New Codes for April 2015

By February 12, 2015Uncategorized

New National Insurance Categories April 2015

Tax Allowance Changes

One of the changes from April 2015 is that part of the tax allowance can be transferred from one spouse, or civil partner, to the other. This is available if at least one partner earns below the threshold or only pays basic rate tax. There will be an online process for employees to apply for the transfer and two new suffixes for the tax codes, an M for the recipient and N for the transferor.

 

The transferor will be able to move up to £1060 of their allowance to their partner. There will then be a coding notice issued which will be applied in the usual way. We do not anticipate any issues with these changes but we imagine take up may well be very low unless HMRC embarks on a determined publicity campaign.

 

If you want some further information you can see here, but is anticipate that people would be unable to start the application process until after the 6th April 2015.

 

National Insurance Categories

As well as the new tax codes there are to be seven new NI codes introduced in April as well. These are related to the previously reported under 21s employer NIC saving, and there has even been a new NI band introduced as well. We do not anticipate this causing any problem other than a note that the employer should choose the appropriate NI code for the employee.

 

For interest the codes are as below –

 

M – Not contracted out standard rate contributions
Z- Not contracted out deferred rate contributions
Y – mariners not contracted out standard rate contributions
P – mariners not contracted out deferred rate contributions
V – mariners contracted out salary related contributions
I – contracted out salary related standard rate contributions
K – contracted out salary related deferred rate contributions

 

With V I K to be removed in April 2016.  If you want further information please see here.