As part of the UK payroll year end software release, we've added some new rates and made the following software changes:
P60s
HMRC introduced a new template for the 2024/25 tax year P60s, which we've preloaded into PeopleXD Payroll.
RTI
We've updated the RTI FPS Schema and RTI EPS Schema to reflect the 2024/25 changes. These updates automatically link to the tax year the payroll company is in, so there's nothing you need to do.
Other RTI changes
Workplace post code
Starting April 2025, you need to report the workplace postcode for employees with NI letters F, I, L, S, N, E, D, or K via the RTI FPS.
Update the system and record the workplace postcode for any employee with one of these NI letters under the Employee Parameters screen.
📌Note: The RTI validation report now includes a check, and any employee who fails will be highlighted in the validation messages.
To add an employee post code, follow the steps below in portal.
Click Manage Payroll then highlight the relevant pay group.
Click Outputs then click RTI.
Click Generate File.
From the File Type dropdown list, select FPS.
From the FPS Type dropdown list, select Normal FPS.
From the Pay Group dropdown list, select the relevant pay group.
Click Employee Parameters then click ADD.
Fill the relevant following fields:
Employee
Workplace Post Code Prefix.
Workplace Post Code Suffix.
Click Save.
Married Women NI Letter
HMRC has introduced a new validation in the RTI return to prevent using NI Letters B, E, I, or T for employees born after 5 April 1961. Starting April 2025, the Full Payment Submission (FPS) will trigger an error on the exception report if an employee’s NI Class is B, E, I, or T and their birthdate is after 5 April 1961.
This update ensures compliance with national Insurance regulations by blocking invalid NI Class assignments based on age.
Pension Lump Sums
Two new flexible drawdown reporting options are now available for stand alone lump sum and pension commencement excess lump sum payments. To make such payments, you need to identify the pay code(s) used for these payments. To do this, follow the steps below in portal.
Click Settings then under UK Tax Rates, click General.
Click RTI then from the Select Detail drop-down menu, select Payment Pay Codes.
Enable the toggles on the relevant pay codes.
Depending on the payment type, turn on either the Flex Payment Taxable or Flex Payment Non-Taxable indicator.
Enable the appropriate flexible drawdown pay code indicator:
Pension Commencement Excess Lump Sum Payments
Stand Alone Lump Sum Payments
Click Save.
This update enhances flexibility in managing and reporting pension lump sum payments while ensuring compliance with RTI requirements.
Statutory neonatal care leave or pay
Statutory neonatal care pay and leave is now available for parents whose child requires neonatal care within the first 28 days after birth. Eligible employees can receive up to 12 weeks of statutory pay and leave, processed similarly to other statutory payments like parental bereavement pay and leave.
This benefit is available from an employee’s first day of work. Employers should review their leave types to determine if a new category is needed.
A new Statutory Neonatal Parameters section has been added, where users need to set the payment pay code and the recovery percentage (92%). Payments are made via timesheets, and recovery is automatically calculated in the HMRC EPS file once the parameters are set.
To configure the SNCP pay code and recovery percentage, follow the steps below in portal.
Click Settings then under UK Tax Rates, click General.
From the SNCP Pay Code dropdown menu, select the relevant SNCP pay code.
In the SNCP Recovery Percentage field, enter 92%.
Click Save.
National insurance & employment allowance changes
On 30 October 2024, the government announced changes to National insurance contributions (NICs), secondary class 1 rate, employment allowance (EA) effective from 6 April 2025. These include:
Lowering the NICs secondary threshold from £9,100 to £5,000, with a freeze until 5 April 2028 and CPI-based increases from 6 April 2028.
Raising the Secondary (Employer) Class 1 NICs rate from 13.8% to 15% for earnings paid from 6 April 2025 through the 2025-2026 tax year.
Increasing the EA from £5,000 to £10,500.
Removing the EA restriction that prevents employers with over £100,000 in secondary Class 1 NICs liability in the previous tax year from claiming it.
P11D
Schema
We've updated the P11D Schema to reflect the 2024/25 changes. These updates automatically link to the tax year the payroll company is in, so there's nothing you need to do. The changes are:
Area | Changes |
F |
|
H |
|
M |
/IRenvelope/ExpensesAndBenefits/P11D/Other/Class1A/Desc to /IRenvelope/ExpensesAndBenefits/P11D/Other/Class1A/Other |
P11D(B) |
|
P11D Class 1A NIC
The Class 1A NIC rate is now 15.0%. You need to update this manually after generating your P11D for the previous year. To do this, follow the steps below.
📌Note: If you need to generate a P11D for the previous tax year, revert the rate to 13.80% before proceeding.
Click Settings then click System Configuration.
Click General then edit the P11D section.
Payroll benefits
As part of the autumn budget 2024, the government confirmed that reporting benefits in kind through RTI will be mandatory from april 2026. More details are available in the government website.
You should assess the impact of this change and familiarize yourselves with existing benefit management features in the XD system:
Software updates are expected, particularly for the new end of year correction process outlined by HMRC. We will provide further updates as HMRC releases more details.