The latest in payroll news from HM Revenue and Customs including Tax Free Childcare, Child Benefit and Protecting State Pension, Parental Bereavement Leave and Pay, and the new National Minimum and National Living Wage

Tax Free Childcare
Are you and your employees missing out on Tax-Free Childcare?

For many working parents, childcare costs can play a large role when planning a return to work, or considering their career options and working hours.

Tax-Free Childcare is a government scheme that can help, as eligible parents could get up to £2,000 per child, per year to spend on qualifying childcare.

Parents are usually eligible if they (and their partner, if they have one) are;
• in work or planning to return to work within 31 days
• each earning, on average, at least the National Minimum Wage for 16 hours a
week, currently £125.28 if they’re 25 or over.

You don’t need to do anything, but telling your employees about Tax-Free Childcare
could:
• help them with their childcare costs
• help their return to work
• help them work more hours, if they want to
• help you retain staff you’ve invested in.

For more information visit www.childcarechoices.gov.uk

Child Benefit and Protecting State Pension

We would like to take the opportunity to remind all parents of the importance of making a claim for child benefit regardless of income levels to make sure they don’t miss out on some important benefits for them and their child.

If parents are part of couple and one of them works and pays National Insurance contributions (NICs) and the other one stays at home to care for a child, the person who is not paying NICs can protect their State Pension by completing the Child Benefit form. Completing the form also helps a child to automatically get their National Insurance Number at 16.

For parents where one or both have an individual income of more than £50,000 they may be liable for the High Income Child Benefit Charge (HICBC), a tax charge on the Child Benefit payments received. The person who pays the tax charge could be different to the person receiving payments.
Some people may decide not to receive the payments to avoid paying the charge.

Either way it is important people fill in and send us the Child Benefit form even if you decide not to get Child Benefit payments to protect their entitlement to the State Pension and to help their child receive their National Insurance Number at 16.

You and your partner both have an individual income of less than £50,000
You will not need to pay the tax charge. If your or your partner’s income goes over £50,000 in any year, check if you have to pay the tax charge.
https://www.gov.uk/child-benefit-tax-calculator.

The person with the highest income has income between £50,000-£60,000

If you or your partner decide to get Child Beneft payments, the person with the higher income must notify HMRC by registering for Self-Assessment to pay the tax charge each year. It will be less than the amount of the Child Beneft you get. The tax charge will not apply if you decide not to get Child Beneft payments (select “no” on question 68).

The person with the highest income has income of more than £60,000

If you or your partner decide to get Child Beneft payments, the person with the higher income must notify HMRC by registering for Self-Assessment to pay the tax charge each year. It will be the same as the amount of the Child Benefit you get. The tax charge will not apply if you decide not to get Child Benefit payments (select “no” on question 68).
More information on Child Benefit and the High Income Child Benefit Charge can be found on GOV.UK; https://www.gov.uk/child-benefit  and https://www.gov.uk/childbenefit-tax-charge.

New entitlement to Parental Bereavement Leave and Pay
The Government is introducing a new workplace right to Parental Bereavement Leave and Pay for parents who lose a child under the age of 18, including those who suffer a stillbirth from 24 weeks of pregnancy.

The Parental Bereavement (Leave and Pay) Act gained Royal Assent in September 2018.
Work is underway to get the Regulations ready to be laid before Parliament in 2019, with the intention that they will apply from the common commencement date of 6 April 2020.

During the Act’s passage through Parliament, the Government consulted on several key aspects of the policy to be set in Regulations. The Government published its response to the consultation on 2nd November 2018.

Read the full response here:
https://www.gov.uk/government/consultations/parental-bereavement-leave-and-pay

Who will be entitled?
Employed parents who lose a child under the age of 18 (or those who suffer stillbirth from 24 weeks) will be entitled to 2 weeks of Parental Bereavement Leave as a ‘day-one’ right. Those with at least 26 weeks continuous service at the date of their child’s death and earnings above the Lower Earnings Limit will also be entitled to Parental Bereavement Pay, paid at the statutory flat weekly rate of £145.18 (or 90% of average earnings, where this is lower).

The definition of a ‘bereaved parent’ is guided by the principle that those who are the ‘primary carers’ of the child should be the focus of the entitlement. The entitlement will apply to the child’s ‘legal’ parents; individuals with a court order to give them day-to-day responsibility for caring for the child; and primary carers who do not have legal status, such as kinship carers.

In all cases, eligibility will be based on facts that will be clear to both the employee and their employer in order to minimise confusion.

How can the leave and pay be taken?
Eligible parents will be able to take both the leave and pay as either a single block or one or two weeks, or as two separate blocks of one week of leave and/or pay (taken at different times).
The employee will have 56 weeks from the date of their child’s death in which to take the entitlement so as to allow parents to take the leave (and pay) at important moments, such as anniversaries, if they wish.

What notices will be required?
Leave
No prior notice will be required for leave taken very soon after the death. This will apply for a set number of weeks, in recognition that employees are likely to need to take leave at little or no notice. Employees will, however, be required to tell their employer that they are absent from work – informal notification will be acceptable.
If leave is taken at a later point in time, a notice requirement will apply. The proposed notice period is at least one week.
Pay
Prior notice will be required for Parental Bereavement Pay irrespective of when the pay is taken. This is in order to give employers time to process the request.

What will the evidence requirements be?
The Government is considering whether employers should be able to request evidence of entitlement to Parental Bereavement Leave where an employee is required to give notice (i.e. where the leave is taken at a later date). Where they do, the Government proposes that this should be in the form of a written declaration that the employee meets eligibility criteria for leave (this is the approach used for Paternity Leave and Pay).
This means that employers will not be able to ask parents for evidence of the child’s death (e.g. they will not be able to ask for a copy of the death certificate) nor of their relationship with the child.

However, when an employee needs to take time off work to grieve very soon after the death of their child, they will not be required to provide a written declaration before going on leave or subsequently. There will be no obligation on employers to ask for this information, and no obligation on employees to provide it (i.e. it will not be part of the eligibility requirements).

For Parental Bereavement Pay, a written declaration will always be required from the employee in order to safeguard employers and the Exchequer from potential abuse, as is the case for other family related pay entitlements.
The Parental Bereavement (Leave and Pay) Act 2018 applies only to Great Britain.

At the current time, no legislation to introduce parental bereavement leave or pay has been introduced in Northern Ireland, therefore, the measure will not apply in Northern Ireland.

Get ready for the increase in the National Minimum and National Living Wage on 1 April

The National Living Wage, the statutory minimum for workers aged 25 and over, will be increasing by 4.9% to £8.21 per hour. Rates for younger workers will also increase above inflation and average earnings. The new rates will apply from 1 April 2019.

The minimum wage that your staff are entitled to depends on their age and whether they are an apprentice.
As the minimum wage increases more employers than ever will be directly affected, including some of those who currently pay above the minimum.

Check out the new rates to see if they impact your business.

For more information, please visit here.