As the 2024/25 tax year draws to a close (ending 5 April), we’d like to update you on some important tasks and changes affecting your business. Please review the details below.
Tasks Before 5 April 2025
One-Off Pension Contributions
Most employees have an annual pension allowance of £60,000, which tapers once earnings exceed £200,000. If you intend to make a one-off pension contribution to fully utilise this allowance, please inform us when sending March payroll changes.
Payrolling Benefits in Kind (PBIK)
From 6 April 2026, payrolling Benefits in Kind becomes mandatory. We’re offering to transition you a year early if you prefer to get ahead of the change.
If you’d like to switch from P11D reporting to PBIK, please contact Harley at harley@payrollunlimited.co.uk for next steps and pricing details.
Why Switch to PBIK?
- Real-time tax adjustments for employees’ benefits.
- No separate P11D forms and submissions, reducing administrative tasks.
- Greater transparency for employees, with benefit tax details included in regular pay.
Changes for the New Financial Year
Employment Allowance and National Insurance
The Employment Allowance allows eligible employers to claim relief on Employer National Insurance contributions. In the October budget, the criteria for claiming Employment Allowance changed.
- The allowance increases from £5,000 to £10,500.
- The £100,000 eligibility threshold has been removed. Previously, employers with an Employer Class 1 NI bill over £100,000 in the previous tax year were unable to claim.
The rules for connected companies remain the same: if two or more companies are connected, only one company may claim the Employment Allowance. If your company is part of a group or has connected companies that we are not aware of, please let us know so we can discuss which company will be nominated to claim.
Employer NI Bands and Rates
- The rate of Employer NICs rises from 13.8% to 15%.
- The annual earnings threshold at which employers become liable to pay NICs reduces from £9,100 to £5,000.
These changes mean higher Employer NI contributions per employee, increasing the benefit of salary sacrifice pension schemes or benefits schemes. If you contribute NI savings to your employee salary sacrifice pension, we will recalculate your contribution amount as it will be slightly higher.
If you require projections for increased costs, we are happy to provide these either free of charge or at a cost, depending on your support package.
Transition from the Enjoy Benefits Portal
We’re phasing out the Enjoy Benefits Portal for payslip access. If you haven’t yet moved to our new Connect portal, please note that from April onward you’ll need to move over or distribute payslips yourself. This will not affect employee access to the Enjoy Benefits Portal for any other purposes.
- Easy and intuitive: the Connect portal offers a user-friendly platform for employees to access payroll documents.
- Free demo: we’re happy to arrange a live demo at no cost.
- Next steps: Harley will be in touch via Codebase to discuss whether you’d like to adopt the Connect portal or distribute payslips yourself.
Questions or Concerns?
If you have any questions about these updates or need further assistance, please reply to this email or create a ticket in Codebase.
We appreciate your continued partnership and look forward to supporting you in the 2025/26 tax year.
