New tax year – are you ready?

As we start the new tax year there are a few things that small businesses need to check that they have done, and know about changes that have come in:



You need to ensure that you have completed the payroll year end for 2016/17 correctly. This means making sure you do a final payment submission (FPS) to HMRC so they know you have no more pay periods. They will then check the total tax due and compare the payments received. You will need to issue P60’s to your staff so they can see their total earnings for 2016/17.


Roll forward into the New Year and don’t forget to check all your details for your employees are still correct.


Apprenticeship Levy:

This new liability will be charged at a rate of 0.5% if a business offers apprenticeship schemes and their tax bill is over the threshold. The Apprenticeship Levy amount can be added on the EPS before submitting it to HMRC.


New living wage/Minimum wage rates

The rates change every April

Age                  Rate


25 and over       £7.50 ph

21 to 24            £7.05 ph

18 to 20            £5.60 ph

Under 18           £4.05 ph

Apprentice        £3.50 ph


A top tip to ensure you don’t fall foul of minimum wage rules: Don’t deduct repayments of loans from the pay of minimum wage employees. HMRC look at the net pay received by employees and work backwards by adding on the relevant PAYE and NIC to see if the Gross pay is in line with the correct hourly rates. Sometimes deducting repayments from loans can mean that the reworked Gross pay is actually below the minimum level. If it is you can be given a hefty fine! This has happened to a number of organisations recently, all of which were named and shamed. To avoid this issue, agree another way to deal with the repayment of any loan advanced to an employee.


Trying to remember all the changes that occur each year and understanding the detail involved can be hard. We can help to explain the detail and keep you informed of changes as they happen. If you want any advice on payroll please contact Tracey Simpson at our Preston office on 01772 821021 or for general business queries ask for Judith Dugdale.