Coal face challenges for the payroll professional

Samantha Mann shares the knowledge that is needed to ensure the successful delivery of a timely and accurate payroll service for the 2019-20 tax year

Payroll software delivers almost all of the solutions we need, which includes the annual upgrade that takes account of increases in rates and thresholds together with new policy delivery. However, software is only part of the partnership that is needed to ensure the successful delivery of a timely and accurate payroll service.

Knowledge and skills of the payroll professional is equally – if not more – important. It is with this thought in mind that we turn our attention to the 2019-20 tax year.

National Minimum Wage rate increases and future changes

The Chancellor declared that Government were in full agreement with the recommendations made by the Low Pay Commission and so for pay reference periods that begin on or after 1 April 2019 the rates will be £8.21 per hour for a worker aged over 25; £7.70 per hour for a worker aged 21 to 24; £6.15 per hour for a worker aged 18 to 20; £4.35 per hour for a worker aged 16 to 17; and £3.90 per hour for the Apprentice rate.

The accommodation offset will be £7.55 per day.

Also from April 2019 the requirement for payslips to detail hours worked where work is time work (as opposed to being salaried hours work, output work or unmeasured work) and to support this change the Department for Business, Energy & Industrial Strategy (BEIS) has published a simple employer guide aimed at providing a small number of examples to help demonstrate the principles behind the change.

At the same time the right to be supplied with a payslip is to be extended to include all workers – and not just employees.

On 1 March the BEIS consultation on NMW Salaried workers and salary sacrifice closed and we are optimistic that this consultation will provide outcomes that improve the operation of minimum wage for employers. We are also hopeful that this is the beginning of a conversation that will see widespread updating of the NMW Regulations that make them fit for purpose for a 21st century workplace.

Automatic enrolment changes

The final phase of the roll out of mandatory workplace pension saving is due from 6 April 2019. As with previous rollout stages the Pensions Regulator (TPR) recommended that the employer and payroll professionals allow sufficient time to ensure that any increase in contribution is processed in line with scheme rules.

The total contribution made must be eight per cent of qualifying earnings which would require at least a three per cent contribution from the employer leaving the employee top up to be five per cent. Where an employer decides to cover the total minimum contribution of eight per cent employees would not need to pay anything.

Every pension scheme is different and so it remains important to review the scheme rules to be certain which pay elements are included.
Student loans

From 6 April Postgraduate Loans (PGL) will come into repayment which will impact employer pay processes. The rate of deduction will be six per cent of NIC earnings in excess of the threshold of £21,000.

The deduction will be made concurrently alongside any existing student loans deductions that are being made (under plan one or plan two).

The starter checklist has been updated to reflect additional statements for the employee to complete and the P60 has also been amended to enable separate reporting of PGL deductions.

Settled status and the impact on Right to Work checks

The clock continues to tick towards the UK exit from the European Union and the arguments continue to rage. As I write I use information that is known ‘at the moment’ in a bid to consider how the exit will impact workers when all the dust settles.

Employees and their family members who are EU citizens may be able to apply to the EU Settlement Scheme to continue living in the UK after 30 June 2021.

Guidance exists on GOV.UK together with an online application process for EU citizens now, and if this application route is used, paper records and evidence will still need to be submitted in order to complete the process.

An app has been created however, that works on android devices and which removes the need to submit paper evidence and thus speeds up the application process. No plans exist for the app to be made available to Apple devices.

EEA citizens can now also be able to apply for settled status.

The deadline for applications will be 30 June 2021 unless the UK leaves without a deal in which case the deadline will be 31 December 2020.

No action is required at this stage for employers however when fully operational the advantage of the scheme will be that it will enable a fully automated process to be carried out by employers seeking to establish their Statutory excuse with Right to Work checks.

As when carrying out Right to Work checks, employers should take care, when informing their workforce, not to be seen to be discriminating by only focussing on employees they think may be affected.

Income Tax Rates and Thresholds

No update that considers coal face challenges for payroll would be complete without a nod in the direction of tax rates and thresholds and this is an area that directly focusses our attention on the variances that now exist across the UK as a result of devolved measures.

The personal allowance across the UK will be £12,500 resulting in an emergency tax code of 1250L.

England & Northern Ireland

Basic rate        20%     £1 – 37,500
Higher rate        40%     £37,501 – 150,000
Additional rate     45%      >£150,001

Higher rate threshold is £50,000.


April 2019 sees the introduction of the Welsh rate of Income tax and for the time being at least, the Welsh Assembly have committed to matching the rates in England and Northern Ireland at:

Basic rate        20%     £1 – 37,500
Higher rate        40%     £37,501 – 150,000
Additional rate        45%    > £150,001

Higher rate threshold is £50,000.

Welsh resident taxpayers employed, or in receipt of a pension, will have a tax code beginning with C and HMRC will issue appropriate tax code notices to employers in the normal manner based on the information that they hold about the employee.


The Scottish Parliament recently ratified their rates to be applied from 6 April 2019:

Starter rate        19%     £1 – 2,049
Basic rate        20%     £2,050 – 12,444
Intermediate rate    21%     £12,445 – 30,930
Higher rate        41%     £30,931 – 150,000
Top rate        46%     > £150,001

Higher rate threshold is £43,430.


There is always more we could discuss if word count and your patience was unlimited, instead the CIPP policy team provide a daily news feed to highlight current news and changes afoot which can be viewed at

Samantha Mann is CIPP Senior policy and resource officer

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