As we approach the end of another UK tax year, we have set out five key points for employers to consider. 

Acting early can make end of year much simpler and stress free!  

Please reach out to one of our employment tax / equity reward specialists for support.

1. EMPLOYER NIC RATES 

You are probably well aware that employer Class 1 National Insurance (“NIC”) rates are going up to 15% from 6 April 2025, but are you comfortable that your payroll software reflects this?  Have the increased costs been factored into your budget and forecasting models? Whilst the increased costs may feel inevitable, salary sacrifice for pensions, is a tangible measure that can be considered to bring costs down.

2. MINIMUM WAGE RATE 

Have you considered the impact of increases to National Minimum Wage (“NMW”) from 1 April 2025? The increase to National Living Wage (“NLW”) as applicable to those aged 21 and over is generally expected, but take care to look at the specific rules for apprentices and those aged 16 to 20 where there has been a significant percentage increase relative to 2024/25.

3. LAST YEAR FOR VOLUNTARY PAYROLLING OF BENEFITS 

From April 2026 it will be mandatory for employers to report the majority of benefits provided to employees via payroll (and no longer via forms P11D).  2025/26 is the last year that this can be done on a voluntary basis. Getting payrolling in place a year early could be a good idea to get ahead of the curve and have a year of transition and understanding before the mandatory rules kick in.  If you do want to voluntarily payroll benefits, an agreement needs to be in place with HMRC before the beginning of the tax year, so now is the time to act.

4. TRACKING BUSINESS TRAVELLERS TO THE UK 

If you have business visitors who travel to the UK you may already have a Short-Term Business Visitor Agreement (“STBVA”) in place, which can relax a strict obligation to UK PAYE where certain conditions are met.  It is best practice to regularly check your tracking schedule and not just treat this as a ‘year end’ task (STBVA reporting is due by 31 May each year).  Acting now means you can be proactive and potentially take corrective action should business visitors be likely to exceed reporting or taxable thresholds.

5. REGISTERING NEW SHARE PLANS 

If you have set up a share plan in the year, or if employees or directors have received shares or options in the year, you need to have registered “a plan” with HMRC via ERS Online Services.  Your ERS return isn’t due until 6 July, but the plan should be registered well in advance of this.  The process can take up to 3 weeks so act now to avoid automatic penalties.