Tax
rates and limits are stored for calculations and the PAYE module:
Pension
Limits
The
Annual Allowance is the limit for contributions and other pension inputs for a
tax year, before the Annual Allowance Charge applies e.g. £255,000 for
the tax year ended 5th April 2011.
The
Lifetime Allowance is the limit for benefits, above which the lifetime
allowance tax charge is levied e.g. £1.8m for the tax year ended 5th
April 2011. This is used in the BCE calculations.
Lifetime
Allowance Charges
There
are tax charges when benefits crystallise after the lifetime allowance has been
fully used. For benefits taken as pension the rate from 2006 was 25% and for
benefits taken as a lump sum the rate from 2006 was 55%.
These
rates are used in the BCE calculations.
Income
Tax Rates
These
rates are used by the PAYE module, if you subscribe to it.
The
personal allowance is just stored for reference. When calculating PAYE, the
personal allowance will be taken into account in the tax code allocated to each
individual e.g. 1185L.
From
April 2018, the Scottish rates of tax are also included. The earnings bands for
each rate are stored (as opposed to the thresholds). The exception to this is
that additional rate is shown for earnings the threshold (e.g. £150,000
in 2018) because there is no upper limit.
If
a pensioner is resident in Scotland, HMRC will issue a tax code that reflects
this, starting with ‘S’ e.g. S1185L. Omni will recognise this and
use the Scottish rates and bands to calculate the PAYE due.
Similarly,
from April 2019, the Welsh rates of tax are also included and if a pensioner is
resident in Wales, HMRC will issue a tax code that reflects this, starting with
‘C’. Even though the Welsh Parliament have stated that the bands
and limits will be the same as England and NI for a few years, it is important
that the bands are entered to deal with those members allocated a ‘C’
code.