Essential updates for employers: Spring 2024

	Rate from April 2024	Rate from March 2024	Increase
National Living Wage	£11.44	£10.42	9.8%
21-22 year old rate	-	£10.18	12.38%
18-20 year old rate	£8.60	£7.49	14.82%
Under 18 rate	£6.40	£5.28	21.21%
Apprentice rate	£6.40	£5.28	21.21%

From 1st April 2024 the National Living Wage is applicable to workers aged 21 and over. 

Payrolling employment benefits from April 2026 

From April 2026, it will be mandatory to report employment benefits and pay Class 1A National Insurance Contributions (NIC) through payroll software. These changes from HMRC will remove the need for employers to submit forms P11D to HMRC and pay Class 1A NIC separately. 

Reporting expenses and benefits for the tax year ending 5th April 2024 

From 6th April 2023, HMRC stopped accepting new informal arrangements. If you’ve had an informal arrangement in place, you must now register to payroll expenses and benefits for 2024/25. Where you payroll expenses and benefits, you won’t need to submit a P11D for those employees. 

Employers payrolling expenses and benefits in kind may have a Class 1A NIC liability and will need to: 

• Submit a P11D(b) online to tell HMRC your employer Class 1A NIC liability 
• Submit P11D online to report expenses and benefits paid that you did not payroll 
• Give employees a letter explaining what expenses and benefits you have payrolled 

Right to request flexible working from day one 

From 6th April 2024, employees will have greater access to flexible working arrangements under the Employment Relations (Flexible Working) Act 2023. Employees will have the right to request flexible working arrangements from the first day of their employment. 

Other changes coming but still to be confirmed are: 

• Employees can make two requests for flexible working arrangements in any 12 month period 
• Employers have three months to consider an application for flexible working instead of two 
• Employers must consult with employees before their flexible working request can be refused 
• Removing the requirement for employees to include the impact of their request on their employer and how this could be managed in their flexible working application 

Calculating holiday pay 

People working irregular hours, or part of the year (i.e. term-time workers), are entitled to up to 5.6 weeks statutory holiday leave. 

For leave years starting on or after 1st April 2024, employees working irregular hours or for part of the year will build up (‘accrue’) leave differently. This means their entitlement will be 12.07% of the hours they work in a pay period, up to a maximum of 5.6 weeks. 

You can check holiday entitlement by using the HMRC calculator to get an estimate based on days or hours worked in an average week. 

Carer’s Leave rights 

The Carer’s Leave Act introduces new rights of ‘Carer’s Leave’. This is flexible unpaid leave which can be used to provide or arrange care for a dependent with a long-term care need. It’s available to eligible employees regardless of how long they’ve worked for their employer. Leave can be taken as half-days or full days, up to a maximum of one week in a rolling 12 month period. Employees taking Carer’s Leave will benefit from the same employment protections as those on other forms of family related leave. 

Paternity leave changes 

Statutory paternity leave is becoming more flexible from 6th April 2024. From this date, two weeks of paternity leave can be taken any time in the child’s first year. Those weeks can be taken either separately or consecutively. Expectant fathers need to let their employer know 15 weeks before the birth that they plan to take paternity leave. They will need to confirm when they plan to take their leave 28 days in advance of doing so. 

These rule changes will be in place from 8th March to accommodate the 28-day notice period. From this date, the flexibilities will be available to fathers of babies due to be born on or after 6th April 2024, but arrive early. This means new fathers can therefore take one or two weeks’ Statutory Paternity Leave between 8th March and 6th April. 

Scottish tax codes 

New tax rates and bands apply to Scottish employees from 6th April 2024. For 2024/25, there is a new ‘advanced rate’ of 45%, the top rate of tax increases 48%, and starter and basic rate bands both see inflationary increases. Scottish PAYE codes start with an ‘S’ for example S1257L. 

	Rate	2024/25	2023/24
Starter rate	19%	£12,571 - £14,876	£12,571 - £14,732
Basic rate	20%	£14,877 - £26,561	£14,733 - £25,688
Intermediate rate	21%	£26,562 - £43,662	£25,689 - £43,662
Higher rate	42%	£43,663 - £75,000	£43,663 - £125,140
Advance rate	45%	£75,001 - £125,140	N/A
Top rate	48%	over £125,140	over £125,140

The Tipping Act 

The final version of the code of practice in the Tipping Act will take effect from 1st October 2024. The Act will require employers to: 

• Pass on tips/service charges to workers without deductions, except in very limited scenarios, such as deduction of income tax 
• Pass on tips by the end of the month following the month in which the tip was received 
• Distribute them in a fair and transparent manner where they control distribution of tips 
• Use code of practice on fairness and transparency of tip distribution when they control distribution of tips 
• Maintain written policy on how tips are dealt with and ensure it is available to all workers 
• Maintain a ‘tipping record’ of all tips paid and how they have been allocated between workers that’s available to workers who request it 

Customers should know that tips are optional and go to workers. Customers and workers should also easily be able to see how tips are handled. 

NIC for former members of Armed Forces 

NIC relief on employee’s earnings below the veterans upper secondary threshold for employers who hire former members of the UK regular Armed Forces has been extended into 2024/25. 

End of year 

Get ready to give your employees a P60 if they are in your employment on 5th April 2024. The employee must receive this information by 31st May 2024. 

Prepare your last Full Payment Submission (FPS) or Employer Payment Summary (EPS) of the year. Your final FPS or EPS for the year ending on 5th April 2024 must show that it is your last submission.   

How TaxAssist can help 

This guide has helpful information about payroll changes. Remember, TaxAssist Accountants has a team that can help with all your payroll needs. Contact us today on 01943 725682 or use our online contact form.