Risk of County Court Judgement for Employers who ignore Automatic Enrolment Duties

Employers who are persistently ignoring their automatic enrolment duties are being warned by The Pensions Regulator that they could be issued a county court judgement. Employers that ignore penalty notices issued by the The Pension Regulator to them are more likely to be issued with a CCJ. And if an employer does not pay within the 30 day limit of when they received the CJJ, these details will be recorded on their credit record. This may affect their borrowing ability in the future.

According to information from The Pension Regulator nearly 3,000 penalty notices were issued to employers between October and December 2016. In this same timeframe 870 escalating penalty notices were issued to employers. The number of fines have risen in line with the higher amount of employers now reaching their compliance deadline. Due to a small number of employers failing to pay these fines a number of County Court Judgements have now been issued.

The Pension Regulator believe that the smaller employers are leaving things to the last minute for their automatic enrolment duties, but if a compliance notice is issued hurries the employer up to fulfill their duties.The executive director for auto-enrolment at The Pensions Regulator, Charles Counsell , said: “Burying your head in the sand and ignoring your legal duties means your staff are missing out on pensions they are entitled to and your credit rating and reputation could be hit.”

Andy Beswick, managing director of business solutions at insurance firm Aviva, said: “No one wants to see small businesses being penalised for not complying with auto-enrolment. “A workplace pension can be a great asset to an employer when it comes to retaining and attracting key staff. It’s also a legal requirement so ignoring it isn’t an option. “There are a number of pension providers who have worked hard to make auto-enrolment as simple as possible for companies and advisers. With a bit of planning, the process of setting up a workplace pension is not as complicated as most people think.”

Posted byDebbie ClarkeinAuto Enrolment

Payroll Benefits 2017-18 - Register before 6th April 2017

Employers that wish to payroll benefits in the tax year 2017-18 must register with HM Revenue and Customs (HMRC) using the online Payrolling Benefits in Kind (PBIK) service before 6th April 2017 (if you had not already registered last year). You can register with HMRC using the PBIKs service Payrolling of benefits was introduced from the start of the tax year 2016/17 and will continue for the tax year 2017-18. Employers can account for the tax on benefits provided to employees through PAYE each pay day.

Registering with HMRC allows you to payroll tax on benefits without the need to submit a form P11D after the end of the tax year. P11D(b) returns will still have to be submitted and must include the total values of all payrolled and all non-payrolled benefits.

Using the online service, you can:

• Choose which benefits and expenses you want to include in the payroll for the following tax year

• Add or remove benefits and expenses

• Exclude employees who receive benefits or expenses but don’t want them payrolled. For these employees you must continue to report the benefit or expense on a P11D (you can exclude an employee at any time in a tax year but once you’ve done this you can’t reverse the decision, in year)

The only benefits you won’t be able to payroll are:

• Living accommodation

• Interest free and low interest (beneficial) loans

Tax is collected on benefits and expenses by adding a notional value to your employee’s taxable pay in payroll, tax is then deducted or repaid as usual as per the employee’s tax code. Payrolling Benefit In Kind functionality was incorporated into BrightPay 2016-17 and will continue in BrightPay 2017-18.

For more information about payrolling benefits, make sure to register for our free webinar here.

Posted byDebbie ClarkeinPayroll Software

Living and Minimum Wage Increases on 1st April 2017

On the 1st April 2017 the minimum and living wage will increase again. Going forward the rate will then change every April, starting in 2017. 

The National Minimum Wage (NMW) is the minimum pay per hour most employees are entitled to by law. An employee's age and if they are an apprentice will determine the rate they will receive. The National Living Wage is the national rate set for people aged 25 and over.

Posted byDebbie ClarkeinPayroll

New Proposed Statutory Payment Rates Announced for 2017-18

For the new tax year 2017-18, the Department for Work and Pensions have published the proposed statutory payment rates for benefits and pensions. The recovery amounts have not been published yet. Here is a link to the full list published - https://www.gov.uk/government/publications/proposed-benefit-and-pension-rates-2017-to-2018.

Please see some rates details below:

Posted byDebbie ClarkeinPayroll

Huge increase in The Pension Regulator's fines for Non-Compliance

The Pension Regulator's quarter figures for 1st July to 30th September 2016 have been released and there has been a huge rise in the number of notices and penalties issued to employers for non-compliance with auto-enrolment.

In this quarter The Pension Regulator issued 15,073 compliance notices, an increase of over 344% from the last quarter with 3,392 being issued. 3,728 fixed penalty notices carrying fines of £400 were also issued, an increase of 861 from the last quarter, up by 30%. Between July and September The Pension Regulator also issued 576 escalating penalty notices, up from 38 in the previous quarter. Depending on the size of the employer, these escalating penalty notices can carry a daily fine ranging between £50 and £10,000 per day.

The Pensions Regulator (TPR) says the rise is in line with the sharp increase in employers reaching their deadline to comply with auto-enrolment duties.

Since auto-enrolment was introduced in 2012 the following have been issued:

• 741 escalating penalty notices

• 26,040 compliance notices

• 6,779 fixed penalty notices.

A regulator spokesperson said: “Although the vast majority of employers are successful in meeting their duties, the minority of employers who fail to listen to warnings from us are subject to fines.”

The latest compliance and enforcement bulletin also emphasizes that explanations given by employers for non-compliance such as illness, being short staffed or confusion about their duties or miscommunication between employers and their advisers/agents are not a “reasonable excuse”.

Posted byDebbie ClarkeinAuto Enrolment

New Living Wage Rates Announced

Annually, the first week in November is Living Wage Week and as part of this week, the new living wage rates details are revealed. The Mayor of London announces the London rate for the Living Wage whereas the UK rate is announced countrywide at the same time.

The new London Living Wage, announced by the Mayor of London, Sadiq Khan, has increased by 3.7%, from £9.40 to £9.75 per hour. This helps reflect the higher cost of living facing families in the city. The UK Living Wage rate has increased by 20p from £8.25 to £8.45, an increase of 2.4%. The Government's current minimum wage for over 25s is £7.20, which is £1.25 less than this rate.

There are nearly 1000 London-based employers that have agreed to pay their staff the Living Wage hourly rate, this is an increase of 300 employers. In total nearly 1,000 employers have signed up since Living Wage Week last year bringing the total number of accredited Living Wage organisations to nearly 3000. New companies that have signed up are RSA Insurance Group, Curzon Cinemas, the British Library.

For information about the Living Wage Foundation and Living Wage week visit the Living Wage Foundation website

- See more at: https://www.cipp.org.uk/news-publications/news/voluntary-living-wage-rates-announced.html#sthash.3zt9o68v.dpuf

Posted byDebbie ClarkeinPayroll

At 30 September 2016 36% of employees now auto-enrolled

In a recent survey of employees in the UK undertaken by YouGov, on behalf of the workplace pension provider Smart Pension, has resulted in more than one third of employees have now set up a pension through the government's auto-enrolment initiative.

Results of the survey regarding employees about what type of pensions they have are:

• 36% said their pensions were created under auto-enrolment,

• 28% said they had non-auto-enrolled workplace pensions,

• 17% had a standard personal pension (SPP),

• 8% had a self-invested personal pension (SIPP) and

• 7% had a stakeholder pension.

• 6% had no idea what sort of pension they have

• 17% said they have no pension

Will Wynne, co-founder and MD of Smart Pension, said: “Auto-enrolment has already overtaken every other form of pension, including personal pensions, in a very short space of time. The initiative is clearly gaining momentum and looks on track to hit targets over the next two years when 1.8m small and micro firms have staged.”

Opt-outs

19% of UK employees said they would either opt out or have opted out of their workplace scheme, this is higher than the governments targeted figure of 15% opt-out rate. Currently the government's own figures are circa 10%, almost half than the amount resulted per the poll.

The main reason employees are opting out are due to lack of available monies (26%) or they would not want to invest in a pension (17%). 48% of employees did not want to think of preparing and saving for old age although 56% of employees believed they were not preparing adequately for retirement and saving enough. The results of the survey showed that most employees could afford to invest more money in their pension but they had no intention of doing so.

A separate poll found 55% of employers thought auto-enrolment was a burden and 38% said it was unfair, but 72% said they felt it would not hold back growth plans.

Posted byDebbie ClarkeinAuto Enrolment

NINOs with prefix 'KC' will be accepted by HMRC from 15th November

National Insurance Numbers had been issued with the prefix of KC by Jobcentre Plus (on behalf of the Department for Work and Pensions). These National Insurance numbers are valid. HMRC had issues with these NINOs with the KC prefix as HMRC has not included the KC prefix as a valid prefix on their list of valid prefixes to software developers. So HMRC's systems did not recognise the prefix KC and most payroll software did not recognise it either. But from 15 November 2016, as advised by HMRC, employers will be able to submit RTI data to HMRC for employees using this NINO prefix.

Some software products, including HMRC’s Basic PAYE Tools, may not be updated before April 2017. If this applies to you then you should continue to follow this guidance when submitting your returns:

• Do not enter the NINO for the employee - this field should be left empty

• The employee's address has to be entered, the first two lines are the minimum requirement

• You do not need to request a new NINO as the NINO with the KC prefix is valid.

Posted byDebbie ClarkeinHMRCPayroll Software

Payrolling Benefits in Kind 2017-18

HMRC requires an employer to register in order for them to process benefit in kind through the payroll. If you are planning on processing the benefit in kind through the payroll for 2017-18 you can register now and up to 5th April 2017. But HMRC are advising employers that it would be best to register before the 21st December, when the annual tax coding process normally starts, in order to avoid being sent several tax codes for employees with payrolled benefit in kinds.

Employers who wish to process benefits in kind through the payroll must ensure they are registered with HMRC for real time information. Employers can register for payrolling of benefits using their government gateway ID to login. Currently agents cannot use this registration service for payrolling of benefits but HMRC will develop this option at a later stage.

Employers must select the benefits that will be processed in the payroll for their employees for the whole tax year. If a benefit is not selected by the employer but is processed through the payroll the employer must report these benefits on a P11D. Benefits may be added or the original application can be changed by the employer if an error was made. Normally the selection of benefits, if no changes were made, would automatically be carried forward to the next tax year.

Posted byDebbie ClarkeinHMRCPayroll Software

Auto Enrolment: Over 200,000 Employers have Complied

In The Pensions Regulator's monthly declaration of compliance report over 200,000 employers have completed their automatic enrolment duties and over 6.5 million employees have been enrolled in an automatic enrolment pension scheme. In July's Declaration of Compliance Report shows that more than 6.5 million employees have began contributing to their pension after having been automatically enrolled by their employer.

Over 156,000 small and micro (up to 9 employees) employers have now declared that they have complied with their automatic enrolment duties. This is over 3 times the amount of medium and large employers that have complied, over 44,000. Over 960,000 employees employed by small and micro employers have been enrolled under automatic enrolment.

Posted byDebbie ClarkeinAuto EnrolmentPayroll Software