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Payroll

Changes to National Insurance
Changes to National Insurance 758 513 Stepping Stones Accountancy

Changes to National Insurance

National Insurance (NI) is a government initiative where contributions are paid by employers, employees and self-employed. The payment is used for various state benefits and services such as the NHS (National Health Service), state pensions, benefits to be drawn by unemployed and other social security aspects.

Contributors of National Insurance are individuals who are employed or self-employed and earning above a specific income threshold. These contributors fit into 4 classes:

  • Class 1 – Employed and employers
  • Class 2 – Self-employed individuals
  • Class 3 – Voluntary contributions from individuals to cover any gaps in their NI which allows them to qualify for certain benefits
  • Class 4 – Extra contributions from self-employed because of an increase in profits

The contribution of NI is calculated based on earnings and employment status. For employees, payment is deducted directly from their salary by the employer via their PAYE (pay as you earn) system. Self-employed professionals will pay their contributions through their self-assessment tax return.

This year the Government have introduced several changes to NI contributions with the focus of reducing the financial burden to employees and self-employed. Here is a summary of the changes:

Class 1 NIC – For Employees

As of 6th January 2024, the rate of NIC for Class 1 which was paid by employees decreased from 12% to 10% on earnings between £12,570 and £50,270. It is estimated that the reduction will save employees up to £450 annually after their tax payments.

Class 4 NIC – For Self-Employed

On 6th April 2024 the main rate of NIC for Class 4 was reduced from 9% to 6%. Also, any self-employed individuals where profits are above £12,570 no longer need to pay Class 2 NICs but will retain access to contributory benefits such as state pension. For any self-employed individuals with profits between £6,725 and £12,570 they will receive NI credits.

There are several considerations to highlight:

  • It is important that employers update all their payroll systems to reflect these changes. This can involve changes with software updates (for online accounting tools) and administration adjustments.
  • All employees must be kept up to date with these changes (many will not be aware of them). The most popular method for this is to explain the reductions in NI on an employee’s monthly payslip.
  • There can be some special rules that apply for Directors, it is recommended to seek expert accountancy advice to understand these in more details.

In summary all these changes have been designed to help employees take more money home. Whilst also simplifying the tax process for the self-employed and helping to maintain their entitlement to benefits.

If you have any questions regarding national insurance contributions, then our team can offer both help and support. Please call us on 01173 700 079 or e-mail hello@steppingstonesaccountancy.co.uk.

You can also book a free 20-minute call with Yarka – https://calendly.com/yarka-ssa/20min

Reflecting on 2023
Reflecting on 2023 758 513 Stepping Stones Accountancy

Reflecting on 2023

December is always an exciting month; businesses start to slow down and everybody looks forward to a much needed break spending time with friends and family. It is also a perfect time for reflection.

For us here at Stepping Stones it has been another enjoyable year supporting the small business community with all their accountancy needs. We have further cemented relationships with existing clients and have introduced a number of new clients working with them as their in-house accountancy department offering standard compliance services of:

  • Payroll
  • Tax returns
  • Tax planning
  • Bookkeeping
  • VAT returns
  • Year end

We have also seen growth in our management accountancy services, offering more strategic advice within areas of:

  • Business advisory
  • Compliance and incorporation

With so many areas to be positive about we are excited to see what happens in 2024.

Of course, first though we are looking forward to putting our feet up and relaxing. Our offices will be closing on Friday 22nd December 2023 and we will be back open again on Tuesday 2nd January 2024.

Finally, thank you to all our staff, suppliers and clients for their support this year.

We wish you all a Merry Christmas and Happy New Year.

For anybody that does need some accountancy help, please call us on 01173 700 079 or e-mail hello@steppingstonesaccountancy.co.uk. You can also book a free 20-minute call with Yarka – https://calendly.com/yarka-ssa/20min

How Is Payroll Changing | Business Payroll Support | Payroll Help Bristol
How is payroll changing? 758 513 Stepping Stones Accountancy

How is payroll changing?

Change is such an important buzz word at the moment. With the tragic news of the loss of Her Majesty we now see a new King at the helm. Alongside this we have also seen a major change at Number 10 with a new Prime Minister also being introduced.

The political landscape in the UK has been turbulent for several months now and it is hoped that a more settled and calm approach is ahead. As expected, when a new cabinet is introduced, those in charge must try to quickly make a positive impression and change is inevitable.

As an accountancy firm, obviously, we monitor very closely any changes that happen in the Cabinet to make sure that we understand the impacts this may have. Something which has already been identified is a change in payroll. Plans were almost immediately announced for taxes to be cut with a proposal to reverse the increase in NI (national insurance) from November 2022 and scrap the planned increase in corporation tax.

When items such as NI and corporation tax are changed, the implications to payroll can be complex. Staying on top of this from a business perspective is mind boggling and this is where the reliance on specialists, who can translate the jargon into plain English, is so important. We saw in July when the last NI change was introduced what a storm it caused, especially at a time when cost of living rates was justifiably causing concern.

With the proposed reversals and changes, it is inevitable that some problems will be experienced. The key will be to let the experts digest it and then consult with them when needed. A similar concept to when a new piece of software is introduced, first the experts test it, then the features are promoted and finally it is rolled out for all to benefit from.

As the transformations in Government continue to settle over the coming months, the one thing that everybody can be assured of is that change will continue to happen. Our team of specialist accountants will continue to monitor the situations and will keep everybody updated.

If you have any questions or need a little help please call us on 01173 700 079 or e-mail hello@steppingstonesaccountancy.co.uk. You can also book a free 30-minute call with Yarka – https://calendly.com/yarka-ssa/30min

Key accountancy dates to remember 150 150 Stepping Stones Accountancy

Key accountancy dates to remember

In this latest animated video we provide some of the key accountancy dates that everybody should be aware of.

Do I Need An Accountant | Accountant Advice Bristol | Business Accountancy Help
Do I need an accountant? 758 513 Stepping Stones Accountancy

Do I need an accountant?

At some stage, a business owner will inevitably have asked themselves the question, “do I need an accountant”? They will all have also found themselves unsurprisingly faced with the answer, “yes, I do”. No matter what stage your business is at, an accountant can offer help, support and guidance.

From the outset

At the initial start-up phase of a business an accountant can offer support for:

  • Helping to finalise business plans – giving advice and feedback on business direction, goals and funding.
  • Business structure – providing recommendations on how to structure the business to become a sole trader, private limited company, public limited company or limited liability partnership.
  • Licenses – advising what business licenses you need to set-up and what your legal obligations are in relation to monthly, quarterly and annual accounts.
  • Accounting software – advice and recommendation on the best type of software to use along with feedback on what modules would be most beneficial.

Tax and compliance

Throughout the life span of a business there will be a requirement to seek specialist tax and compliance guidance such as:

  • VAT – giving guidance on when to start charging VAT or if already on the scheme whether to continue.
  • Payroll – helping to keep on top of all payroll commitments and ensuring wages / compliance matters are correctly adhered to.
  • Reporting – providing support in relation to tax liabilities, regular reporting processes, creditors, and debtors.

Small business support

All small businesses will benefit from meeting regularly with an accountant. They can assist with:

  • Being smart – having some expert advice on hand to help make smart decisions, especially during key growth stages helps to avoid costly mistakes.
  • Liabilities – as a business grows so does its liabilities, making sure you recognise what these changes will be and how to account for them requires specialist help.
  • The bigger picture – business owners can often become consumed in day-to-day activities and unable to recognise blind spots within the business, an accountant can help with seeing the bigger picture to assist with ongoing growth.

If you are looking for some specialist accountancy support both for you and your business, then please feel free to call us on 01173 700 079 or e-mail hello@steppingstonesaccountancy.co.uk.

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