Aug 2014
19
National Payroll Week – Time to get creative!
From 1st to 5th September 2014, companies across the UK will be celebrating National Payroll Week. This year, NPW focuses on how we are educating the nation, raising financial awareness and the importance of saving for retirement.
The annual campaign has two aspects; to recognise the hard work, effort and invaluable contributions made by payroll staff on a daily basis, and to educate the workforce assisting individuals know more about their pay checks and payroll related aspects.
Across the country, payroll staff ensure that millions of people are paid the right amount at the right time, every pay period. Payroll continues to evolve into a profession that requires multiple skills, from the fundamentals of operating a payroll to implementing complex legislation, such as the requirements for auto-enrolment.
This year, many changes have been made to payroll processes, especially regarding auto-enrolment, which affects almost all employees. NPW is an ideal time to inform employees about auto-enrolment so that they understand the new pension scheme and their entitlements.
All companies can benefit from celebrating NPW as it helps educate your employees on their payslips, what their deductions are and the importance of saving for retirement. Make sure you and your payroll team get involved in the payroll profession's biggest celebration in 2014. You can request a NPW pack –including posters, stickers, and balloons – by emailing [email protected]. CIPP encourages creativity in celebrating NPW and like to hear how companies got involved.
Last year’s theme was “it pays to learn”, with companies celebrating through a range of events including cake sales, team days out, walk-in sessions, payroll quizzes, competitions and volunteering for local charities. Some organisations used the opportunity to introduce changes in their payroll processes, such as e-payslips.
For more information on National Payroll Week visit www.nationalpayrollweek.co.uk
Aug 2014
13
Many SMEs Unaware of Auto Enrolment Burden
As of now, all organisations with 60 or more employees have reached their auto-enrolment staging date. Over the next four years, 1.3 million SMEs will be legally obliged to offer their workforce a pension scheme.
Unfortunately for smaller businesses, many are still unaware of the burdens of preparing for auto-enrolment.
The Shocking Truth
Recent research revealed some alarming statistics regarding how unprepared SMEs really are. According to the research:
• Two-thirds of SMEs (67%) have no idea when their auto-enrolment staging date is
• 49% of respondents understand little or nothing about the changes they need to make
• 32% of respondents felt they do not know enough about auto-enrolment to be able to determine its impact on their company.
It is worrying that so many employers are oblivious to the challenges ahead. A later staging date for SMEs is no reason for inertia; the earlier an employer begins to prepare the easier the transition will be. Planning for auto-enrolment can be a time-consuming exercise and does need considerable preparation. Employers need to consider a number of factors, including:
• How to prepare the company financially
• What pension scheme to opt with
• Using payroll to process pension contributions
Late fees may drive up financial burden
Preparing for auto-enrolment from a financial perspective is critical. Employers must pay contributions to their employees’ pension schemes, which will rise to a minimum of 3% of employees’ basic pay by 2018. However, additional charges may also apply, including potential fines if SMEs are late in setting up their auto-enrolment pension scheme.
Standard Life estimates that it could cost SMEs up to £34,000 to backdate contributions for just three months. The Pensions Regulator has the power to fine employers with less than 250 employees a maximum of £2,500 per day if they don't comply with their new duties on time. Late payment may also lead to employers liable to meet their employees' missed contributions if the employee is unwilling to do so.
All can be made easier...
Although these additional fees pose further risk to SMEs, it is not as dreadful as it sounds. By using a payroll provider, auto-enrolment is made easier and more understandable with less risk of making avoidable mistakes. By finding the right software to suit your company, administration charges can be kept to an absolute minimum.
To avoid penalties and costs, SMEs need to prepare themselves today. In a sea of additional charges and red tape, SMEs are advised to shop around to find the best pension scheme and payroll provider that suits their needs.
Many SMEs are unprepared for the financial burdens lying ahead, and to begin, employers are urged to become aware of their staging date as soon as possible. The earlier you begin to plan and seek expert advice, the less of a headache auto-enrolment will be for your business.
May 2014
1
Auto enrolment - staging forecast
The Pension regulator has published an updated forecast report for the number of employers due to become subject to automatic enrolment duties over the next four years. The update shows around 30,000 medium sized employers reach their “Staging Dates” between April 2014 and the end of this tax year. The forecast sets out their expectations of when medium, small and micro employers are likely to become subject to the new automatic enrolment duties (their staging date).
It is being provided to assist pension providers, advisers and other intermediaries with capacity planning but should only be used as a broad indicator. The forecast is based on PAYE information as at 1st April 2012. The forecast is only an estimate of the number of employers PAYE schemes expected to become subject to the automatic enrolment duties. It is based on a number of assumptions and the number of employers actually falling within the duties will vary depending on a number of factors.
Mar 2014
24
BrightPay 14/15 is Now Available. What's New?
BrightPay 14/15 is now available to download. Here’s a quick overview of what’s new:
2014/15 Budget Changes
- 2014/15 PAYE thresholds
- 2014/15 National Insurance contributions rates and thresholds
- 2014/15 Student Loan threshold
- 2014/15 Statutory payments rates and thresholds
- The emergency tax code has changed from 944L to 1000L.
- Eligible employers can claim the new £2000 Employment Allowance which can be used to reduce Employer Class 1 Secondary NICs payments to HMRC.
- Retirement of the regional employer NICs holiday scheme
- Statutory Sick Pay is no longer recoverable
Automatic Enrolment
BrightPay 14/15 has complete functionality to enable you to automatically enrol your employees into a qualifying pension scheme:
- BrightPay allows you to record your automatic enrolment staging date. When the staging date has been reached, automatic enrolment functionality will automatically kick in.
- BrightPay will assess your employees, monitor eligibility criteria, and let you know:
- who must be enrolled into a qualifying scheme
- who has the right to opt in to be enrolled in a qualifying scheme
- who can request to join a pension scheme
- BrightPay walks you through all the various automatic enrolment processes:
- postponing assessment
- enrolling employees
- handling opt-ins and joining
- handling opt-outs and refunds
- BrightPay enables you to generate tailored communication letters and notices to employees
- BrightPay tracks records on a period by period basis, allowing you to see exactly what changes, actions and contributions are made throughout the year. You can produce custom reports with the exact information you require.
- BrightPay has dedicated support for the automatic enrolment qualifying pension scheme offered by the National Employment Savings Trust (NEST), allowing you to:
- set up your NEST scheme, group and payment sources
- create enrolment and contribution submission CSV files for uploading to NEST
- We plan to add dedicated support for other pension scheme providers, but for now BrightPay offers generic support for any automatic enrolment qualifying scheme which you can use in conjunction with BrightPay's built-in reporting tools to operate your scheme.
For more information on automatic enrolment, see our automatic enrolment blog or the guide for employers on The Pensions Regulator website.
Real Time Information (RTI)
This time last year we launched BrightPay 13/14 with full support for RTI.
In 14/15, there are some new features and improvements:
- From 2014/15, HMRC will be introducing penalties for late Full Payment Submissions (FPS). To help determine whether any late filing penalties are due, HMRC request that a late reporting reason be included with late submissions. BrightPay will detect when an FPS is late, and prompt you to select a reason.
- Support for the new FPS contracted hours worked per week bands
- Ability to set/change the Payroll ID for any employee (start of year or mid year)
- New Employment Allowance indicator on EPS
- Bank account information on EPS
- Improvements to the RTI interface in BrightPay, including the ability to view total amounts of the values in an FPS.
- We received feedback from HMRC about the most common data errors that occur in submissions from BrightPay customers, and so have made many improvements to prevent these from happening. For example:
- Improved wording on notifications
- Better validation at the data entry stage
- Forced UK data formats for users on non-English operating systems
- RTI messages and logs are now stored in a compressed format in your data file, which should greatly help to reduce file size.
BrightPay – New Features
With RTI and Automatic Enrolment, the last couple of years have seen many changes to UK payroll. This in turn has required a lot of supporting development to be done on BrightPay. So with these out of the way, we are excited to get back to adding unique features and making BrightPay the best payroll software on the market. Here are the new features we've completed for this first 14/15 release:
- Ability to add an addition (new or existing type) to multiple payslips at once
- Ability to add a deduction (new or existing type) to multiple payslips at once
- Ability to set a note on multiple payslips at once
- Ability to edit the FPS settings for multiple payslips at once
- Ability to record absence and strike on employee calendar
- Ability to record part day annual leave, unpaid leave, absence or strike on employee calendar
- Ability to print the employee calendar and overview of leave for one or multiple employees
- Ability to print a summary of company annual leave entitlement
- Ability to create a BrightPay employer file without a password (and remove the password from an existing file)
- Ability to see the most recent time a payslip was printed, emailed, or exported.
- Ability to import employee details from Bright Contracts
But that's not all – we've got some great plans for what's coming next. And like previous years, you won't have to wait until 15/16 – we'll be releasing new features to 14/15 users when they are ready. Watch this space!
Other Improvements in BrightPay 14/15
- Improved aesthetics (including graphics fixes for Windows 8 users).
- Performance enhancements – we've upgraded much of the core technology that powers BrightPay to the latest version, bringing with it faster and better number crunching.
- Minor user interface tweaks to make BrightPay even easier to use.
- Lots of minor bugs have been squashed.
BrightPay 14/15 will be the same price as BrightPay 13/14 (including FREE for small employers with up to three employees). Support will continue to be free of charge for all users.
Mar 2014
12
CIPP launches Auto Enrolment forum
The CIPP has launched what should become a successful forum for collecting information regarding pensions auto enrolment , called “The Friends of AE”.
Its central aim is to be “a joint capacity crunch task force” and is open to any organisation that wants to work together on the practical issues facing employers through sharing ideas, experiences , problems and solutions.
It is free to join The Friends of AE and the people most likely to benefit from the membership are:
• People who provide any services or solutions to the pensions auto enrolment marketplace
• If you are an employer that has already staged and would be happy to share your knowledge and insight into the process of auto enrolment.
• If you are an employer that has not yet staged and would like to be more informed and have access to the experience and advise of others that have already staged.
By the time the summer of 2017 arrives there will be in and around 135,000 companies staging per month so the CIPP feel that payroll, pension software and intermediary industries need to collaborate to help employers brace for the operational impact of auto enrolment and that is what The Friends of AE is all about.
Feb 2014
7
Auto enrolment and the small employer
UK businesses with less than 30 employees will be impacted by auto enrolment from the start of 2016.
BrightPay will be a great aid with auto enrolment as it already has all the information required to assess which of your staff should be enrolled and then to handle the pension deductions (and your contributions) in the manner prescribed by the regulations.
Apart from assessing employees and handling deductions, there are numerous additional auto enrolment tasks that BrightPay will help you with. An example of this is producing the letters or emails that must be sent to your employees on enrolment (or postponement).
A month or two before your staging date (the date on which your auto enrolment responsibilities commence), decide which pension provider to use and register with that provider. NEST is probably the most popular scheme as it is government backed and has an obligation to accept employers of all sizes and employees of all earnings. This is different to some schemes who may attempt to cherry pick who they take on.
When your staging date arrives, an hour or two should be sufficient to deal with the following auto enrolment tasks:
- enrolling all relevant employees (i.e. all eligible jobholders)
- communicating as required to all employees
- setting up and commencing employee deductions and employer contributions
BrightPay will guide you through the above tasks.
From that point on it is just a matter of monitoring. The initial month or two after staging you will need to deal with any requests from employees to opt out and any requests from employees, who you were not obliged to enrol, to opt in (or join).
BrightPay will monitor the age and earnings of your staff in each subsequent pay period to see if any further enrolments are required and if any new employees should be enrolled. For most small businesses, these enrolment events will probably happen no more than once or twice a year and each such event should only take a few minutes to process.
A contribution file will need to be submitted after each pay period to the pension provider and payments of all amounts due must be made by 22nd of the following month. This file will be produced by BrightPay in much the same way as RTI files are currently produced.
So, your new payroll workflow will be something like:
- Process hours, overtime etc.
- Deal with any enrolment events identified by your software
- Finalise the pay period
- Distribute payslips
- Submit RTI file to HMRC
- Submit contribution file to the pension provider
Steps 2 and 6 are new.
In conclusion, staging will be a small bit of work but, after that, auto enrolment should become a seamless part of your payroll process.
Jan 2014
25
Auto enrolment and BrightPay
You have probably heard about automatic enrolment by now. If you don't yet know what it is, or if you need a quick reminder, there is a very helpful guide to automatic enrolment at The Pensions Regulator website.
What is my Staging Date for Automatic Enrolment?
The staging date is when you must automatically enrol your employees into a qualifying pension scheme.
You can find out your staging date at the Pensions Regulator website link given above. If you have less than fifty employees, your staging date will be no earlier than 1st August 2015 (subject to very few exceptions).
If need be, you can postpone your obligations for a further three months from your staging date.
Will BrightPay support Automatic Enrolment?
The Pensions Regulator Automatic Enrolment guide suggests that supporting software should:
- enable you to assess your workforce (existing and new employees), monitor eligibility criteria, and enrol staff into a qualifying pension scheme
- allow the postponement of auto enrolment for relevant employees
- calculate pension contribution amounts
- handle opt-ins and joining
- handle opt-outs and refunds
- support you in generating and issuing communications to your staff
- keep records and provide reports
- interoperate with some or all pension scheme provider systems for information/payment submissions
BrightPay 2014/15 will support all of these requirements. We plan to initially provide interoperability with NEST, and will be working with other providers as time goes on.
If automatic enrolment is not relevant for you in 2014/15, the only changes you will notice in BrightPay are that you may be asked to enter your staging date, and that the completion of the date of birth field will be mandatory for all employees.
Will there be an additional charge for Automatic Enrolment functionality in BrightPay 2014/15?
No. We will continue to offer the same simple pricing model, including free support.
Please keep an eye on our blog for further updates on automatic enrolment and how it works in BrightPay.
If you have any more questions, please call or email us. We are confident that automatic enrolment will be easy with BrightPay.
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
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.
