Academy Training Payroll Pulse – June Edition

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Academy Training Payroll Pulse – June 2026 Edition

Academy Training Payroll Round-Up – June 2026
Sunshine, Statutory Updates and Salary Sacrifice Surprises
June has arrived, and payroll professionals across the UK are balancing sunshine with statutory changes, pension reforms, mileage updates and a healthy amount of HMRC guidance.

As always, payroll never stands still.

This month has brought some particularly important updates for employers, payroll teams and apprentices alike, especially around mileage rates, pensions, duplicate payroll records and the ongoing rollout of the Employment Rights Act reforms.

Let’s break it all down.

Mileage Rates Have Changed — Again!
One of the biggest talking points this month has been the increase to Approved Mileage Allowance Payments (AMAPs).

From 6 April 2026:
• The first 10,000 business miles can now be reimbursed at 55p per mile
• Mileage above 10,000 miles remains at 25p per mile

Importantly, this applies to the date the miles were driven, not when the payment was made.

This has caused a fair bit of confusion for employers processing retrospective mileage claims. HMRC has now confirmed that businesses can make backdated “top-up” payments for mileage already reimbursed at the old 45p rate without triggering tax or National Insurance deductions, provided the payment does not exceed the approved rates.

Payroll professionals everywhere collectively breathed a sigh of relief.

A useful reminder:
• AMAPs apply to employees using their own personal vehicles
• Advisory Fuel Rates (AFRs) apply to company cars

Speaking of AFRs…

New Advisory Fuel Rates from 1 June 2026
HMRC has also updated the Advisory Fuel Rates used for company cars.

Some of the new rates include:
Petrol
• Up to 1400cc — 14p
• 1401cc to 2000cc — 17p
• Over 2000cc — 26p

Diesel
• Up to 1600cc — 15p
• 1601cc to 2000cc — 17p
• Over 2000cc — 23p

Electric Cars
• Home charging — 7p
• Public charging — 15p

The split electric charging rate is particularly important now that many hybrid workers charge partly at home and partly at public stations.

Remember, employers can continue using previous rates for up to one month after the update takes effect.

Multiple Jobs? HMRC Wants Employees to Understand Their Tax Codes
HMRC has launched new guidance explaining how tax works for people with multiple jobs or income sources.

This is a really useful educational push because many employees still believe they receive a separate Personal Allowance for every job they have.

Unfortunately, HMRC disagrees with that dream.

The standard Personal Allowance remains £12,570 for 2026/27 and is usually allocated to only one source of income.

Additional jobs often receive:
• BR tax codes (20%)
• D0 tax codes (40%)
• D1 tax codes (45%)

Payroll teams may notice an increase in employee queries as awareness grows, particularly around:
• Starter Checklists
• P45s
• Secondary employment tax codes
• Scottish and Welsh tax differences

This is a great opportunity for payroll professionals to educate employees and promote Personal Tax Accounts.

Duplicate Payroll Records — HMRC Issues Warning
HMRC has issued a very important reminder regarding payroll software migrations.

Duplicate employment records are increasingly being created when:
• Payroll IDs are changed incorrectly
• Start dates are added unnecessarily
• Payroll ID change indicators are not ticked

The result?

Incorrect year-to-date figures, employee confusion, and extra work for payroll teams trying to untangle everything afterwards.

HMRC’s key advice:
• Always use the payroll ID change indicator
• Include old and new payroll IDs
• Leave the start date blank for continuing employees
• Never recycle payroll IDs from former employees

Payroll professionals know there are few things more terrifying than duplicate records appearing in RTI submissions on a Friday afternoon.

Big Pension Changes Continue
June has also been huge for pensions.

Pension Schemes Act 2026 Receives Royal Assent
The new Pension Schemes Act 2026 aims to overhaul pension saving across the UK and could affect more than 22 million savers.

Some major reforms include:
• Automatic consolidation of small pension pots
• New “value for money” checks
• Creation of pension “megafunds”
• Greater retirement flexibility
• Better pension tracking for employees

The government believes these reforms could improve retirement outcomes significantly over time.

Payroll professionals should note:
• Automatic enrolment duties remain unchanged
• Payroll pension processing remains critical to compliance

Salary Sacrifice Pension NIC Cap Confirmed
The National Insurance Contributions (Employer Pensions Contributions) Act 2026 has also received Royal Assent.

From April 2029:
• NIC savings on salary sacrifice pension contributions will be capped at £2,000 annually

This could significantly affect mid-range earners and employers using salary sacrifice pension arrangements.

Payroll software providers are likely already reaching for the coffee.

Local Government Pension Scheme (LGPS) Reforms
Changes to the LGPS in England and Wales came into effect from 1 April 2026.

Key updates include:
• Short unpaid absences up to 14 days remaining pensionable
• New QAPA arrangements replacing previous APC processes
• Improved pension protection during family-related leave
• Extended windows for buying back lost pension contributions

These reforms aim to make pension outcomes fairer, particularly for employees affected by unpaid family leave.

Payroll and HR teams working with local authority employees should ensure systems and communications are updated accordingly.

Employment Rights Act 2025 — Important Timeline Change
There has been some misinformation circulating regarding Employment Rights Act implementation dates.

The government has now confirmed that:
• “Fire and rehire” reforms originally expected in October 2026 have been delayed until 2027

However, October 2026 still brings substantial changes, including:
• Stronger sexual harassment prevention duties
• Employer liability for third-party harassment
• Extended employment tribunal claim deadlines
• New trade union rights
• Updated tipping consultation requirements

The legislation continues to evolve, so payroll and HR professionals should keep monitoring developments carefully.

Small Employers Relief Reminder
Eligible small employers can now reclaim:
• 100% of statutory parental payments PLUS
• An additional 9% compensation

That means qualifying employers can recover 109%.

This applies to:
• SMP
• SPP
• SAP
• ShPP
• SPBP
• SNCP

The £45,000 Class 1 NIC threshold remains unchanged.

One important reminder: Statutory Sick Pay still cannot be reclaimed.

SSP Confusion Continues
Speaking of SSP…

Since the major SSP reforms introduced in April, payroll professionals have identified an issue with employees who have:
• Zero Average Weekly Earnings
• But are not new starters

The updated SSP1 form currently does not contain an option covering this scenario.

The Department for Work and Pensions has confirmed the issue is under investigation and updated guidance is expected.

P11D Changes for Ceased Businesses
HMRC has confirmed that employers who stop trading during the tax year may now submit paper P11D and P11D(b) forms directly to HMRC.

This is a practical and welcome change, particularly for:
• Insolvency practitioners
• Businesses closing mid-year
• Employers without ongoing payroll software access

It should help reduce late filing penalties and simplify final PAYE obligations.

Payroll Riddle Time!
Last Month’s Answer
“What runs every month, follows strict deadlines, causes panic if forgotten, but nobody notices when it works perfectly?”

Answer: Payroll!

Very accurate, really.

June Payroll Riddle
I can be gross or net, I rise but can also shrink, Employees love to receive me, And payroll teams double-check me before they blink.
What am I?

We’ll reveal the answer in next month’s Academy Training Payroll Round-Up.

Final Thoughts
June has shown once again that payroll is about far more than simply pressing a button.

Payroll professionals are now balancing:
• Legislative reform
• Pension complexity
• Employee wellbeing
• Real-time reporting
• Tax education
• System compliance
• Financial accuracy

All while trying to ensure everyone gets paid correctly and on time.

Not bad for a profession some people still think is “just wages”.

See you next month for another payroll-packed update.

From all of us at Academy Training.