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

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

Aug 15, 2023 587 likes •825 views

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

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An Introduction to UK Payroll (4)

Ian Holloway Head of Legislation and Compliance

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Income Tax

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Agenda

  • Legislation
  • The UK tax year
  • Taxable pay
  • The Personal Allowance
  • The tax code
  • The pay adjustment
  • Cumulative and non-cumulative
  • The tax bands
  • Examples.

‘Income Tax (2)’

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Legislation

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

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The UK Tax Year

06 April to 05 April

  • Weekly

§ Fortnightly § Lunar

  • Monthly

§ Quarterly.

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Taxable Pay

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Gross Pay

  • The total pay for the pay period

§ Salary § Overtime § Allowances § Commission § Bonus § Statutory payments (SSP, SMP etc) § Expenses.

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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.

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The Personal Allowance

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Tax Allowances 2018/19

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The Tax Code

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The Tax Code

£11,850

  • Plus

§ Marriage Allowance £1,190

  • less

§ Medical expenses £ 700

Actual allowances £12,340.

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The Tax Code

£11,850

  • less

§ Medical expenses £ 700 § Car benefit £12,000

  • Actual allowances
  • £850.
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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.
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Tax Code Suffixes

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Tax Code Prefixes

Plus new Scottish D codes from 2018/19

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Tax Codes - other

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  • P6
  • P9
  • P9X
  • P45
  • Starter Checklist.

Tax Code Notifications

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Summary

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

Income Tax (2)

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Thank You

Global Payroll Association @GlobalPayAssoc