Do you or your business employ any staff aged 21 or under? If so, we have good news for you. Reductions in National Insurance (NI) contributions for your 21-year-old and younger staff took effect at the start of this tax year.
This was introduced by the Government to encourage businesses to employ more young people as well as to stimulate growth in the UK economy.
If you already have employees that are under 21, does your current payroll system highlight these employees to you? If it doesn’t, that employee’s record will not change, meaning that you will still be paying the old Employer’s NI charges. Don’t expect HMRC to check this for you their side; they won’t!
Here are two examples of the NI savings this change gives to employers:
- An employee under 21, earning £12000 per year would now save the employer £500 in NI contributions.
- An employee under 21, earning £16000 would double that saving to £1000.
These changes are worth knowing and worth getting right, as it will improve your business’s profit margin. However, as with anything from HMRC, the devil is in the detail. The requirements, understanding, reporting and recording are not straightforward but they can be found on the HMRC website.
However, if you really can’t face the 100 pages in the link above, just give The Pay Pod a call today and we can take the headache away; we have already read it and are fully equipped to run your payroll in a cost-effective yet compliant fashion, ensuring that you get the maximum benefit from these new and any future allowances.
PLEASE NOTE: This allowance is restricted to earnings of up to £813 per week.
The Pay Pod can manage your payroll and auto-enrolment allowing you to manage your business.
For further information and friendly advice, contact us today.