What’s New in Tax Year 2021-22
March 2021
Following the announcement of the budget on 2 March 2021, we have compiled together some updates that may affect your payroll as we move into the new tax year.
Please review and let the payroll team know if any of these changes will need to be considered on your payroll in the month ahead.
National Minimum Wage and Living Wage rates
There are different levels of National Minimum Wage (NMW), depending on your age and whether you are an apprentice.
Currently, if you’re aged 25 and over, you’ll get the National Living Wage (NLW).
From 1 April 2021, you’ll get NLW if you’re aged 23 and over. This is important as the NLW has always applied to 25 years and over previously so please consider the new age range applied.
The current minimum wage and living wage rates are:
| Age | Current rates |
|---|---|
| 25 and over | £8.72 |
| 21 to 24 | £8.20 |
| 18 to 20 | £6.45 |
| Under 18 | £4.55 |
| Apprentice* | £4.15 |
From April 2021:
| Age | Rates from April 2021 |
|---|---|
| 23 and over (NLW) | £8.91 |
| 21 to 22 | £8.36 |
| 18 to 20 | £6.56 |
| Under 18 | £4.62 |
| Apprentice* | £4.30 |
*If under 19 or in first year of apprenticeship (otherwise refer to age bands). The apprenticeship rate does not apply to Higher Level Apprenticeships.
DT Payroll can easily see the rate changes where hours and the rates are visible, however salaries can be harder to determine! It is the employer’s obligation to inform us of all rate increases so please confirm these to us in writing along with your usual April payroll data.
Other rates you may find useful
| Statutory Rates | Current rates |
|---|---|
| Sick Pay | £96.30 per week |
| Maternity Pay | 90% of the average earnings first 6 weeks £151.97 for the remaining 33 weeks |
| Paternity Pay | £151.97 per week for the maximum of two consecutive weeks |
Tax Codes
In April 2021, the personal allowance will rise by £70 to £12,570. It will then remain the same until April 2026. That applies to all four nations – England, Scotland, Wales, and Northern Ireland. … The threshold for higher-rate taxpayers will also increase in April 2021 by £270, from £50,000 to £50,27
DT Payroll will initiate this uplift for all current tax codes unless we have received a different coding notice from HMRC, which will supersede the above.
