An Introduction to UK Payroll (4) Ian Holloway Head of Legislation - PowerPoint PPT Presentation

An Introduction to UK Payroll (4) Ian Holloway Head of Legislation and Compliance

Income Tax

Agenda • Legislation • The UK tax year • Taxable pay • The Personal Allowance • The tax code • The pay adjustment ‘Income Tax (2)’ • Cumulative and non-cumulative • The tax bands • Examples.

Legislation • The Income Tax (Earnings and Pensions) Act 2003 • The Income Tax (PAYE) Regulations 2003

The Tax Year

The UK Tax Year 06 April to 05 April • Weekly § Fortnightly § Lunar • Monthly § Quarterly.

Taxable Pay

Gross Pay • The total pay for the pay period § Salary § Overtime § Allowances § Commission § Bonus § Statutory payments (SSP, SMP etc) § Expenses.

Taxable Pay • Gross pay • less § Expenses § Pension contributions § Charitable giving in the payroll § Contribution towards a Share Incentive Plan § Any allowed Optional Remuneration Arrangement • Add on § Payrolled benefits.

The Personal Allowance

Tax Allowances 2018/19

The Tax Code

The Tax Code £11,850 • Plus § Marriage Allowance £1,190 • less § Medical expenses £ 700 Actual allowances £12,340 .

The Tax Code £11,850 • less § Medical expenses £ 700 § Car benefit £12,000 • Actual allowances - £850 .

The Tax Code When allowances have been issued by HMRC: • £12,340 § Allocated code 1234 • -£850 § Allocated code 84 • Then a prefix or suffix is added.

Tax Code Suffixes

Tax Code Prefixes Plus new Scottish D codes from 2018/19

Tax Codes - other

Tax Code Notifications • P6 • P9 • P9X • P45 • Starter Checklist.

Summary • Legislation • The UK tax year • Taxable pay • The Personal Allowance • The tax code.

Next….. Income Tax (2)

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