Aug 2022
18
Organised labour fraud: Warning to employers from HMRC
HMRC’s August employer bulletin was released last week and included in it were warnings to employers on organised labour fraud. Organised labour fraud is the umbrella term HMRC gives to three main types of fraud which all share similar features.
The three types of fraud are:
- Payroll company fraud
- Labour fraud in construction
- Mini-umbrella company fraud
These types of fraud are orchestrated by organised crime groups and involve a genuine supply of labour. Crime groups may grow their operations to include other types of fraud where the supply of labour is central to how the fraud operates.
Organised labour fraud affects HMRC, businesses, employees, and the general public. These frauds steal vital revenue that funds the UK’s public services, can hurt the finances and reputations of businesses, and for employees, it can affect their employment rights and may impact their ability to claim benefits in the future.
Payroll company fraud
This type of fraud takes place when a business outsources its payroll responsibilities to a fraudulent third party who claim to be a payroll provider. The fraudulent ‘payroll provider’ will process the payroll of their victims’ employees. While they will pay the employees their wages, they will fail to pay income tax, National Insurance and VAT to HMRC. This is how they get away with the scam for some time, as the employer may take a while to notice what has been happening. With this type of fraud, there is a risk that the employer could still be deemed liable for the tax, NI and VAT payments that were never received by HMRC.
Labour fraud in construction
This is another type of fraud which targets employers. HMRC defines it as “the fraudulent use of contrived labour supply chains in the construction industry.” This fraud involves the abuse of the Construction Industry Scheme to move labour-related VAT and Income Tax liabilities into “shell corporations.” Shell corporations are companies which have no business operations or significant assets. These companies are sometimes used in organised crime. The shell companies will then go default and will owe a debt to HMRC.
Mini-umbrella company fraud
The third fraud is one that can affect businesses which use temporary labour. It works by criminals creating multiple limited companies, with each one employing a small number of temporary employees. Each of these micro companies may fraudulently claim Employment Allowance and abuse the VAT Flat Rate Scheme which are government incentives aimed at helping small businesses.
Common traits of organised labour fraud
In their 2022, August bulletin, HMRC have listed a number of red flags or common traits to watch out for in fraudulent businesses, including:
- Businesses with a short life span — sometimes as little as 12 months. These businesses will then be abandoned or become insolvent, and another entity will take their place
- Hijacked VAT registration, Construction Industry Scheme registration and, or PAYE scheme numbers
- Unusually long supply chains which often make no commercial sense
- Turnover rises at an exponential rate and debt accrues quickly
- The director’s business history suggests they lack the experience to run a company of that type and size
- Directors may have a history of ‘phoenixing’ companies which is when a business is conducted through a succession of companies. Each in turn becomes insolvent and transfers the business onto the next company.
What can you do to avoid being a victim of organised labour fraud
HMRC recommends that businesses have a system in place whenever they receive a supply of labour. Every business should:
- Check the legal, financial, tax and social obligations of suppliers
- conduct robust due diligence on suppliers and act to mitigate or remove risks
- Continuously monitor and review your due diligence
HMRC also recommends that individuals register for their Personal Tax Account as regular checking ensures that the information shown there is accurate.
You should contact HMRC as soon as possible if you have information or concerns regarding a supplier.
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Apr 2022
11
The 22/23 tax year: Key dates for employers
The 2022/23 UK tax year begins on 6th of April, 2022. For employers, there are a range of need-to-know dates and important deadlines you must be remember each year to ensure you stay compliant, and avoid any penalties from HMRC.
To make things easy for you, below, we have compiled a list of payroll and self-assessment tax return deadlines for employers and the self-employed.
Payroll dates and deadlines
6th April
As the new tax year begins, with it brings a number of changes. Follow the links to read about important changes for the 2022/23 tax year such as the new National Insurance Levy and new NLM and NMW rates.
19th April
You have until the 19th of April to submit your Employer Payment Summary (EPS) for the previous tax year to inform HMRC that you have completed your final submission for the year.
31st May
You must give any employees who were on your payroll on the last day of the previous tax year (5th April) a copy of their P60 by the 31st of May.
6th July
For each employee you provided with expenses and benefits for the previous tax year, you must submit your P11D forms online to HMRC and give your employees a copy of the information on your forms, by the 6th of July. By this date you must also submit a P11D(b) form to HMRC to declare the total amount of Class 1A NICs you owe on expenses and benefits provided for the year.
19th July
If paying by cheque, any Class 1A National Insurance owed on expenses or benefits for the previous tax year must reach HMRC by the 19th of July.
22nd July
If paying electronically, any Class 1A National Insurance owed on expenses or benefits for the previous tax year must reach HMRC by the 22nd of July.
19th October
If you have a PAYE Settlement Agreement, you must pay all tax and Class 1B National Insurance owed by the 19th of October, if paying by cheque.
22nd October
If you have a PAYE Settlement Agreement, you must pay all tax and Class 1B National Insurance owed by the 19th of October, if paying electronically.
5th April 2023
The last day of the tax year is the 5th of April and your final Full Payment Submission (FPS) should be made on or before the final pay day of the tax year.
If you choose to payroll your employees’ benefits for the 2023/24 tax year, you must register online on or before 5th April 2023.
Self Assessment tax return deadlines
31st July
Your second payment on account for the current tax year must be paid by the 31st of July.
5th October
If you’re self-employed or a sole trader, not self-employed, or registering a partner or partnership you must register for Self Assessment by the 5th of October.
31st October
Paper Self-Assessment Tax Returns must be received by HMRC by the 31st of October.
30th December
Deadline for Online Self Assessment Tax Return if you are eligible and want it collected through next year’s PAYE tax code.
31 January 2023
Online Self-Assessment Tax Returns must be received by HMRC by the 31st of January.
Pay any tax you owe for the previous tax year and your first payment on account towards your bill for the next tax year.
To switch to BrightPay before the new tax year, book a free consultation with one of our migration specialists today. Or, to see the software in action, book a free online demo today.
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Mar 2022
28
BrightPay and AccountancyManager join forces
It has been an exciting six months since BrightPay merged with Relate Software to become Bright Software Group or “Bright”, as we are now known. Things haven’t slowed down since and we are delighted to announce that Bright has now acquired AccountancyManager, the UK’s leading onboarding and practice management software. The cloud-based software slots in nicely with Bright’s payroll, HR, bookkeeping and post-accounting software products. This is an exciting opportunity for the individual brands to exploit our operational synergies and develop the best products to serve payroll bureaus, accountancy firms and SMEs across the UK and Ireland.
Click here to find out more about Bright.
Who are AccountancyManager?
AccountancyManager (AM) is an award-winning practice management software that shares the same ultimate goal as Bright; to improve accountants’ day-to-day activities by automating time-consuming tasks, helping them to achieve a better work/life balance and grow their businesses. Founded in 2017 by James Byrne and Alex Hawke, AccountancyManager quickly grew and today is used by thousands of accountants and bookkeepers across the UK and Ireland.
A Bright future for AccountancyManager
James Byrne, co-founder of AM will continue as a shareholder in the combined group and will remain involved with the business as an advisor to the combined board. Kevin McCallum, CEO of AM, will become Chief Operating Officer of the new, combined group as well as continuing to manage AM, working closely with Bright CEO, Paul Byrne.
Here’s what Kevin McCallum, incoming COO of Bright, has to say about the merger: “AccountancyManager joining Bright makes so much sense for many reasons, but for me, the shared values and customer-centric approach are the most compelling. I’m excited to be joining Paul and the wider Bright team in building out the scope and scale of our business and supporting more and more accountants and their clients.”
By partnering with AccountancyManager and combining products and strengths from both businesses, Bright can provide a greater offering to our customers, with scope and backing for further innovation and development. This is an exciting moment in Bright’s journey to delivering a one-stop solution for businesses and accountancy firms. Together we will aim to provide a best-in-class software suite with a clear value proposition to drive efficiency and reduce errors, all with increased flexibility from working with a cloud offering.
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Dec 2021
14
New Advisory Fuel Rates from 1st December 2021
The Advisory Fuel Rates that will come into effect from 1st December 2021 have been announced by HMRC. Employers may use the old rates for up to one month from the date the new rates apply. Employers are under no obligation to make supplementary payments to reflect the new rates but can do so if they wish. Hybrid cars are treated as either petrol or diesel cars for this purpose for the fuel rates. For fully electric cars the Advisory Electricity Rate are 5 pence per mile. Click here to view details per HMRC.
The new rates are as below:
| Engine size | Petrol - amount per mile | LPG - amount per mile |
| 1400cc or less | 13 pence | 9 pence |
| 1401cc to 2000cc | 15 pence | 10 pence |
| Over 2000cc | 22 pence | 15 pence |
| Engine size | Diesel - amount per mile |
| 1600cc or less | 11 pence |
| 1601cc to 2000cc | 13 pence |
| Over 2000cc | 16 pence |
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Nov 2021
2
BrightPay wins ‘Payroll and HR Software of the Year 2021’
BrightPay was announced as the WINNER of Payroll and HR Software of the Year 2021 at this year’s Institute of Certified Bookkeepers (ICB) LUCA awards.
Last night, the ICB held their annual awards in Leicester Square, London. The LUCA awards are considered the ‘Oscars’ of the bookkeeping profession and are awarded in recognition of the year’s outstanding bookkeepers and the many organisations and software services that support the valuable work they do. This year was even more special as not only were the awards held in-person again, but they were also celebrating the 25th Anniversary of ICB's inception. ICB members and students vote to decide the winners of each category. BrightPay are thrilled and honoured to have won Payroll and HR Software of the Year 2021, beating out tough competition from fellow nominees being Intuit Quickbooks, Moneysoft, Sage Payroll, and Xero Payroll.
Picture: Paul Byrne, CEO of BrightPay, poses with the award, a statuette of Luca Pacioli, the Cistercian monk who is credited with first documenting the process of double-entry bookkeeping.
An award-winning payroll software
The award for Payroll and HR Software of the Year comes just under a year after BrightPay won the COVID-19 Hero Supplier Award at the Accounting Software Excellence Awards 2020. During 2020 and beyond, BrightPay quickly responded to frequent changes to payroll legislation, allowing our customers to carry on processing their payroll uninterrupted.
It is a credit to the entire team at BrightPay, amidst the pandemic and throughout 2021, that they continued to develop BrightPay Payroll Software. New and enhanced features were added, all the while BrightPay continued to deliver excellent support to our customers.
Not simply a payroll software
A particular exciting aspect of this award is the ‘HR’ in the title. While BrightPay has been well known for its excellent payroll functionality, we have been working hard on delivering more and more useful HR features to our customers. Bookkeepers using BrightPay alongside the optional cloud add-on, BrightPay Connect, have access to a more streamlined workflow between human resources and payroll.
- Using BrightPay Connect’s self-service portal, annual leave can be requested by clients’ employees and approved by the employer before flowing back into the payroll software.
- With the self-service portal, bookkeepers can also offer their clients access to run and view payroll reports whenever they like. With the reports automatically available to their clients, it improves the bookkeeper’s workflow as well as saving them time.
- Once payroll has been finalised, payslips are automatically sent to employees’ Connect portal. Employees have access to their payslip archive at any time. It ensures they never lose a payslip, and they have access to them whenever they require it.
To discover more about BrightPay’s features such as batch processing capabilities, integration with numerous accounting packages, and the ability to streamline your payment methods, download a 60-day free trial of BrightPay now. To learn more about BrightPay Connect’s payroll and HR functionality, book a demo today.
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Oct 2021
29
Autumn Budget 2021 – An Employer Focus
Chancellor of the Exchequer, Rishi Sunak, presented the Autumn Budget 2021 to Parliament on 27th October 2021. The main points to be noted by employers are:
- The personal tax allowance will remain the same, £12,570 for the tax year 2022-23.
- The Higher Rate Threshold (HRT), when higher earners start to pay 40% tax, remains at £50,270.
- The National Insurance Upper Earnings Limit (UEL) threshold will remain the same in 2022-23 and will remain frozen until 2026.
- The new National Insurance Levy of 1.25% will come into effect from April 2022 via a temporary increase to National Insurance Contributions (NICs) for Class 1 (employee and employer), Class 1A, Class 1B and Class 4 (self-employed). From April 2023 NIC will revert back to 2021/22 rates where a new Health and Social Care (H&SC) levy will be a separate deduction for this 1.25% levy. The Health and Social Care levy will also apply to employment earnings of those over State Pension Age (category letter C).
- For 2022-23 tax year company car percentages will increase from 1% to 2% for vehicles first registered before 6th April 2020 with 0kg/km rate. Vehicles first registered on or after 6th April 2020 will increase by 1%. The rates will be frozen then for the next two tax years 2023-24 and 2024-25.
- The Employment Allowance remains at £4,000 for eligible employers where the Class 1 National Insurance Contributions liabilities were less than £100,000 in the previous tax year.
- The National Living Wage for workers aged 23 and over will rise to £9.50 per hour from 1st April 2022, this represents an increase of 6.6%.
- The pay freeze for some public sector workers will end and pay rises will be given over the next three years.
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Sep 2021
28
BrightPay & Relate Software join forces to create an accounting & payroll software champion
We are delighted to announce that BrightPay has joined forces with Relate Software, a leader in post-accounting, practice management, and bookkeeping software. The partnership will aim to create a software champion serving payroll and accounting bureau and SMEs across Ireland and the UK.
BrightPay is a modern payroll and HR software which takes care of every aspect of running your payroll, from entering employee and payment details to creating payslips and sending real-time payroll submissions. The software has been designed from the ground up to be clear and simple, and yet no compromise has been made on its payroll features.
Likewise, Relate is dedicated to building innovative and focused products designed specifically for the accounting profession. Its offering includes Surf products, a cloud native product suite of bookkeeping, post-accounting, and practice management software. Relate is an industry-leader in Ireland and has been building software for over 25 years.
By partnering with Relate and combining products and strengths from both businesses, we can provide a greater offering to our customers, with scope and backing for further innovation and development. This is an exciting moment in BrightPay’s journey to delivering a one stop solution for businesses and accountancy firms. Together we will aim to provide a best-in-class software suite with a clear value proposition to drive efficiency and reduce errors, all with increased flexibility from working with a cloud offering.
For more information, please see the press release and customer FAQs.
Sep 2021
10
How is payroll impacted by the new national insurance levy?
On Tuesday, the Prime Minister announced a 1.25% health and social care levy on earned income, which will come into effect in April 2022. Speaking to the House of Commons, Boris Johnson declared that this additional levy was required in order to raise funds for health and social care across the UK.
Speaking about the National Health Service, the Prime Minster said “Covid has put enormous pressure on the NHS” and in order to not only “tackle Covid backlogs” but to also reform an already struggling service, a record investment would be required. The additional levy is expected to raise £36 billion over three years.
How will the new health and social care levy be introduced?
In April 2022, the 1.25% levy will be raised via a temporary increase to the National Insurance Contributions (NICs). This will impact Class 1 (employee and employer), Class 1A, Class 1B, and Class 4 (self-employed). In April 2023, the NI will revert back to its current rates and the health and social care levy will be separated out on its own.
Who will be affected by the 1.25% levy?
The new levy will then be paid by all working adults and will also include those above the state pension age who are still working. The exception is those earning less than £9,564 a year or £797 a month, who don't pay National Insurance and won't have to pay the new levy.
How has dividend tax been affected?
The Prime Minister also announced on Tuesday that dividend tax would rise from 2022 by 1.25% to help cover the costs of the social care package. This will not affect shares held in tax-exempt savings accounts, known as ISAs. The £2,000 tax-free allowance for dividend income will also remain unaffected.
What does this mean for payroll?
As typical with any changes to legislation, BrightPay payroll software will be updated to apply the new rates to your employees' earnings. This will first be reflected on an employee’s payslip with an increase to their NIC deduction, and then in April 2023 the new levy will be introduced as a separate deduction on the payslip.
Discover more:
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