Employers update – things you need to know for your payroll 2023/24

Employers update – things you need to know for your payroll 2023/24

There are several updates that employers need to know about that relate to paying their workforce and running their payroll as we approach 2024.

Real Living Wages increase

The Living Wage rates for 2023-24 were announced on the 24th October 2023.

The Real Living Wage (RLW) will rise to £12 an hour across the UK. This is a £1.10 increase on the current rate. In London it will rise to £13.15 an hour, a £1.20 increase.

Employers will then have 6 months until May 1st to implement them.

Unlike the government-set national living wage, the 'real living wage' is a voluntary rate of pay that employers can choose to give to their staff.

Increase to National Minimum Wage 2024

The government’s National Minimum Wage (NMW) is currently £10.42, following an increase in April 2023. Chancellor Jeremy Hunt has announced that this will rise to £11 in April 2024.

The National Minimum Wage is the minimum hourly rate that workers under the age of 23 are entitled to if they are one of the following:

• Full-time worker.
• Part-time worker.
• Casual worker.
• Agency worker.

Earlier in 2023, the government also committed to making the National Living Wage equal two-thirds of median earnings by 2024 for workers aged 21 and over. The age threshold was already reduced from 25 to 23 years in 2021 but will be reduced even further to 21 years by 2024, as a result of advice from the Low Pay Commission.

Student and post graduate loan thresholds 2024

From 6 April 2024, the employee earnings threshold for student loan plan 1 will rise from £22,015 per year to £24,990 per year.

The income threshold for repayment of plan 2 loans from April 2024, will remain at £27,295 per year.

The income threshold for repayment of plan 5 loans due to come into repayment from April 2026, is £25,000 per year.

The income thresholds for Postgraduate Masters and Doctoral Loans to apply from April 2024 is yet to be announced but may continue to be frozen at £21,000. Originally it was indicated that this threshold would remain at £21,000, but with the increase to the plan 1 threshold, this is subject to further review and announcement.

Increase in fines for illegal working

From early 2024, the penalties for employers who hire individuals without appropriate immigration permission will be tripled.

For a first breach, the maximum penalty per illegal worker will increase from £15,000 to £45,000; and

For repeat breaches, the maximum penalty per illegal worker will rise from £20,000 to £60,000.

If you employ foreign workers, you should ensure that you have adequate and proactive measures to prevent and mitigate the risks to your business from illegal working. This not only protects you from non-compliance and fines but will safeguard your company’s reputation.

Measures you can take include:

• Thorough Right-to-Work Checks.
• Employee Audits.
• Review Policies and Procedures.
• Due Diligence of Sub Contractors
• Illegal Working Training for Managers and Supervisors.
• Regular Updates

IR35 offset rules

It has been widely reported that a change to the current off payroll working IR35 rules – known as the ‘IR35 offset’ could come into force from April 2024.

The expected change will not affect the vast majority of contractors but, it does mean a significant change to the rules where both a contractor’s company and his client pay the same tax liability twice.

The current proposal means that the liability for tax and NICs would be shared between the contractor (working via a limited company), and the deemed employed (e.g. the end client). The proposal stipulates that contractors or their company would not have to pay any additional liabilities as part of the offset.

Autumn Statement 2023

The Autumn Statement will take place on 22^nd November 2023 and may well include further updates that affect employers, potentially including tax rates and tax thresholds changes and penalties and fines changes.

We’ll be sharing a full update on all the additional changes announced on our website following the Autumn Statement.

How Haines Watts can help

Payroll and keeping up with payroll legislation can be a real headache for business owners and can feel overwhelming at time.

Outsourcing your payroll to Haines Watts can take away the headache of payroll and take your payroll worries away.

We provide:

• Fixed fees.
• Real Time Information (RTI) PAYE filing.
• Payments to staff directly on your behalf.
• Email communication to employees including payslips.
• Easy to understand tailored reports.
• Preparation of end of year tax returns.
• Payroll cost analysis.
• Advice on all payroll related issues.
• Reporting to your Auto Enrolment pension provider.
• Assistance with Auto Enrolment correspondence.
• Fully bespoke service dependent on your needs.

You can find out more about the benefits of outsourcing your payroll to Haines Watts in our Payroll Outsourcing Guide.

If you’d like to have a chat about your payroll needs, contact our team in Chester, Liverpool, or Wirral.