Preparation for the New TAX Year

To prepare you for the upcoming Tax Year (2023-2024), we have compiled a summary of all the changes you need to be made aware of that may affect your business.

National Minimum Wage & National Living Wage

There will be an increase in National Minimum Wage & National Living wage in all age brackets. The increased amount is as follows:

• The NLW for those aged 23 & over will increase by 9.7% from £9.50 to £10.42 per hour.
• The NMW for those aged 21 – 22 will increase by 10.9% from £9.18 to £10.18 per hour.
• The NMW for those aged 18 – 20 will increase by 9.7% from £6.83 to £7.49 per hour.
• The NMW for those aged 16 – 17 will increase by 9.7% from £4.81 to £5.28 per hour.
• The Apprentice Rate will increase by 9.7% from £4.81 to £5.28 per hour.

National Insurance Thresholds

The lower Earning Limit (LEL), Secondary Threshold (PT), have stayed the same. However, the Primary Threshold (PT) has slightly increased. The thresholds are as follows:

• The lower Earning Limit (LEL) – Weekly £123 per week, Monthly £533, £6,396
• Primary Threshold (PT) – Weekly £242 per week, Monthly £1,048, Annually £12,570
• Secondary Threshold (ST) – Weekly £175, Monthly £758, Annually £9,100
• Upper Earnings Limit (UEL) Upper Secondary Threshold (under 21) Apprentice Secondary Threshold (apprentice under 25) (AUST) – Weekly £967, Monthly £4,189, Annually £50,270

Pension Auto Enrolment Qualifying Pay & Pension Auto Enrolment Contribution Levels

• The Pension Auto-Enrolment, qualifying pay, and Pension Auto-Enrolment Contribution Levels remain the same as last year.

For more information regarding Pension Auto Enrolment, please visit – https://www.thepensionsregulator.gov.uk/en

Statutory Payments

All Statutory payments, which include earning thresholds and rates per week, will have a slight increase from April 2022.

Here are the new Earning thresholds:

1. Statutory Sick Pay (SSP) is £123
2. Shared Parental Leave (ShPP) is £123
3. Statutory Maternity Pay (SMP) is £123
4. Statutory Adoption Pay (SAP) is £123
5. Statutory Paternity Pay (SPP) is £123
6. Statutory Parental Bereavement Pay (SPBP) is £123

Below is the new Rate Per week:

• Statutory Sick Pay (SSP) is £109.40
• Statutory shared Parental Leave (ShPP) is £172.48 (or lesser of 90% of AWE)
• Statutory Maternity Pay (SMP) is £172.48 (or lesser of 90% of AWE)
• Statutory Adoption Pay (SAP) is £172.48 (or lesser of 90% of AWE)
• Statutory Paternity Pay (SPP) is £172.48 (or lesser of 90% of AWE)
• Statutory Parental Bereavement Pay (SPBP) is £172.48 (or lesser of 90% of AWE)

For further guidance on Statutory payments, please visit - https://www.gov.uk/government/collections/statutory-pay

Personal Tax & Benefits

There will be a slight increase in the higher tax rate in the upcoming tax year; however, the rest of the thresholds will remain the same. The personal tax thresholds are as follows:

• Basic tax rate – 20% from £12,570 to £37,700
• Higher tax rate – 40% from £37,701 to £125,140
• Additional tax rate – 45% £125,141+

Student Loans (SL) & Postgraduate loan recovery (PGL)

The student loan plan 2 and the Rate for Student and Post Graduate Loan deductions remain the same. However, student load plan 1 and 4 have slightly increased. The thresholds are as follows:

• Plan 1 – Per annum £22,015, Per month £1,834.58, Per week £423.36
• Plan 2 – Per annum £27,295, Per month £2,274.58, Per week £524.90
• Plan 4 – Per annum £27,660, Per month £2,305, Per week £531.92
• Post Graduate Loan – Per annum £21,000, Per month £1,750, Per week £403.84

For more information regarding the new Rates & Thresholds for 2023/24, please visit – https://www.gov.uk/guidance/rates-and-thresholds-for-employers-2023-to-2024

Professional Payroll Services

Simplicity can support the growth of your recruitment business by providing full back-office solutions and 100% upfront finance. Please speak to a member of the Simplicity Sales team on 01594 888518 to find out how we can grow your business in the upcoming new financial year.

Recruitment Profit Margins

In the current climate, e.g. cost of living crisis and the rise in the cost of employment, it is vital you prepare your business as soon as you can and update your clients' charge rates to account for the rise in labour costs. Our Margin Calculator helps assist in calculating your pay and charge rates.

To help you prepare for the increase, try our Margin Calculator today!

[brace_page_section id="calculators" header="Calculators"][brace_try_online_calculators header="Try our Margin Calculator" description="The Simplicity Margin Calculator is a unique tool that provides you with a full breakdown of your payroll costs and gives you an insight into your gross profit margin figures." link="https://www.simplicityinbusiness.co.uk/calculate-your-gross-profit-margin-2023/" link_text="Calculate Margins" image="683"]

Editor’s Note: This post was originally published in March 2022 and has been completely revamped and updated for accuracy and comprehensiveness.