Category Archives: Payroll

Employee contracts & staff handbooks

Do you have employment contracts in place for your employees?  Do you have a staff handbook outlining your company’s policies and procedures?

If the answer is no, or if your contracts aren’t up to date, then we are pleased to be able to offer a new service to help you meet your legal obligations in this area.

Employee contracts 

Most employees are legally entitled to a written statement of the main terms and conditions of their employment, such as pay, working hours and holiday entitlement, within two calendar months of starting work.  https://www.gov.uk/employment-contracts-and-conditions/written-statement-of-employment-particulars

Staff handbook

Additional information regarding general conditions of employment, such as sick leave, pensions, grievance procedures, etc. can be provided in a staff handbook.  The handbook allows you to outline your policies and procedures in more detail and provides all parties with clear guidelines should any issues arise.

Not having these documents in place can leave employers exposed to disputes over pay and conditions resulting in disgruntled employees, difficulties in recruiting and potentially expensive employment tribunal claims.

How we can help 

We can now provide you with up-to-date, legally compliant employment contracts and staff handbooks at an affordable price.

The cost

Our fee structure for this new service is as follows:

12 months subscription, to include 4 employee contracts plus staff handbook with unlimited updates to cover any changes in employment law – £160

Additional contracts – £40 each

For more information please contact us.

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Payroll changes for the 2018 / 2019 tax year

With a new tax year fast approaching there are some key changes to be aware of:

  • the tax free personal allowance will increase to £11,850 and the new emergency tax code will be 1185L.
  • the National Living Wage NLW (for those aged 25 & over) will increase from £7.50 to £7.83.
  • the National Minimum Wage NMW will increase as follows:
Employees aged 21-24 – from £7.05 to £7.38
Employees aged 18-20- from £5.60 to £5.90
Employees aged under 18- from £4.05 to £4.20
Apprentices aged under 19, or aged over 19 in the first year of their apprenticeship – from £3.50 to £3.70 
  • the minimum contribution rates for workplace pension schemes will increase to 5%, with a minimum of 2% employer contribution.  (eg. employer 2%, employee 3% contribution)
  • Statutory Sick Pay will increase from £89.35 per week to £92.05 per week.
  • Statutory Maternity, Paternity, Adoption and Shared Parental Pay will increase from £140.98 per week to £145.18 per week.
  • the repayment threshold for student loans will increase as follows:
    Plan type 1 loans from £17,775 to £18,330
    Plan type 2 loans from £21,000 to £25,000

Please do not hesitate to contact us if we can help you meet your payroll and workplace pension duties.

Do you understand how new pension laws affect your business?

In a recent press release The Pensions Regulator urged small and micro employers to check how auto enrolment affects them. It comes at a time when quarterly figures show a rise in the number of non compliance penalties being issued.

The penalties for non compliance are sizeable and can include a fixed £400 penalty and an escalating penalty of £50 to £10,000 per day depending on number of staff.

The Pensions Regulator detailed two employers who were fined £400 when they did not comply with their duties after failing to understand how the law affected them:

  • A garage owner failed to complete a declaration of compliance as they thought a staff member had done it.
  • A travel agent with no staff eligible for automatic enrolment failed to complete other duties such as completing their declaration of compliance after wrongly assuming the law did not apply to them.

The good news is that Grant & Co can help. Whether you need just a little assistance to meet your new duties, or a fully comprehensive service, our value for money solution can be tailored to meet your exact needs. We can:

  • Introduce you to our experienced payroll team who will ensure the smooth transfer of your payroll scheme to our systems
  • Assist with choice & set up of a compliant pension scheme
  • Assess your workforce
  • Calculate your costs
  • Handle statutory staff communications
  • Enrol your staff into your chosen pension scheme
  • Calculate & report pensions contributions
  • Complete The Pensions Regulator declaration of compliance
  • Manage your ongoing employer duties

Call us today for a free, initial consultation.

Voluntary payrolling of benefits in kind

As the 6 July deadline for filing forms P11D, P9D and P11D(b) passes for this year, HMRC is consulting on the introduction of a voluntary system of payrolling benefits in kind.

The government believes that payrolling benefits in kind instead of submitting forms P11D can offer substantial administrative savings for some employers and wishes to create a system that will enable employers to do so if they wish.  In particular three priority areas for consultation are:

  • private use contributions for company cars and fuel,
  • private medical and gym membership fees, and
  • one-off large benefits through transfers of assets.

The consultation document can be found here and the consultation closes on 9 September 2014.  HMRC are particularly keen to hear from employers who already have payrolling in place.

After the introduction of RTI and the additional burden of Workplace Pensions and Auto-enrolment we wonder if this move will be welcomed or just add further strain to increasingly stretched payroll departments.

If you would like further information on how to handle expenses and benefits, or would like to know how we can help you with our Payroll and Auto-enrolment service, please do get in touch.

 

 

PAYROLL NEWS

KEY CHANGES for the 2014 / 2015 TAX YEAR

 Income Tax Allowances

 The basic personal allowance for 2014-15 increases to £10,000 and the tax code for emergency use will be 1000L.

 Income Tax bands and rates

 The tax bandwidths for 2014-15 are as follows:

 Basic rate = 20%                           £1 to £31,865

 Higher rate = 40%                £31,866 to £150,000

 Additional rate = 45%          £150,001 & above

 NICS

 The Lower Earnings Limit, the amount of earnings which allow an employee to qualify for certain state benefits, increases to £111 per    week (£5772 per annum). 

 The Primary Threshold, above which employees begin to pay National Insurance, increases to £153 per week.  The main rate of    Class1 NIC’s due on earnings above this threshold and up to the Upper Earnings Limit remains unchanged at 12%.

 The Upper Earnings Limit increases to £805 per week.  The additional rate of employee Class 1 NIC’s on earnings above this point  remains unchanged at 2%.

 The Secondary Threshold, above which employers Class 1 NIC’s become due, increases to £153 per week.

 The Class 1 employer rate of NIC’s remains unchanged at 13.8%.

 Statutory Payments

 The Statutory Sick Pay (SSP) rate increases to £87.55 per week. 

 From 6 April 2014 employers are no longer able to recover any SSP from HMRC.

 The weekly rate for Statutory Maternity Pay (SMP), Ordinary Statutory Paternity Pay (OSPP), Additional Statutory Paternity Pay (ASPP) and Statutory Adoption Pay (SAP) increases to £138.18.

 REAL TIME INFORMATION

 From 6 April 2013 it became compulsory for the large majority of employers to begin reporting PAYE information to HMRC in real time – known as Real Time Information or RTI.  The system hasn’t been without its teething problems with HMRC admitting glitches that required fixing. 

 Payroll year end will feel a bit different this year, with employers no longer required to file a P35 Employer Annual Return and associated P14s.  Instead generally it should be as simple as marking your final RTI return for 2013/14 as being the ‘Final Return’, completing the end of year questions and declarations and providing P60’s for your employees.  Further guidance can be found at www.hmrc.gov.uk/payerti/end-of-year/tasks.htm.

 Changes in RTI reporting for the 2014/15 tax year include the addition of an extra banding in reporting the hours worked by your employees and the introduction of a field for indicating the reason for any late reporting of RTI.

 Under RTI employers are no longer required to submit new starter forms P46 or P45 Part 3.  Instead HMRC have introduced Starter Checklists to help employers gather the information required to be reported the first time you pay your employee, which is done via the FPS.  These can be found  at http://search2.hmrc.gov.uk/kb5/hmrc/forms/view.page?record=kPZMkDs75qQ&formId=7377.

 Penalties

 New in-year penalties for late filing of RTI and late payment of PAYE/NI were due to be introduced from this April, however HMRC announced that, to allow more time to adapt to reporting in real time, employers won’t be charged late filing penalties as long as they bring themselves fully up to date by 5 October 2014 and that automatic late-payment penalties won’t be introduced until April 2015.  However, from April 2014 HMRC will charge interest on any in-year payments not made by the due date.

 NICs Employment Allowance

 In the Budget 2013 the Chancellor announced the creation of a new Employment Allowance, allowing the majority of businesses and charities a reduction of up to £2000 in their employer Class 1 NIC liability each year.  The allowance will be claimed as part of the normal payroll process via RTI reporting.  The Employment Allowance will be offset against employers Class 1 NICs when they become due, until either the full £2000 allowance is used up or the tax year ends, whichever is soonest.

 WORKPLACE PENSIONS and AUTO ENROLMENT

You will no doubt have read in the Press and seen on the TV news about Workplace Pensions and Auto-enrolment.  This change in law will see every employer in the UK required to help more of their workers save for retirement.  It will involve new legal duties including the auto-enrolment of eligible employees into a qualifying pension scheme and paying a minimum contribution into that scheme.  The changes, which for larger employers began in 2012, are being phased in over a number of years, with each employer being allocated a ‘staging date’ from when their duties will begin.  

If you are a payroll client of ours, we will already have contacted you if this legislation is relevant to you.  Alternatively please visit the Payroll News section of our website for more details.  Grant & Co will be offering a complete Auto-enrolment service to our payroll clients, which will include workforce assessment and communication and management of pension contributions making compliance simple and hassle free.

If you would like further information or advice, please do get in touch.

 A Greener Service

 As part of our effort to be as green as possible, please note it is possible for us to upload payslips / payroll summaries to the secure Clientzone area of our website for you to download at your convenience.  If you would like to take advantage of this service, please let our Payroll Department know. 

If you would like further advice or information on any of the above issues, then we’d be pleased to help. 

Telephone – 01242 223160

Email – payroll@grantandco.co.uk.

WORKPLACE PENSIONS and AUTO ENROLMENT

You will no doubt have read in the Press and seen on the TV news about Workplace Pensions and Auto-enrolment.  This change in law will see every employer in the UK required to help more of their workers save for retirement.  It will involve new duties including the auto-enrolment of eligible employees into a qualifying pension scheme and paying a minimum contribution into that scheme.  The changes, which for larger employers began in 2012,  are being phased in over a number of years, with each employer being allocated a ‘staging date’ from when their duties will begin.   Your staging date is can be found out here: http://www.thepensionsregulator.gov.uk/employers/tools/staging-date.aspx .  There are some key steps to preparing for Auto-enrolment:

NOW

  • Nominate a point of contact – someone who will manage / implement the scheme in your business. 
  • Know your staging date and develop a plan of action.

BETWEEN NOW AND YOUR STAGING DATE

  • Assess your workforce so that you understand how many (if any) of your employees are affected.   There are 3 different categories of workers to be considered:
  1. Eligible jobholders:  Aged between 22 and state pension age (SPA), working in UK, earning above the earnings trigger for auto-  enrolment (currently £9440).  Members of this category of worker must be automatically enrolled into a qualifying pension scheme and you must make employer contributions.
  2. Non-eligible jobholders:  Aged 16-21 or SPA-74, working in UK, earning above the earnings trigger for auto-enrolment OR Aged 16-74, working in UK, earning above the Lower Earnings Limit (£5668 for 13/14) but below the earnings trigger for auto-enrolment.  Members of this category of worker have a right to opt in to a qualifying pension scheme.  If they choose to do so you must make employer contributions.
  3. Entitled workers: Aged 16-74, working in UK, earning below the Lower Earnings Limit (£5668 for 13/14).  Members of this category of worker have a right to join a qualifying pension scheme; however there is no requirement to make employer contributions. 

Once completed, this initial assessment can be used to help you calculate the probable administrative impact and employer contribution costs to your business.  

  • Choose a qualifying pension scheme.  You may have an existing scheme that you could use for auto-enrolment but you will need to check that it is suitable, or you may need to set up a new one.  Further information on the minimum features required for a UK pension scheme to qualify can be found on The Pensions Regulator’s website.  We are delighted to be partnering with independent financial advisors Noble James Associates Ltd who can help you choose and administer a pension scheme that is right for your employees and your business needs.  Alternatively you might want to use the NEST (National Employment Savings Trust) scheme, which is open to all employers and was created as part of the Government’s pension reforms.  It is advisable to start the process of looking for the right pensions solution for your business at least 12 months in advance of your staging, as some pension providers are being reported to be unwilling to assist SME’s with qualifying pension schemes due to the anticipated high administrative burden involved. 
  • Communicate the changes.  Employers are required by law to write to all workers (except those aged under 16, or 75 and over) explaining what automatic enrolment into a workplace pension means for them. There are different information requirements for each category of worker.

FROM YOUR STAGING DATE

  • Automatically enrol all eligible jobholders’ who are not already a member of a qualifying pension scheme into your scheme.
  • Facilitate ‘opt outs’.  Workers may ‘opt-out’ of this new kind of pension saving by obtaining an opt-out notice from the pension scheme into which they are enrolled.  The opt-out period lasts for one month and any deductions made from the worker’s salary during this time must be refunded.  After this opt-out period workers can still cease membership of the scheme in accordance with the normal rules of the scheme, with any refund of contributions being determined by those rules.  The workplace pensions reform includes safeguards that employers must adhere to to ensure jobholders are not penalised in any way for being a member of a workplace pension scheme or dissuaded from joining one and that recruitment practices are not affected. 
  • Inform ‘non-eligible jobholders’ and ‘entitled workers’ that they can join / opt-in to your scheme.
  • Continually assess your workforce and enrol new employees on the date they join your employment and existing employees when they become old enough or earn enough to be enrolled for the first time.  You will also need to re-enrol employees who opt- of pension saving, known as re-enrolment, broadly every three years.  As part of your plan of action you should consider whether your current administration / HR / payroll systems are able to handle this adequately?
  • Register with The Pensions Regulator and keep records.  You will need to register with The Pensions Regulator within 4 months of your staging date.  This will be a straightforward online process, completed via the Government Gateway.  If you don’t have an existing Government Gateway User ID then you will need to register for one.   There will also be records you will be required to keep under law in relation to your workers and your pension scheme.
  • Contribute to your workers’ pensions.  Except in the case of ‘entitled workers’, you will be required to make on-going employer contributions to your worker’s pension scheme.  The minimum contribution rates will be introduced gradually under ‘phasing’.  The minimum contributions are currently a total contribution of 2% (made up of employee and employer contributions, plus tax relief) with at least 1% employer contribution, which will apply from your staging date until 30 September 2017.  The contribution rates are then set to rise to a total contribution of 5% with at least 2% employer contribution from 1 October 2017 to 30 September 2018, then to 8% with a 3% minimum employer contribution from 1 October 2018.

 

We will be offering a complete Auto-enrolment service to our payroll clients, which will include workforce assessment and communication, making compliance simple and hassle free. 

If you would like further advice or information please do get in touch. Tel: 01242 223160 or email sara@grantandco.co.uk.

We’re here to help.

 

Payroll News

 The 2013 / 2014 TAX YEAR holds many changes and challenges for employers

Today we published a Payroll Newsletter highlighting the many changes and challenges faced by employers in the coming tax year.  The full article can be read here, but these are some of the headlines:

Income Tax Allowances 

The basic personal allowance for 2013-14 increases to £9,440 and the tax code for emergency use will be 944L. 

Income Tax bands and rates

The tax bandwidths for 2013-14 are as follows:

Basic rate = 20%         £1 to £32,010

Higher rate = 40%       £32,011 to £150,000

Additional rate = 45%            £150,001 and above 

NICS

The Lower Earnings Limit, the amount of earnings which allow an employee to qualify for certain state benefits, increases to £109 per week.

The Primary Threshold, above which employees begin to pay National Insurance, increases to £149 per week.  The main rate of Class1 NIC’s due on earnings above this threshold and up to the Upper Earnings Limit remains unchanged at 12%.

The Upper Earnings Limit reduces to £797 per week.  The rate of employee Class 1 NIC’s on earnings above this point remains unchanged at 2%.

The Secondary Threshold, above which employers Class 1 NIC’s become due, increases to £148 per week.

The Class 1 employer rate of NIC’s remains unchanged at 13.8%.

Statutory Payments 

The Statutory Sick Pay (SSP) rate increases to £86.70 per week.

The weekly rate for Statutory Maternity Pay (SMP), Ordinary Statutory Paternity Pay (OSPP), Additional Statutory Paternity Pay (ASPP) and Statutory Adoption Pay (SAP) increases to £136.78.

REAL TIME INFORMATION

From 6 April 2013 it becomes compulsory for the large majority of employers to begin reporting PAYE information to HMRC in real time – known as Real Time Information or RTI.  We have written about the changes previously in our blog (https://grantandcoaccountants.wordpress.com/2012/12/05/real-time-information-are-you-ready/), but essentially this means:

  • If you currently use commercial payroll software you will need to check that it is RTI compliant, upgrading your software if necessary.  If you currently use HMRC’s free Basic PAYE Tools software be aware that it will only be suitable for employers who have fewer than nine employees during a tax year. If you are likely to exceed this number you will need to either invest in commercial software or employ the services of a payroll provider such as ourselves.
  • You will need to send PAYE information to HMRC every time you pay your employees, on or before the time that you pay them, rather than after the tax year end as at present.

The new types of submission required by HMRC under RTI are as follows:

  • Employer Alignment Submission (EAS):  This is a one-off submission that      employers with 250 or more employees, or those whose PAYE scheme is      administered by two or more payroll systems / providers, have to send to HMRC to help align employee data with HMRC records.
  • Full Payment Submission (FPS):  The FPS must be sent to HMRC each time you pay your employees and contains key employee data plus details such as the amount you paid your employee(s) and deductions such as PAYE and NICs.
  • Employer Payment Summary (EPS):  This submission is required when you      haven’t paid any employees in a pay period or if you need to reduce the amount of PAYE/NI due to be paid to HMRC.  This may be because of things like SSP and SMP recovery, CIS deductions suffered and NIC holiday.  This must be submitted within 14 days of the end of the tax month, i.e. by 19th.
  • Earlier Year Update (EYU): This submission is used if you need to correct data submitted to HMRC in a previous tax year (only applicable for corrections to 2013/2014 and later years).
  • NINO Verification Request (NVR):  Once you have started submitting data to      HMRC via RTI you can use a NVR to verify or obtain a National Insurance number for new employees.

The following forms will no longer be required to be submitted to HMRC under RTI – P14/P35 end of year return, P45 starter / leaver form (although no longer required by HMRC, a P45 should still be issued to leavers), P46 starter form, CA6855 NINO trace form, P38(s) student form.

More information can be found at www.hmrc.gov.uk/payerti/at-a-glance.pdf.

Clients taking advantage of our outsourced payroll service need not take any action, as we have updated our payroll software, successfully taken part in HMRC’s pilot scheme and are fully RTI compliant. However, if you require any further information regarding RTI please give us a call. 

Making your PAYE payment to HMRC 

From the 2013 / 2014 tax year there will be just one HMRC bank account for making PAYE payments (including Income Tax, NIC’s, Construction Industry Scheme and Student Loan deductions), as follows:

Sort code 08 32 10
Account number 12001039
Account name HMRC Cumbernauld

Employers who previously paid using the Shipley account will need to update to the bank details shown above.

Student employees 

From 6 April 2013 students will be treated in exactly the same way as other employees and form P38(s) will be withdrawn. 

Auto Enrolment

As you are probably aware, starting with large employers (greater than 10,000 employees), from October 2012 a new system of workplace pensions is being rolled out.  Gradually, more and more people working for large and medium sized employers will be enrolled. By early 2014, everyone working for a company or organisation with a workforce of 350 people or more should have been signed up.  Smaller employers will then gradually be brought in, until by 2018 everyone should finally be in the scheme.

We will cover this topic in a separate newsletter shortly, but in the meantime if you would like an overview of Auto Enrolment or would like to know your Auto Enrolment staging date, please do get in touch. 

If you would like further advice or information on any payroll issues, then we’d be pleased to help.   

Telephone – 01242 223160

Email – payroll@grantandco.co.uk.