A new tax year is underway, and this brings several changes that need implementing in your business finances in order to start 2017/2018 in the right year.
There are five main introductions you need to implement in this tax year. If any of these changes are not clear, an outsourced accounting service can make sure your business is in compliance with them.
1. Apprenticeship levy
If your wage bill is £3mor more, you need to pay the new apprenticeship levy at a rate of 0.5% of your salary bill. The money is to fund a scheme where employers can use vouchers to pay for approved apprenticeship courses.
2. Immigrant skills charge
If you employ a non-EU skilled migrant employee who has a tier-2 visa for work, you need to pay £1,000 a year for each of these employees. Small companies and charities can apply for lower rates and exemptions.
3. Gender pay gap reporting
If you have more than 250 staff, you will need to report on average hourly pay and bonuses for women and men employees so that any gender pay gaps are transparent.
4. Personal allowances and higher rate thresholds
The personal allowances for income tax and the thresholds for higher tax rates have changed. Employees do not pay any tax on a salary of £11,500 or less a year, compared to the previous amount of £11,000. The higher rate tax threshold has risen from £43,000 to £45,000 a year.
5. Salary sacrifice changes
If your company provides benefits in exchange for a lower salary (known as salary sacrifice), then there are some changes to the rules. Many benefits remain unchanged, such as childcare vouchers, bicycles, gym benefits, mobile phones and other technology.
Tax is removed on car parking and dining cards, but employees will continue to save on national insurance contributions.
Any cars for employees arranged before March 2017 will continue to save tax and national insurance until 2021. Any new car schemes for employees starting from April 2017 will only receive tax and national insurance benefits for cars with less than 75 CO2/Km emissions. These are mainly electric and hybrid vehicles.
Many of these changes are complicated to implement. Perhaps the best way to start the new tax year strongly is to talk to an accounting service that can do the job for you, allowing you to concentrate on running your business.