Dec 2014
16
BrightPay joins Accounting Webs Auto Enrolment Campaign
Since October 2012, employers in the UK are obligated by law to enrol their employees into a pension scheme who fall within a certain age and pay bracket. Employers must also contribute towards this pension. This is called Auto Enrolment which will continue to be rolled out over the next few years with the largest companies already enroled. Employers will need to review their pension provision and make sure they’re complying with these new Auto Enrolment duties correctly.
BrightPay & AccountingWeb
BrightPay and Accounting Web are concerned with the number of small businesses and accountants that do not understand the implications of auto enrolment for their business. To combat the lack of awareness Accounting web have launched their ‘No one gets left behind’ campaign to let payroll bureaus and individual employers know what steps they need to do to comply with their AE duties.
BrightPay is delighted to become an official supporter of this Auto Enrolment awareness campaign. The aim is to help business comply with these new duties so they do not face large fines or put added pressure on their business. Accounting web have produced eight easy to understand, simple steps that explain what you need to know.
As of the start of December over 8,000 accountants are aware of Auto Enrolment due to this campaign. Make sure to share this guide with friends, work colleagues and business associates. Auto Enrolment can be made easy if bureaus have the right payroll software in place to deal with Auto Enrolment.
Help BrightPay spread the word and get the message out there.
Accounting Web - Free Guide
Dec 2014
14
Tax thresholds raised in Autumn Statement
More than 130,000 people will escape the higher rate of tax, as it rises in line with inflation for the first time in five years.
The higher rate threshold – where taxpayers pay a 40 per cent rate – will jump from £41,865 to £42,385 next year, George Osborne announced in the Autumn Statement.
The £100 rise to the personal allowance was also passed on in full to higher rate tax payers.
Mr Osborne said the increase to the higher tax rate threshold was a “down-payment” on the government’s promise to raise it to £50,000 by the end of the decade.
The Chancellor also revealed an increase in the personal allowance – the amount of money that can be earned tax-free every year – to £10,600 from next April, £100 more than the £10,500 expected.
It has also been announced that business who employ apprentices under the age of 25 will no longer have to pay national insurance contributions for them.
Among the other measure announced was an extension of the £2,000 Employment Allowance to carers, freezing Universal Credit work allowances for another year and cutting tax credits when overpayments are certain.
Dec 2014
4
Chancellor announces abolition of Employer National Insurance Contributions for employees under 21 in 2015.
George Osborne revealed the reduction, designed to reduce levels of youth unemployment, alongside other announcements that will affect employers – including an earlier than expected increase in the state pension age and more accessible funding for apprenticeships available directly from HM Revenue & Customs (HMRC).
The removal of employers’ national insurance (NI) contributions for under-21s in April 2015 will follow the introduction of the £2,000 “employment allowance” that comes into force next April. Higher-rate tax payers who are under 21, earning £813 per week or more, will still attract employer NI contributions.
“Employer NI contributions will be removed altogether on a million and a half jobs for young people. We’re not going to leave young people behind as the economy grows,” said Osborne. “We are going to have a responsible recovery for all.”
Dec 2014
3
Student Loan threshold to increase from 6 April 2015
The Department for Business, Innovation and Skills has confirmed that from 6 April 2015, the Student Loan threshold will rise by 2.5% to £17,335. The current threshold for 2014/15 is £16,910.
On a ‘per pay period’ basis, the £17,335 threshold for 2015/16 can be estimated as follows:
- £333.67 weekly
- £1,444.58 monthly
This new threshold will apply to all current borrowers for whom employers make Student Loan deductions.
BrightPay 15/16 will automatically calculate and apply the appropriate student loan deduction as per the new 15/16 Student Loan Deduction Tables.
Nov 2014
28
Exhibiting at Chartered Accountants Hall
BrightPay were in London today at the ICAEW Sole Practitioners Conference in Chartered Accountants Hall, Moorgate.
200 ICAEW members attended the event. The subject matter of the lectures included:
Automatic enrolment
Economy update
Tax update
Panel debate: Tomorrow's practice
And more ...
Nov 2014
26
Employers - are you ready to meet requirements of Shared Parental Leave?
Employers are unprepared for the new Shared Parental Leave legislation, according to studies despite the rules coming into force next week, on 1 December 2014.
More than one in five (21 per cent) HR Directors admitted they are not ready for the requirements of the legislation, while 70 per cent say they predict little or no interest from employees in the first 12 months.
Yet when employees were asked their views, a third (33 per cent) of 16- to 34-year-olds said they anticipate taking advantage of it within the next five years.
Shared parental leave is a new right that will enable eligible mothers, fathers, partners and adopters to choose how to share time off work in the first year after their child is born or placed with adoptive parents.. It will be an option for parents with a child due to be born on or after 5 April 2015.
The new allowance is designed to make it easier for women to return to the workplace after having a child, facilitating a more equal distribution of childcare responsibilities.
Yet, despite the potential benefits for work-life balance and gender equality, more than one in 10 (11 per cent) workers questioned have not heard of Shared Parental Leave, rising to 13 per cent of 16- to 34-year-olds.
This suggests an additional need for employers to educate staff to ensure they are all aware of the benefits and implications.
The introduction of Shared Parental Leave represents a step change for working parents, allowing them to take more control over child care responsibilities in the challenging few months after birth. Studies show that many employees are keenly anticipating the changes and the potential benefits they will bring. Some HR Directors may have underestimated the impact. In these cases, it’s time to start swotting up on the new rules, to ensure you’re ready to answer any upcoming employee questions.”
Check out your responsibilities at regulations at https://www.gov.uk/shared-parental-leave-and-pay/overview
Keep following www.brightcontracts.co.uk where we will be updating our Shared Parental Leave guidance regularly.
Nov 2014
25
Zero Hours Contracts
The ongoing issue of Zero Hours Contracts raised its head again recently.
At a Labour Party conference in Coventry, Ed Miliband hit out at the UK sports giant, “Sports Direct” for its high use of Zero Hours Contracts by stating "Zero-hours contracts are the way Sports Direct employs the vast majority of its workforce - 17,000 out of its 20,000 workers. “He added: "These Victorian practices, the epidemic of zero-hours contracts that we see at Sports Direct, have no place in the 21st Century."
Miliband has promised that the next Labour Government will bring in new laws giving workers a regular contract if they are working regular hours, the right to refuse demands will be available outside their contracted hours and compensation when shifts are cancelled at short notice.
Miliband’s decision to address this issue and in particular to name a specific company is a brave one after Chris Bryant, a shadow minister, had to backtrack on claims he made about Next and Tesco employing cheap foreign labour last year. It may also fuel criticism from his opponents that the party is too anti-business.
There has been recent concern that zero hours contracts do no offer enough financial stability and security. However following a recent review the Government has ruled out banning zero hours contracts completely,although it is banning the use of exclusivity clauses, where employees on zero hours contracts are only permitted to work for one employer.
This is a hot topic at the moment and one to watch in the future.
For more information on zero hours contracts please see our website;
http;//www.brightcontracts.co.uk/docsw/hr-guidance/zero-hours-contracts/
Nov 2014
20
Important National Insurance changes from 6 April 2016
The Department for Work and Pensions has published new guidance for both employers and employees on the ending of contracting-out of the additional State Pension.
This guidance explains the changes being made to the State Pension for people who will reach State Pension age on or after 6 April 2016.
If you are one of the 2,500 private sector employers who offer a salary related pension scheme, your employees are likely to be “contracted-out” of the additional State Pension. If so, you and your employee may pay National Insurance contributions at a lower rate because you get a National Insurance rebate.
On the 6 April 2016, the new State Pension will replace the existing basic and additional State Pension and will bring to an end contracting-out and the National Insurance rebate.
This means that from April 2016, you and your employees will pay the standard rate of National Insurance contributions instead of the contracted-out rate. For employers, the standard rate of National Insurance is 13.8% of all earnings above the secondary threshold for all employees and they will no longer receive the 3.4% National Insurance rebate.
The 1.4% National Insurance rebate for those employees in contracted-out schemes will also end. This means employees will pay the standard rate of National Insurance instead of a lower rate.
Employers who currently offer a salary related pension scheme and who will be affected by the changes are advised to speak to their pension advisor or scheme trustees to explore possible options available to them before the changes are brought in.
The Department for Work and Pensions’ guidance on this topic can be found at:
Nov 2014
9
New 2015 Living Wage Rate announced
The UK "living wage" - an hourly rate based on the amount needed to cover the basic costs of living - has been raised by 20p to £7.85, whilst The London Living Wage has been raised from 8.80 an hour to £9.15.
What is the difference between the Living wage and the national minimum wage?
The living wage is an informal benchmark, not a legally enforceable minimum level of pay line the national minimum wage. The national minimum wage is set by the business secretary each year on the advice of the Low Pay Commission. Unlike the living wage, the national minimum wage is enforced by HM Revenue and Customs (HMRC).
The basic idea of the living wage is that these are minimum pay rates needed to let workers lead a decent life.
Does this effect employers?
The living wage is a voluntary wage so employers are not legally obliged to pay it. Nevertheless, it has been adopted by more than 1,000 employers across the country benefitting 25,000 workers. Citizens UK, the community behind the living wage project say that the number of companies paying the rate has doubled in the last year. However, some business groups are not happy with the increase saying some employers might struggle to pay it.
The advice to employers should be to seriously consider the living wage, but only implement it if it is affordable.
Bright Contracts – Employment Contracts and Handbooks.
BrightPay – Payroll & Auto Enrolment Software.
Nov 2014
5
Bombshell ruling on holiday pay - UK
An Employment Tribunal has ruled that overtime should be taken into account when holiday pay is calculated, in what’s thought to be a “bombshell” decision that could cost UK businesses billions of pounds.
Experts predicted that up to 5m people could claim for extra holiday pay dating back as far as 1998 if the ruling was in the employees’ favour, but despite the Employment Law Tribunal (EAT) ruling that non-guaranteed overtime must be taken into account for the purposes of calculating holiday pay, the scope for workers to bring claims for arrears of holiday pay is limited.
The EAT reached 3 key conclusions;
• “Non-guaranteed” overtime should be taken into account when calculating holiday pay for the purposes of the four weeks’ holiday entitlement that derives from the Working Time Directive. This is because under EU law workers are entitled to receive their “normal remuneration” when taking such leave and the overtime in these cases had been so regularly required by the employers as to amount to normal remuneration.
• The Working Time Regulations (WTR) implemented in the UK in 1998, must be interpreted so as to give effect to the requirements in the Working Time Directive. The EAT said that it was obliged as far as possible to interpret the WTR in light of the wording and purpose of the Directive and it was prepared to read words into WTR to achieve this but significantly
• The scope for workers to recover underpayments of holiday pay by unlawful deduction from wages claims is limited. The EAT concluded that the workers could not claim any consequent holiday underpayment as being an unlawful deduction from pay under the Employment Rights Act 1996 using each shortfall as the last of a series of deductions where in any case a period of more than three months had elapsed between the deductions. Squire Patton Boggs says this part of the judgment is of great significance and potentially more so than the adjustment of rates going forwards, and is likely to limit significantly the extent to which workers can look backwards to recover historical underpayments.
