Statutory Changes for New Tax Year (2025-2026) in Cintra iQ

Statutory changes have been released on Cintra iQ in time for the new tax year.

These changes bring updates, particularly in Employer National Insurance, Employment Allowance, and new Statutory Neonatal Care Pay and Leave.

Employer National Insurance

As per the Autumn Budget announcement, the Employer National Insurance had two major changes due to take effect from April 2025:

1. A decrease to the Employer Threshold from £9,100 to £5,000.

2. An increase to the main rate of Employer NIC from 13.8% to 15%.

Employment Allowance

The same budget brought an increase in Employment Allowance from £5,000 to £10,500. 

The restriction where employers who have incurred a secondary Class 1 NICs liability of more than £100,000 in the previous tax year, has been removed. You still need to be aware of other eligibility criteria and connected company rules, before making the claim.

Cintra iQ has been enhanced to support the handling of Employment Allowance. Take look at this link to find out more: Changes to Employment Allowance on Cintra iQ - The Avengers Team - Confluence (atlassian.net)

Statutory Neonatal Care Pay and Leave

This new statutory pay and level supports employees who need time off work to care for a baby that has been admitted to neonatal care.

The key points include:

• this leave is an addition to other leave and pay entitlements

• can be taken in full weeks up to a maximum of 12 weeks

• applies when the child enters neonatal care within 28 days of birth and stays in that care for at least 7 days.

• each parent is entitled - the 12-week limit is not shared.

• neonatal care pay does require continuity of employment and earnings test but the leave is a day one right.

For guidance on processing Neonatal Pay, see:

Statutory Neonatal Leave and Pay

Small Employers' Relief

Those employers that paid £45,000 or less in Class 1 National Insurance (excluding Employment Allowance) in the last complete tax year can qualify for Small Employers' Relief. 

From 6th April 2025, this compensation rate increases from 103% to 108.5% for Statutory Parental Payments.

Workplace postcode mandatory for Freeport and Investment Zone National Insurance letters

From April 2025, HMRC intends to reject an FPS if a Freeport (F, I, L, S) or Investment Zone (N, E, D, K) NIC category letter is reported for employment, but does not contain the workplace postcode for any qualifying employees. 

When you select one of those NI letters for your employees, you will be prompted to provide the workplace post-code.

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Rates and thresholds for employers 2025 to 2026

To find out more about the rates and thresholds for the new tax year, go to gov.uk website: Rates and thresholds for employers 2025 to 2026 - GOV.UK (www.gov.uk)