Class 1A NI liabilities – a useful new feature to Dataplan’s reports

As the industry will know, legislation affecting payroll is constantly changing. Quite apart from the temporary changes seen in the last year due to COVID – such as the establishing of the CJRS and SSP being made recoverable for certain businesses for the first time since 2013/14, the last year has also witnessed significant permanent alterations coming into play.

Perhaps the most obvious example of this would be in relation to Employment Allowance; the tightening of eligibility criteria in this respect has been drastic. However, a lesser known change with an important impact also came into effect last April.

Termination Payments now subject to class 1A NICs

As of 6 April 2020, all taxable termination payments are subject to class 1A NICs at 13.8%, to the extent that they are over £30K. Making it more costly for employers to dismiss certain employees – the change has embedded class 1A NI as a much more frequent feature of payroll liability breakdowns for businesses.

Updated reporting for our clients

At Dataplan, we consider it vital that our clients are fully up-to-speed with all of the liabilities associated with the payrolls that we manage. We realise that it can be hard to keep pace with changes to the legislative landscape – particularly in a time of crisis, and so we strive to do the legwork on this for clients as far as we possibly can.

One example of this is how we constantly hone our payroll software to keep it fully up-to-date with all recent and upcoming statutory requirements. That’s why we are already set for the scrapping of the earlier year update (EYU) and its replacement with the ability to send a corrective FPS for a prior year, effective from this April. That’s also why we have recently updated our payroll reports, so that the sum of any class 1A NI liabilities for a given pay run is specified on the first page of the client’s analysis of pay.

Making this information appear ‘front and centre’ within the payroll batch delivers maximum clarity for our clients and helps to make them fully aware of their HMRC pay bill and all of its differing components. We are always considering new ways in which we can make our clients’ lives easier and aid their internal reconciliation processes and this useful new feature to Dataplan’s reports should make an invaluable contribution to this.