Minimum Wage, Statutory Pay and Deduction Thresholds 2024-25

Minimum Wage, Statutory Pay and Deduction Thresholds 2024-25

Mar 18, 2024 | National Minimum Wage, Payroll

Minimum Wage, Statutory Pay and Deduction Thresholds 2024-25

Picture of graph called payroll with a magnifying glass

Minimum wage rates change on 1st April each year so it’s vitally important you are aware of the new rates and ensure you have checked your payroll software is up to date to ensure wages are calculated using the correct rates.

The hourly rate for the minimum wage depends on age and whether you are an apprentice. You must be at least:

  • school leaving age to get the National Minimum Wage
  • From 1 April 2024, workers aged 21 and over will be entitled to the National Living Wage – the minimum wage apply for workers aged 20 and under

Minimum Wage

Rate from 1 April 2023 Rate from 1 April 2024 Increase
National Living Wage (NLW)
for workers 21 and over		 £10.42 £11.44 9.8%
18-20 year old rate (NMW) £7.49 £8.60 14.8%
16-17 year old rate (NMW) £5.28 £6.40 21.2%
Apprentice rate £5.28 £6.40 21.2%

 

 Personal Allowance & Income Tax

The amount of Income Tax you need to deduct from your employees’ wages depends on how much they earn and how much of their taxable income is above their personal allowance and which tax band it falls into.

  • Personal Allowance: 0% tax on earning up to £12,570.
  • The standard tax code is 1257L.
  • 20% tax is due on earnings between £12,571 and £50,270.
  • 40% tax is due on earnings between £50,271 and £125,140.
  • 45% tax is due on earnings more than £125,140.

Emergency tax codes from 6th April 2024 are as follows:

  • 1257L W1
  • 1257L M1
  • 1257L X

Statutory Pay Rates

From 6th April 2024 Statutory Sick Pay (SSP) is £116.75 per week, with the amount due based on the number of working days in the week.

From 7th April 2024 the following statutory payments increase to £184.01 per week or 90% of average weekly earnings (AWE), whichever is the lower:

  • Statutory Maternity/Adoption Pay – eligible employees will receive up to 39 weeks of SMP/SAP at 90% of their average weekly earnings before tax – for the first 6 weeks of their leave, followed by £184.03 or 90% of their average weekly earnings (whichever is lower) – for the remaining 33 weeks of their leave.
  • Statutory Paternity Pay
  • Statutory Shared Parental Pay
  • Statutory Adoption Pay
  • Statutory Bereavement Pay

For further information about payroll rates for 2024-2025 visit the government website

National Minimum Wage and National Living Wage rates – GOV.UK (www.gov.uk)

Running your own payroll can be tricky, especially as you have to be sure you’re paying both your employees and HMRC the correct amount. If you’re worried about running payroll, why not outsource? We can take the stress away of payment deadlines and you can be sure you’re paying both your employees and HMRC correctly.

 

 

Book a discovery call

ABOUT SUE

Sue Haynes is the founder of Cactus Bookkeeping and helps business owners
with all aspects of Bookkeeping to save them time so they can concentrate on running their
business. Sue is licensed, regulated and supported by the Institute of Certified Bookkeepers (ICB)

Book a discovery call

 

 

 

The benefits of outsourcing your payroll

The benefits of outsourcing your payroll

Jan 1, 2024 | Bookkeeping, Payroll

The benefits of outsourcing your payroll

payslips with coins and notes

Running your own payroll? How confident are you that you have a handle on everything?

Now don’t get me wrong there is some great payroll software out there, 𝘽𝙐𝙏 would you recognise if something didn’t quite look right and know how to check it? It only takes one small mistake to drastically alter the outcome of someone’s wages.

No matter what your payroll frequency, there is a lot you need to consider.

  • Checking for any tax code notifications.
  • Check your employees are being paid the correct amount, not only for the work they have done but also for their age.
  • Should any employees be in an auto enrolment pension scheme?
  • Do you have an apprentice, their pay can be quite confusing, because the minimum apprenticeship wage is linked to their age and how long they have been an apprentice.
  • Correctly calculating their starting / leaving pay.
  • Calculate and record holiday entitlement.
  • Understanding when to use a P45 or P46.
  • And that is before you factor in statutory pay and leave payments, which to be honest, can get complicated.

Having done payroll for several years I know it doesn’t take much for even the most straight forward payroll to get a little complicated, especially if we have to start considering SSP, SMP or pension schemes!!

Your software is only as good as the information entered into it. I’m sure no one wants to end up inadvertently paying their employees incorrectly. If you’ve been struggling and unsure of anything payroll related, have you ever thought of outsourcing? Yes, there is a cost to outsourcing but what about the benefits?

  • Time – have you ever worked out how much of your time is spent on payroll? Remember, your time is not free, could your time be better spent on your business, or would it offer you a little timeout?
  • Stress – I do payroll for a living and sometimes even I get stressed, what about you? Dealing with HMRC whether it be tax or payroll can be stressful, it doesn’t have to be.
  • Money – late payments, auto-enrolment failures, minimum wage non-compliance can all incur fines, but this can be avoided.

Outsourcing means you no longer have to worry about getting it right. A qualified payroll professional will ensure your payroll is processed correctly based on the information provided. They will take care of pay rate increases, pension opt in/opt out, statutory payments, holiday entitlement and act as your payroll agent with HMRC. This all helps to reduce the risk of errors and ensure compliance.

If this all sounds like a huge sigh of relief and you want to find out more, please get in touch.

 

 

Book a discovery call

ABOUT SUE

Sue Haynes is the founder of Cactus Bookkeeping and helps business owners
with all aspects of Bookkeeping to save them time so they can concentrate on running their
business. Sue is licensed, regulated and supported by the Institute of Certified Bookkeepers (ICB)

Book a discovery call

 

 

 

Holding a Staff Party – A guide to HMRC rules

Holding a Staff Party – A guide to HMRC rules

Nov 27, 2023 | Bookkeeping, VAT

Holding a Staff Party – A guide to HMRC rules

hand holding a selection of coins

Party season is here, dig out the party outfit and get those dancing shoes on.

It’s time to get our heads around HMRC rules, to avoid being hit with an unexpected tax bill, and ensure we stay compliant.

To qualify for tax exemption the event must meet specific conditions:

❄️ it should be an annual occurrence

❄️ be open to all employees

❄️ the cost should not exceed £150.00 per head (including VAT), this should cover the total costs of the event from start to finish, and include venue hire, food, drink,  entertainment and accommodation.

Note client entertainment is not generally an allowable expense.  If your party has clients and employees attending, only claim for the amount spent on your employees.

Do you host multiple events a year?

If you host multiple annual events, the total cost per head for all events in a given tax year must be combined.  If the combined cost exceeds the limit, even by 1 penny, the exemption will not apply, and the total amount becomes subject to tax.

Do you have separate locations and departments?

If your business has more than one location, an annual event that’s open to all your staff based at one location still counts as exempt. You can also put on separate parties for different departments if all your employees can attend one of them.

Record Keeping

Thorough record-keeping should be kept for HMRC compliance.  You should retain invoices, receipts, and a list of attendees for each even to support any claims for exemptions.

As your business plans for social functions and parties, it’s crucial to be mindful of HMRC rules to void unexpected tax liabilities.

 

Book a discovery call

ABOUT SUE

Sue Haynes is the founder of Cactus Bookkeeping and helps business owners
with all aspects of Bookkeeping to save them time so they can concentrate on running their
business. Sue is licensed, regulated and supported by the Institute of Certified Bookkeepers (ICB)

Book a discovery call

 

 

 

The Importance of Cash Flow

The Importance of Cash Flow

Nov 17, 2023 | Bookkeeping

The Importance of Cash Flow

hand holding a selection of coins

Often overshadowed by its glamorous counterparts like revenue and net income, cash flow is the lifeblood of any business.

Cash flow refers to the movement of money in and out of a business and can have a significant impact on a business’ ability to trade, grow and invest.

A positive cash flow ensures that a business can cover its day-to-day expenses such as materials, rent, utilities and payroll.  Without adequate cash flow, even a profitable business can find itself struggling to meet its immediate obligations.

During tough times the importance of cash flow becomes even more important. A cash reserve will provide a buffer, allowing a business to weather a storm.  In contrast  a business with poor cash flow may find itself vulnerable and unable to navigate any unforeseen circumstances.

If you are looking to grow your business, whether it be by investing in research & development, acquiring new assets, or expanding into new markets, being on top of your cash flow will pay a major role in enabling your plans to come to fruition. Having a clear understanding of cash flow patterns, will enable businesses to make strategic decisions in line with their financial capabilities and long-term goals.

Maintaining a healthy cash flow should be a top priority for all businesses, regardless of the business size or industry.

Remember for cash flow forecasting to be effective, your business accounts will need to be kept up to date.

 

Book a discovery call

ABOUT SUE

Sue Haynes is the founder of Cactus Bookkeeping and helps business owners
with all aspects of Bookkeeping to save them time so they can concentrate on running their
business. Sue is licensed, regulated and supported by the Institute of Certified Bookkeepers (ICB)

Book a discovery call

 

 

 

What is Anti Money Laundering (AML)?

What is Anti Money Laundering (AML)?

Aug 18, 2023 | Bookkeeping

What is Anti Money Laundering (AML)?

wooden blocks stacked

When you decide to outsource your bookkeeping to a professional bookkeeper you may come across the term AML which stands for Anti Money Laundering. AML regulations exist to prevent criminals from laundering money through legitimate businesses.

Any business who has access to the finances of another business, such as bookkeepers and accountants, must be authorised and regulated under AML regulations. Cactus Bookkeeping are qualified with the Institute of Certified Bookkeepers (ICB) and are supervised and regulated by them to comply with these regulations.

For each new client we onboard we must conduct checks to comply with AML, these checks will require photographic ID for each person with significant control in the business.  We will ask for a passport or driving licence and proof of address in the form of a recent utility bill or bank statement (dated within the last 3 months). We use this information to run verification checks to confirm identity through secure software, these checks will be stored on our system to comply with AML regulations.

We will also be in touch with you from time to time if your proof of identity is expiring so that we can run a new check using your current information. We must be notified if you change address, as we will need to run the check again. This is an essential process bookkeepers and accountants need to undertake and is no cause for concern.

Hopefully, this explains why we ask for this information.  As always if you have any questions about the process then please let us know, we will be happy to talk it through with you.

 

 

Book a discovery call

ABOUT SUE

Sue Haynes is the founder of Cactus Bookkeeping and helps business owners
with all aspects of Bookkeeping to save them time so they can concentrate on running their
business. Sue is licensed, regulated and supported by the Institute of Certified Bookkeepers (ICB)

Book a discovery call