Guidance

Software developers: PAYE update 23

Published 4 April 2019

The information in this update is taken from the:

• Autumn Budget Statement 29 October 2018
• Scottish Draft Budget 12 December 2018
• Welsh Draft Budget 2 October 2018

1. Income Tax changes from 6 April 2019

• personal allowance (all age groups, for the whole of the UK) £12,500
• minimum amount of married couple’s allowance £3,450
• blind person’s allowance £2,450

The Income Tax rates, bandwidths and flat rate tax codes (where applicable) from 6 April 2019 are:

• English & Northern Irish basic rate 20% bandwidth £1 to £37,500 BR
• English & Northern Irish higher rate 40% bandwidth £37,501 to £150,000 D0
• English & Northern Irish additional rate 45% bandwidth £150,001 and above D1
• Scottish starter rate 19% bandwidth £1 to £2,049
• Scottish basic rate 20% bandwidth £2,050 to £12,444 SBR
• Scottish intermediate rate 21% bandwidth £12,445 to £30,930 SD0
• Scottish higher rate 41% bandwidth £30,931 to £150,000 SD1
• Scottish top rate 46% bandwidth £150,001 and above SD2
• Welsh basic rate 20% bandwidth £1 to £37,500 CBR
• Welsh higher rate 40% bandwidth £37,501 to £150,000 CD0
• Welsh additional rate 45% bandwidth £150,001 and above CD1

Revised payroll software must be used from 6 April 2019.

1.1 Changes in tax coding

There will be a general uplift of tax codes with suffixes ‘L’, ‘M’ and ‘N’. Full instructions have been issued to employers on form P9X(2019) Tax codes to use from 6 April 2019.

As a general rule, unless an amended code notification has been received on a form P9(T), employers should amend 2018 to 2019 tax codes as follows:

• ‘L’ suffix codes – increase by 65, for example code 1185L becomes 1250L
• ‘M’ suffix codes – increase by 71
• ‘N’ suffix codes – increase by 59
• the PAYE threshold from 6 April 2019 is raised to £240 per week (£1,042 per month)
• the code for emergency use from 6 April 2019 is 1250L

1.2 Changes to tax tables from 6 April 2019

The new Taxable Pay Tables (Tables B to D April 2019) are available in easy to print format so if you need a paper copy you can help us to keep costs down by printing one off.

These tables give the revised Income Tax rates and bandwidths, and are used from the first pay-day on or after 6 April 2019.

1.3 Specification for PAYE Tax Table Routines

The following changes were made to the parameter values in appendices A, B and C of the Specification for PAYE Tax Table Routines Version 17.2 (February 2019).

Appendix A: Parameter values from 6 April 2019.

B1 – bandwidth 1 0 unchanged
C1 – bandwidth 1 cumulative 0 unchanged
K1 – annual tax 1 cumulative 0 unchanged

B2 – bandwidth 2 changed to 37,500
C2 – bandwidth 2 cumulative changed to 37,500
K2 – annual tax 2 cumulative changed to 7,500

B3 – bandwidth 3 changed to 112,500
C3 – bandwidth 3 cumulative 150,000 unchanged
K3 – annual tax 3 cumulative changed to 52,500

R1 – rate 1 10% unchanged
R2 – rate 2 20% unchanged
R3 – rate 3 40% unchanged
R4 – rate 4 45% unchanged

G – Gpointer 2
M – Maxrate 50%

Appendix B: parameter values from 6 April 2019

SB1 – bandwidth 1 changed to 2,049
SC1 – bandwidth 1 cumulative changed to 2,049
SK1 – annual Tax 1 cumulative changed to 389.31

SB2 – bandwidth 2 changed to 10,395
SC2 – bandwidth 2 cumulative changed to 12,444
SK2 – annual tax 2 cumulative changed to 2,468.31

SB3 – bandwidth 3 changed to 18,486
SC3 – bandwidth 3 cumulative changed to 30,930
SK3 – annual tax 3 cumulative changed to 6,350.37

SB4 – bandwidth 4 changed to 119,070
SC4 – bandwidth 4 cumulative 150,000 unchanged
SK4 – annual tax 4 cumulative changed to 55,169.07

SR1 – rate 1 19% unchanged
SR2 – rate 2 20% unchanged
SR3 – rate 3 21% unchanged
SR4 – rate 4 41% unchanged
SR5 – rate 5 46% unchanged

G1 – Gpointer 2
M – Maxrate 50.00%

Appendix C: Parameter values from 6 April 2019

WK1 – annual tax 1 cumulative 0 (new parameter)
WK2 – annual tax 2 cumulative 7,500 (new parameter)
WK3 – annual tax 3 cumulative 52,500 (new parameter)

WR1 – rate 1 10% (new parameter)
WR2 – rate 2 20% (new parameter)
WR3 – rate 3 40% (new parameter)
WR4 – rate 4 45% (new parameter)

G2 – Gpointer 2
M – Maxrate 50%

1.4 Payroll Test Data

The Software developers: payroll test data has been updated.

2. Class 1 National Insurance contributions (NICs) changes from 6 April 2019

In the Autumn Budget on 29 October 2018 the Chancellor announced the following 2019 to 2020 Class 1 NICs limits:

• Lower Earnings Limit £118 a week
• Primary Threshold £166 a week
• Secondary Threshold £166 a week
• Upper Earnings Limit £962 a week
• Upper Secondary Threshold £962 a week
• Apprentice Upper Secondary Threshold £962 a week

2.1 National Insurance earnings limits, thresholds and rates

Class 1 NICs rates 2019 to 2020

2.2 National Insurance guidance for software developers

This technical specification has been updated for the 2019 to 2020 tax year.

2.3 National Insurance employment allowance

For 2019 to 2020 the employment allowance, which many employers are eligible to claim where they have a secondary Class 1 NICs liability, will remain at £3,000.