Some Rates have been announced for April 2021
Some details have been released of the rates expected to come into force for the 21/22 tax year. This could change but these are the values HMRC are expecting to use and we would hope there will be no surprises with everything else that is going on.
Also remember IR35 rules are to come into force in April following their delay from last year, this will affect you if you have contractors. Small companies should remain exempt but you will still need to check and record against the criteria.
National Minimum Wage from April 2021
Note the reduction in age from 25 to 23 for the national living wage rate.
| Age Range | Rate |
|---|---|
| Aged 23 and above (national living wage rate) | £8.91 |
| Aged 21 to 22 inclusive | £8.36 |
| Aged 18 to 20 inclusive | £6.56 |
| Aged under 18 (but above compulsory school leaving age) | £4.62 |
| Apprentices aged under 19 or in their first year | £4.30 |
National Insurance
The lower earnings limit remains the same at £120 per week but the bands where National Insurance starts to be payable are moving up very slightly. The primary threshold where employees start making contributions remains at a different level to the secondary level where the employer’s contributions start.
| Weekly | Monthly | |
|---|---|---|
| Lower Earnings Limit | £120 | £520 |
| Primary Threshold (employees) | £184 | £797 |
| Secondary Threshold (employers) | £170 | £737 |
| Upper Earnings Limit | £967 | £4189 |
Qualifying earnings used for auto-enrolment pensions is still tagged to the band of earnings between the lower and upper earnings limits so pension contributions may also increase slightly. The Pensions Regulator may change this but we would expect plenty of notice.
Statutory payments
The statutory payment rates are increasing slightly next year.
| SMP rate from week 7, whichever is lower | £151.97 or 90% of the employee’s average weekly earnings |
| SSP | £96.35 per week (£19.27 per day for a 5 day worker) |
We expect these rates to come through but there could be changes announced. Current guidance says furlough pay is not pay for hours worked so the change in rates will not affect furlough amounts immediately unless the guidance changes. If you are using a flexible furlough arrangement you must ensure the National Minimum Wage requirements are met for the hours worked.
