Employers urged to prepare for extra payroll changes

21 July 2008

Businesses should be ready for additional changes to their payroll systems when new personal tax allowances are introduced this September.

The new allowance, which will affect how much some workers receive in their pay packets, is the result of the government’s decision, as a way of compensating people for the abolition of the 10p tax rate, to raise the threshold at which employees become liable to income tax.

Tax professionals are reminding employers to be aware of the changes, which come into effect on 7 September and may cause some confusion.

The new allowance will mean that payroll systems must be updated to accommodate the amended rate.

Depending on how much they earn, a number of employees will see fluctuations in their net pay as the amount of tax deducted in September drops by up to £60 but only by up to £10 in the following months of the tax year.

If you have any questions or concerns about the changes and how they will affect your business, please contact us.