The new tax year has been a difficult one to prepare for because the autumn Budget was postponed to 11 March due to the general election.
This has proved a challenge for the software developers who were trying to update their payroll software in readiness for the new tax year. Some send out those releases as early as January because some users process period 1 as early as February.
So although the cumulative calculation of PAYE allows the government to make changes to the tax bands and thresholds part way through the tax year and backdate them to 6 April if they choose the same cannot be said of National Insurance. This is because National Insurance contributions are calculated on an earnings period. Currently the upper earnings limit is aligned to the higher rate of tax threshold of £50 000.
The software developers have been pressing...
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