The other element is a further change to the 40% tax band from a specified point in time. Pre-budget changes usually apply from 6 April of each year with the March budget changes being applied to payments made from 18 May, and on some occasions from 18 June. So the government is likely to announce a point in September when the 40% tax band is to be revised.

On a cumulative tax basis (only) these changes will result in individuals who continue to pay the Basic Rate of 20% receiving a £60 rebate offset against any tax liability in September. Of course, employees who are on a week-1/month-1 basis will only see an impact from their September payments and the effect will not be backdated! From then on, the tax liability will be reduced by the equivalent of £10 per month.

Software Impacts The major challenge will be for in-house payroll software suppliers who will now be required to add a further unscheduled update to be distributed to their client base - at an additional cost to their businesses.

For more payroll hints and tips, visit Simon Parsons’ advice column.

If you'd like to benefit from the insight and expertise offered by our Payroll Services team, call us today on 0800 733 337 or contact us online.

Page 2 of 2 :: First | Last :: Prev | 1 2 | Next