UK payroll legislation & compliance

In case you were unaware, payroll departments have a certain set of legislative guidelines to follow, of which are put in place by the government. This is to ensure that best practise is followed and that businesses are running payroll in a correct and legal fashion, and also so employees are taxed at the right rates – among many other reasons. In this article, we briefly explain the UK payroll & compliance legislation for tax year 2021/2022. Each tax year presents an update in UK payroll legislation, so ensure you revisit this subject before each new quarter.

What is the UK payroll legislation?

Payroll legislation & guidance exists to make sure businesses remain compliant. The legislation talks about a vast amount of subtopics which affect every type of tax – for example, the introduction to IR35 for contractors and a change in tax-free childcare for the self-employed.

What are the payroll legislation & compliance guidelines for 2021/2022?

  1. No changes to income tax or National insurance due to the effects of Covid-19 on employment;
  2. Personal income tax is frozen at £12,570;
  3. Possible change to the tax year end – from April 5th to either March 31st or the end of the calendar year. The Office for Tax Simplification (OTS) thinks it may benefit the way accounting systems work, payroll was organised this way historically);
  4. The introduction of IR35 – whereby employers decide whether contractors are classed as employed or self-employed, and are taxed accordingly.

Ask the experts: Learn more about payroll legislation today

For further information on the changes in payroll legislation & compliance for this year or next, kindly get in touch with our qualified accounts today. We are always happy to explain any tough legislation to you.