Employer Bulletin – December 2024 edition

HMRC has released the latest bi-monthly issue of its Employer Bulletin, which provides updates on recent changes relevant to employers and agents.

The key topics covered in this edition include:

• NICs Secondary Threshold: From April 6, 2025, to April 5, 2028, the secondary NICs threshold will be lowered from £9,100 to £5,000. After this period, the threshold will increase in line with the Consumer Price Index.
• Increase in Secondary Class 1 NICs: The main rate for employer’s secondary Class 1 NIC will rise by 1.2%, from 13.8% to 15%. Both Class 1A (for benefits in kind) and Class 1B contributions will also increase by the same amount from April 2025.
• Employment Allowance: The Employment Allowance will increase from £5,000 to £10,500 from April 2025. The current restriction, which only allows employers with less than £100,000 in secondary Class 1 NIC liability to claim, will be removed.
• Evidence for PAYE Employment Expenses Claims: As of October 14, 2024, HMRC introduced new evidence requirements for taxpayers claiming PAYE (P87) employment expenses. Employers can assist their employees by sharing the link to HMRC's campaign page at https://dontgetcaughtout.campaign.gov.uk/claiming-expenses/.
• Self-Employed Tax Basis Period Reform: The tax basis period for self-employed individuals has shifted from a ‘current year basis’ to a ‘tax year basis’. Sole traders and partnerships will now need to report their profits on a tax year basis, starting with the self-assessment return due by 31 January 2025 (covering the 2023-24 tax year). Transitional rules are in place.
• Free Cyber Security Toolkit for Small Businesses: The National Cyber Security Centre has developed a new, free toolkit to help small businesses protect themselves from cyber threats. This toolkit is still being developed and can be accessed at https://cybertoolkit.service.ncsc.gov.uk/.