Jul 2013
25
Update on Auto Enrolment
Implementing the pension auto enrolment takes about nine months to one year, so it is important to start preparing as soon as possible. It is a statutory process and can not be ignored. There are key staging dates that an employer needs to be aware of (the staging date is when an employer has to start auto enrolling their employees) although it is possible to implement pension auto enrolment before the planned staging date. The employer needs to nominate a contact within the company who will be responsible for implementing the process. Working backward from the staging date the plan should incorporate sufficient time to complete the required processes such as those detailed below as well as developing admin procedures and setting up payroll.
Analyse the existing pension scheme
An existing pension scheme must meet the eligibility laid down by the Pensions Regulator. If no pension scheme is in place then the government NEST scheme may be implemented which has no set up charges.
Assess your workforce
Your workforce should be categorised into eligible jobholders, non-eligible job holders and entitled workers. Eligible jobholders will have to be automatically enrolled. They are aged between 22 and state pension age, have qualifying earnings that trigger automatic enrolment. Non-eligible jobholders are aged between 16-21 or state pension age and 74 and have qualifying earnings that trigger automatic enrolment. Entitled workers have the right to join the pension scheme but do not have qualifying earnings aged between 16 and 74. This should be an annual process once auto enrolment has been implemented.
Communicate with your workforce
Information about pension auto enrolment must be provided to the workers by you the employer in writing. This should preferably be by template letter. You can also decide to provide information sessions to your workforce so they can have their questions answered or you could develop an information booklet (which could be given out during an induction process to new starters).
Inform the Pension Regulator and keep records
You must keep certain records in support of your employer duties that will enable you to demonstrate your on going compliance and you should build these record-keeping requirements into your existing processes. The scheme should be registered with the Pensions Regulator.
Bright Contracts – Employment Contracts and Handbooks.
BrightPay – Payroll & Auto Enrolment Software.
Jul 2013
23
BrightPay supporting Barretstown
Congratulations to our BrightPay team members, Denise and Caroline, on their completion of the PowerFit spinathon in aid of Barretstown.
Thesaurus Software is a strong advocate of Barretstown who offer an invaluable service to society rebuilding the lives of seriously ill children and their families.
We at Thesaurus Software recognise the hard work of all charities and the current difficulties they face in meeting their challenges, to that end we offer all registered charities a free standard payroll software license and customer support on an ongoing basis. Click here for our terms and conditions.
Bright Contracts – Employment contracts and handbooks
BrightPay – Payroll Software
Jul 2013
22
It is important to record the correct number of hours worked by your employees.
HMRC is urging payroll operators to be careful when reporting the RTI hours worked field so staff do not miss out on any benefits owed to them, especially crucial with the roll out of Universal Credits.
Of particular concern to HMRC is the tendency by some employers to mistakenly use the ‘other’ field rather than selected one of the banded-hours options.
An HMRC spokesman said: “It is important to record the correct number of hours your employees have worked to help ensure that they receive the right amount of benefits and tax credits they are entitled to".
For the RTI project to work successfully, HMRC stresses that use of the ‘other’ field is intended only for individuals with an irregular pattern of employment or where the payment relates to an occupational pension or annuity.
The Revenue is also reminding employers, where staff are paid on a quarterly basis, that it is now time to make their first RTI submission of the current tax year.
Bright Contracts – Employment Contracts and Handbooks.
BrightPay – Payroll & Auto Enrolment Software.
Jul 2013
18
First Quarterly PAYE Payment
Some Brightpay advise on your First Quarterly PAYE Payment which is due 19/22 July 2013
Paying by Cheque:The cheque must be received by last working day (excluding weekends and bank holidays) on or before 19th July for 1st PAYE Quarter.
Electronically: Payment must have cleared HMRC bank account by last working day (excluding weekend and bank holidays) on or before 22nd July.
Amount Payable:
Amount payable is the total amount on an employer’s FPS and EPS for the quarter including any corrections or adjustments submitted on or before 19th of July 2013.
Any amended or corrected FPS and EPS received after 19th July (1st Quarter) will be taken into account in calculating your payment for Quarter 2.
You should also use an EPS to tell HMRC if you have no FPS to send as, without it, HMRC will instead calculate what they believe is due and expect you to pay this in full.
Checking your 2013/14 PAYE position:
An employer can use the HMRC online PAYE Liabilities & Payments Viewer (also known as the Business Tax Dashboard) to confirm the real time submissions that HMRC have received and to see both what the employer owes and what they have paid.
Please be aware that the Viewer might not show the most up-to-date position for:
Amount employer owes to HMRC - the Viewer’s ‘Amount due in period’ figure is updated on the 6th and 20th of each month, based on all submissions received to those dates. Any submissions made between these dates will not be reflected until the next update.
What an employer has paid HMRC – there is a slight delay in the payment information reaching the Viewer. Any very recent payments an employer has made may not be shown.
Please note that, even if the employer is a quarterly payer, HMRC will still raise monthly charges. The charges will either be based on the reports the employer has submitted, or where HMRC have estimated what the employer owes. These charges will be reflected on the Viewer, and will be shown as outstanding even if they are not yet due for payment.
Check out your HMRC Payments Record in Brightpay.
Bright Contracts – Employment Contracts and Handbooks.
BrightPay – Payroll & Auto Enrolment Software.
Jul 2013
10
How can RTI returns affect Universal Credit?
Universal Credit is designed to simplify the welfare system for both HMRC and DWP as well as reduce fraud and error.
With that said, Universal Credit payments differ to other benefits, like Child Tax Credits, for example. Based on the information submitted by the employer through RTI, Universal Credit payments can be adjusted on a regular basis each time the employee receives a payment. This information affects how much Universal Credit is paid. Claimants can clearly see they are better off when they work, or increase their take home pay, through the Universal Credit system. In time, most Universal Credit claimants who are employed will be covered by RTI.
Employers are required to submit information to HMRC each time a payment has been made to an employee. In the past, if there was a mistake on the payroll you could fix it by paying or not paying the extra amount, then adjusting the next payslip. If accurate information is not submitted at the right time then this could result in the employee not receiving their Universal Credit payment.
N.B Employees will be keeping a closer eye on their payslips to look for any errors and disputes about the accuracy of their payslip.
Bright Contracts – Employment Contracts and Handbooks.
BrightPay – Payroll & Auto Enrolment Software.
Jul 2013
7
Auto Enrolment
The Government has made changes to encourage people to save for retirement.
People in the UK today can expect to live longer than ever before.
The number of retired people will rise by more than a third by 2050 but there will be relatively fewer working people.
Pension reform aims to help people to save for their retirement so they don’t have to rely only on the State Pension.
The Pensions Act 2008 introduced new duties on employers to provide access to a workplace pension scheme for most workers.
The new duties are being introduced gradually and employers have a staging date based on how many workers are on their payroll. By 2018 all employers must have a scheme in place. You need to know when the duties apply to your organisation and which workers you’ll have to enrol.
The date when the law is 'switched on' for your business is known as your 'staging date'.
Find out your 'staging date' by clicking here.
Bright Contracts – Employment Contracts and Handbooks.
BrightPay – Payroll & Auto Enrolment Software.
Jul 2013
4
Employers Requesting Annual PAYE Payment Scheme
HMRC have confirmed that they have received a number of requests since April 2013 from employers asking to change to annual payment scheme for PAYE.
At the moment they are unable to process requests from employers to:
- · Move to paying annually and register as an annual scheme
- · Change their payment frequency
There will be a fix for this by the end of July and this will be confirmed in the “what’s new” section of the HMRC website. In the mean time employers who are not paying employees should submit a nil Employer Payment Submission by the 19th of each month.
When the fix is in place all requests that have been made will be accepted and changed to annual schemes. These employers will be informed on what action they need to take once the fix is in place.
Bright Contracts – Employment Contracts and Handbooks.
BrightPay – Payroll & Auto Enrolment Software.
Jul 2013
3
Detailed guidance relating to expatriate employees
HMRC have published detailed guidance relating to employers operating PAYE in real time with expatriate employees working either in the UK or overseas.
Part of this guidance reads as follows:
"HMRC will apply a common sense approach to deciding whether we agree that employers of expatriates have a reasonable excuse for not telling us on time about any tax and NICs due on payments and notional payments made in-year to expatriates by third parties and overseas employers; or for not paying this tax and NICs by its due date. In assessing whether we agree that employers have a reasonable excuse, HMRC is not expecting employers to materially change the operation of their current UK or overseas payrolls for making payments to employees where these payroll practices are reasonable and widely accepted."
The full guidance notes can be accessed here.
Bright Contracts – Employment Contracts and Handbooks.
BrightPay – Payroll & Auto Enrolment Software.
Jun 2013
18
Paying HMRC
HMRC have issued guidance (and a reminder) on the PAYE payment position for employers reporting PAYE in real time, as they appreciate that many employers are still getting used to this new way of reporting. Click here for the full article.
Bright Contracts – Employment Contracts and Handbooks.
BrightPay – Payroll & Auto Enrolment Software.
Jun 2013
5
Paying Less Than the Minimum Wage is Totally Unacceptable
HMRC have published news of their compliance action in 2012-13 against employers who were investigated for alleged breaches of the minimum wage rules.
In 2012-13, HMRC investigated 1,693 complaints against employers for allegedly breaching minimum wage rules. This resulted in 708 employers receiving automatic penalty charges of up to £5,000, with 51 of those employers being penalised to the maximum of £5,000.
26,519 employees received an average of approximately £150 in back pay, topping up wages that had previously been below the legal minimum rate.
Employment Minister Jo Swinson said:
"Paying less than the minimum wage is totally unacceptable. Whenever we find examples of businesses breaking the law we will crack down on them.
"Supporting fairness in the workplace is one of our key priorities and the National Minimum Wage is one way of making sure this happens. It supports as many workers as possible without damaging their employment prospects, which is why effectively enforcing the minimum wage is critically important in making sure it stays a success.
"The figures from last year show that HMRC can really help people who have been underpaid to claim back the money they are owed.”
Cases where HMRC has taken action against employers in the past year:
• A major fashion chain was ordered to pay its 90 unpaid interns almost £60,000.
• A multi-outlet retailer, which required employees to purchase specific items of clothing from its range, was ordered to repay almost £170,000 for more than 6,000 workers.
• A national retailer, which required its employees to attend work before and after opening hours without pay, was ordered to pay arrears of wages of more than £193,000 for nearly 3,500 workers.
• A recruitment agency, requiring its workers to attend training at a client's business without pay, was ordered to pay £28,000 for 300 workers.
Michelle Wyer, Assistant Director of HMRC’s National Minimum Wage team, said:
“Paying the National Minimum Wage is not a choice – it’s the law. HMRC enforces the rules, protecting workers from rogue employers, ensuring they get at least the wage to which they are legally entitled.
“Where an employer ignores these rules, we will take steps to ensure arrears are paid out in full and the employer fined. In the most serious cases, criminal prosecution can follow.”
In 2012-13,17,775 people called the Pay and Work Rights Helpline, which provides advice in more than 100 languages, for information or to report an illegal wage which lead to HMRC opening 1,408 enquiries into employers.
