Payroll (Accord)

Release notes

Contents

• Changes/Updates
• ACTION REQUIRED: Employment Allowance
  
  • Employment Allowance changes for 2025/26
  • RTI EPS Employment Allowance changes from HMRC
• ACTION REQUIRED: Employee Workplace Postcode
• ACTION REQUIRED: Statutory Neonatal Care Pay and Leave Support
• Pension Drawdown Payrolls

Introduction

This document contains a summary of the changes for 2025/2026 tax year.

New rates, as published on www.gov.uk will be automatically applied on to your system for the 2025/2026 tax year as soon as you apply the update and roll the system over to the new tax year.

Changes/Updates

Rates and thresholds updated for the 2025/2026 tax year include:

• Income tax thresholds for England, Northern Ireland, Wales, and Scotland
• Student and Post Graduate loan thresholds
• National Insurance limits, thresholds, and rates
• Employment Allowance – increased to £10,500
• Statutory payment rates for all parental leave types and sickness
• Statutory payment compensation rate – increase from 3 % to 8.5%
• National Minimum Wage and National Living Wage
• Scottish Arrestment orders

ACTION REQUIRED: Employment Allowance

Employment Allowance changes for 2025/26

From 6 April 2025, the maximum Employment Allowance will increase from £5,000 to £10,500 for eligible employers. Additionally, the previous restriction preventing employers with a secondary Class 1 National Insurance liability exceeding £100,000 in the previous tax year from claiming the allowance has been removed.

Please check the company is eligible to claim employment allowance. If you have more than one payroll you can only claim Employment Allowance against one of the payrolls. If you are part of a group only one company in the group can claim the allowance.

You will need to check full eligibility criteria with HMRC, https://www.gov.uk/claim-employment-allowance/eligibility.

Companies that are newly eligible for Employment Allowance will need to turn on this functionality for 2025/26.

To do this please set switches 3 switch 23 to 1.

This can be found in Settings -> Miscellaneous -> Parameters, switches 3 tab. This will show employment allowance on the P32 report and allow selection of employment allowance claims on the RTI EPS return, see section below for RTI EPS guidance.

From 6 April 2025, the Employment Allowance will no longer count as ‘de minimis state aid’ (financial support from the government).   

From 6 April 2025, HMRC advise employers claiming Employment Allowance to select data item 203 ‘State aid rules do not apply to Employer’ on the Employer Payment Summary (EPS). 

RTI Data Items 199-202, Employer is in the agriculture sector, Employer is in the fisheries and aquaculture sector, Employer is in the road transport sector, Employer is in the industrial / other sector. These data items are not required in the tax year 2025-26, we will remove them from the user interface in a later release. For now, you do not need to tick them from 2025/26 onwards.

In summary if claiming Employment Allowance in 2025/26 onwards you should select Employment Allowance Indicator and State aid rules do not apply to Employer on the EPS Data and Checklist page of the EPS creation dialog.

ACTION REQUIRED: Employee Workplace Postcode

For 2025/26 onward, reporting of employees of Freeports and Investment Zones requires an employee workplace postcode to be entered into the RTI FPS return.

If you have used a NI category letter 'F', 'I', 'L', 'S', 'N', 'E', 'D' or 'K' for an employee, HMRC requires you to supply the workplace postcode where the employee works.

To support this RTI FPS reporting requirement Ciphr Payroll has been extended in the following areas for data entry:

• Employee Enter/Adjust – Tax/NICs tab

• Employee Table
• Employee Import

The employee's workplace postcode will be included in the RTI Journal as part of the standard payroll workflow and can also be edited directly within the RTI Journal. When generating an RTI FPS return, the employee's workplace postcode will be automatically included if it exists in their RTI Journal.

ACTION REQUIRED: Statutory Neonatal Care Pay and Leave Support

To pay Statutory Neonatal Care Pay please create 205000 SNCP Pay wage type as shown below paying special attention to copy the values in the fields in red boxes.

The wage type can be entered on the employee entry form on Transactions or Fixed Wage Types pages.

The Statutory Neonatal Care Pay is a recoverable at statutory rates amount and will automatically be shown on the following payroll reports:

• Calculation Results
• Payroll Run Details Report
• P32 Reports
• P35 Reports
• FPS Submission Employee YTD Summary Report
• RTI Submission PAYE Scheme YTD Summary Report 

WARNING: Accumulator 15 is now used for the Neonatal calculation result storage.

For a small number of systems this accumulator could have been used for another calculation in 2024/25, it will need to be moved to a different accumulator for 2025/26. When running Reset Accumulators in the end of year processing, the system will detect if your system is in this scenario and will display a warning message. In the unlikely event that you get this warning message, please pause your end of year processing, and contact Customer Care.

Pension Drawdown Payrolls

2025/26 introduces two new Pension Drawdown income types that can be reported via RTI. “Pension commencement excess lump sum” and “Stand alone lump sum”.

These are supported by new pension drawdown wage types, calculation support, RTI Journal updates, and RTI FPS creation for reporting to HMRC.

For more detailed information on these wage types and how to add them to your pension drawdown payroll system, please contact Customer Care.