Academy briefing note
Schools that are considering converting to become an academy are advised to read our briefing note on the subject as there are financial and administrative issues that schools need to be aware of:
The Departments for Education and for Communities and Local Government have also produced a document at a national level for converting academies to read to help them through the process.
End of contracting out
The information confirms the NI categories that will need to be applied for employees in April 2016 following the ending of contracting out. A slightly amended version of the summary was included in an HMRC employer bulletin earlier this year.
Contracting-out of the additional State Pension on a defined benefit (DB) basis will end on 5 April 2016. This means that from 6 April 2016 employees will automatically be brought back into the State Pension scheme and will no longer be able to use a contracted-out salary related (COSR) occupational pension scheme to contract out of the State Scheme.
Employees may, depending on their level of earnings, start to accrue entitlement to the new State Pension instead.
Eligibility for the contracted-out National Insurance contributions (NICs) rebate of 3.4% for employers and 1.4% for employees will also cease from this date. The introduction of the new State Pension will bring with it some changes in what and how you report to HMRC:
From 6 April 2016:
- you will not be able to use your Contracted-out Salary Related (COSR) occupational pension scheme to contract employees out of the new State Pension scheme
- there will no longer be a requirement to report the Employers Contracting-out Number (ECON) and Scheme Contracted-out Number (SCON) details on Full Payment Submission (FPS) for tax years commencing 6 April 2016 and onwards
- there will no longer be a requirement to separate the National Insurance (NI) earnings between the Primary Threshold (PT) and Upper Accrual Point (UAP) & UAP to Upper Earnings Limit (UEL)
- there will be a requirement to report NI earnings between the PT to UEL as there was prior to 2009
- there will be one less column to complete on forms P11 and P60. These forms will be updated in due course and will be available on the Basic PAYE Tools or can be ordered from the Employer order line.
All HMRC systems will be amended to reflect these changes and the UAP data field will be removed from the FPS and Earlier Year Update (EYU).
National Insurance Categories from 6 April 2016
Contracted-out National Insurance tables/categories D, E, I, K, L, N, O and V will be replaced by Standard National Insurance tables/categories A, B, J, M, P, Q, R, T, Y and Z.
National Insurance Categories from April 2015 for employees under age 21
Contracted-out National Insurance categories I, K and V will operate for the 2015-16 tax year only for individuals who are aged under 21 and are in contracted-out employment.
FAQs and Information for your LGPS membership can be accessed as well.
Please read our Information bulletin dated 6 January 2016, it contains several useful web links: