have short memories.

Budget Day had been held in early spring for years. Then as recently as 2018 some bright spark swapped the Spring Budget and the Autumn statement.

I grant the December election may have caused a few hiccups, but we seemed to manage in the past.

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By Ian McTernan CTA
05th Feb 2020 16:34

So just to make it clear: if we continue to pay people above the LEL and below the £8,788 then they will get a year's state pension entitlement without incurring ERNIC. Correct?

Only HMRC could think that not raising the employer threshold at the same time was a good idea...

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By AndrewV12
17th Feb 2020 12:25

Extract above
'The Employment Allowance will be withdrawn for employers (and connected employers) who have an employer national insurance liability of £100,000 or more for 2019/20.'

This is an important allowance, even though the Government quote it a lot, there are many bushiness who are excluded from it (what they don't tell you).

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By Gone Sailing
18th Mar 2020 18:48

I was a bit surprised, when they were talking about raising Class 4 rate last year that they put the threshold up in line with the PT not the ST. They could have pocketed a few extra bob there.

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