National Payroll Week

September 7th – 11th is National Payroll Week (NPW). This has been devised as a way to acknowledge the impact that payroll has not only on businesses but also its contribution to the UK economy. Almost half of all tax revenue received by Her Majesty’s Government is collected via the payroll, either as Income Tax or National Insurance contributions.

National Payroll Week 2015

Each year there is a specific theme for NPW and in 2015 it is “It pays to learn.” The aim is to focus on and encourage payroll professionals to think of ways that they can help to improve the financial understanding of people working within their companies and thereby improve their overall financial wellbeing. This has the potential to significantly increase the engagement of your employees as you are seen to actively support them and their understanding of finances; for example encouraging them to save via the payroll to a credit union.

In the spirit of continued learning, the Chartered Institute of Payroll Professionals shared some facts about tax as part of NPW:

  • The word ‘tax’ is from the Latin taxo, meaning “I estimate”
  • The current system of National Insurance has its roots in the National Insurance Act 1911 which introduced the concept of benefits based on contributions paid by employed persons and their employer
  • There were two schemes running alongside each other, one for health and pension insurance benefits (administered by “approved societies” including friendly societies and some trade unions) and the other for unemployment benefit which was administered directly by Government
  • The recording of the contributions required the employer to buy special stamps from a Post Office and affix them to contribution cards. and the cards formed proof of entitlement to benefits and were given to the employee when the employment ended, leading to the loss of a job often being referred to as being given your cards, a phrase which endures to this day although the card itself no longer exists
  • 2014-15 raised PAYE Income Tax receipts totalled £139,506 million

A few other facts:

  • Including surcharges, higher rate Income Tax reached a high of 99.25% during the Second World War
  • In 1974 the highest tax rate on earned income was 83% and on income from investments was 98%
  • In 1976 the Basic Rate stood at 35%, by 2007 this had been reduced to 20% – a reduction of 43%. Unfortunately this reduction has been largely offset by increases in other taxes such as Value Added Tax (VAT)

 

To find out more about NPW 2015 go to http://www.cipp.org.uk/en/cipp-events/national-payroll-week/

 

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Balmer Accountancy

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