2014/15 Budget Summary for UK Employers

There are a number of 2014-15 Budget measures which will affect the payroll for employers.

As a general rule, effective from 05th April 2014, unless an amended code notification has been received on a form P9 (T), employers should amend 2013-14 codes as follows:

• Tax codes ‘L’ suffix codes – increase by 56; code 944L becomes 1000L 
• The PAYE threshold with effect from 6 April 2014 is raised to £192 per week (£833 per month) 
• The code for emergency use with effect from 6 April 2014 is 1000L

 National Insurance contribution thresholds 2014-15

Statutory Payment Changes 2014/15

Statutory Adoption Pay: Earnings threshold £111.00, Statutory Payment Changes 2014/15
Statutory Adoption Pay: Earnings threshold £111.00, Standard Rate £138.18
Statutory Maternity Pay: Earnings threshold £111.00, Standard rate £138.18
Statutory Paternity Pay: Earnings threshold £111.00, Ordinary Statutory Paternity Pay (Standard Rate) £138.18, Additional Statutory Paternity Pay (Standard Rate) £138.18
Statutory Sick Pay: Earnings threshold £111.00, Standard rate £87.55

• The SSP rate will take effect from 6 April 2014.
• The SMP, SAP, OSPP and ASPP rates will take effect for payment weeks beginning on or after the 1st Sunday in April which is also 6 April 2014.
• There are no changes to the rules and rates for the recovery of SMP, SAP, OSPP and ASPP for 2014-15.
• The Percentage Threshold Scheme for recovery of SSP will be abolished from 6th April 2014.

National Insurance: £2,000 employment allowance

The Government will introduce an allowance of £2,000 per year for all businesses and charities to be offset against their employer Class 1 secondary NICs liability from April 2014.

Exemption threshold for employer provided beneficial loans

Legislation will be introduced in Finance Bill 2014 to increase the exempt threshold for employment-related loans from £5,000 to £10,000 with effect from 6 April 2014.

Posted byKaren McDarbyinNICPAYEPayroll Software

2014 NIC Employment Allowance

The Chancellor announced the creation of a NICs Employment Allowance in the 2013 Budget. The implementation date for this is planned for 06th April 2014.

Businesses, Charities and Community Amateur Sports Clubs will be able to reduce their NICs bill by up to £2,000 per year. The Employment Allowance is to be set against an employer’s liability for secondary Class 1 National Insurance Contributions (NICs) only, not against other NICs such as primary (employee’s) Class 1, Class 1A or Class 1B contributions.

The greatest benefit of this allowance goes to small businesses, as it will reduce their National Insurance Contributions bill the most. Over 90% of the benefit of this allowance will go to small businesses with fewer than 50 employees.

This will also mean that businesses will be able to employ four adults or ten 18-20 year-olds full-time on the National Minimum Wage without paying any employer National Insurance contributions at all.

The claim process for eligible employers is very straightforward and is administered through the payroll;

• Employers will include a flag, within their Employer Payment Summary (EPS) submission via RTI, notifying HMRC that they are claiming the employment allowance.
• The employer then reduces their employers NIC liability until the £2,000 allowance is exhausted (up to a limit of their NI liability, i.e. without resulting in a refund position) on the actual EPS.

The Employment Allowance calculator allows you to see the effect of the Employment Allowance in 2014. For example, you can see the effect on your National Insurance Contributions bill of employing one additional person or you can look at the reduction to your current National Insurance Contributions payments. Simply follow the link to access the calculator;

http://www.employmentallowance.com/allowance-calculator/

Posted byKaren McDarbyinNICPayroll Software

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.

Posted byPaul ByrneinAuto EnrolmentPayroll Software

Changes to UK Employer Payment booklets and letters

This message is to advise employers, agents and payroll providers of a significant change to Employer Payment booklets and letters.

The changes will affect the following documents:

• Employer Payment Booklet (P30BC) - when making a PAYE payment using a pay slip through the post or over a bank or post office counter
• Paying PAYE electronically (P30B) - letters issued to customers about paying electronically
• Paying PAYE (P30B Annual) - letters sent to customers who pay us only once a year using a pay slip

These documents will no longer carry the name, address or phone details of the issuing office. This will apply for:

• the remaining months of the 2013 to 2014 tax year
• the whole of the 2014 to 2015 tax year
• all future years

Each individual document gives guidance on making payments.

The pay slips within the booklet or attached to the P30B Annual letter contain addressed reply envelopes for sending the payment in the post.

The Paying PAYE electronically letter explains how to pay by electronic methods and carries the necessary details and information for making payment.

Posted byAnn TigheinPayroll Software

Employers facing increase in sick pay costs!!

From 6 April 2014, employers will no longer be able to recover payments made for Statutory Sick Pay (SSP). HMRC has made the decision to abolish the Percentage Threshold Scheme (PTS), which is the scheme in place to provide SSP compensation for employers.

Currently an employer is entitled to recover some of the SSP paid to their employees if the total SSP paid in a tax month is greater than a set percentage of their gross Class 1 NICs (employers’ and employees’) liability for that month

Although PTS is being abolished from April 2014, employers will still be able to make claims for reimbursement of SSP under PTS (paid for sickness periods up to 5 April 14) until the end of the 2015/16 tax year.

In addition, the associated SSP record-keeping requirements will also be abolished at the end of 2013/2014. However, employers will still be required to maintain records for PAYE purposes and to demonstrate they are meeting their SSP obligations.

The decision to abolish PTS was made as a result of an independent review which found that the current scheme does not support the proper management of sickness absence in the workplace.

The Government has therefore decided to reinvest the money in a new Health and Work Service (HWS), due to be introduced by the end of 2014. The aim of this service will be to:

• help employees who have been on sickness absence for four weeks or more to return to work,
• support employers to better manage sickness absence among their workforce,
• give GPs access to work-related health support for the patients.

Employers, who want to avoid being faced with increasing costs, need to look carefully at how they manage sickness absence in their workforce. The first point of action will be to implement, or review, the company sickness policy.

Posted byLaura MurphyinCompany HandbookContract of employmentNICPayroll Software

Knowing your responsibilities as a UK employer re student loan deductions

With the increased amount of students entering the workplace owing close to £30000 (for tuition fees averaging £9000 a year along with living costs) it could be many years until a student debt is repaid. Once an employee has commenced employment student loan deductions will be taken at source from their pay and sent by their employer to HMRC so the sooner this begins the sooner the student loan is paid off.

When should an employer begin taking student loan deductions ?

1. When a receipt is received from HMRC of a start notice SL1 informing the employer from when they should start taking the student loan deduction.
2. The employee has a P45 from a previous employer and there is a yes ticked beside liable for student loan or any other mark at item 5 on the P45.
3. If the employee does not have a previous P45 they must complete a starter checklist (similar to a P46 form) one of the questions asks if the student has a student loan that has not been fully repaid and is not being repaid directly to the students loan company. If the employee answers yes student loan deductions are now due.

Where an employee does not provide a P45 to their new employer and a starter checklist is filled out the employee may not admit to having to pay a student loan so the preferred option to set up a new employee would be to receive the P45 from the previous employer or a start notice SL1 which they would receive from HMRC.

Posted byDenise CowleyinPayroll Software

2014 National Insurance: £2000 Employment Allowance

From 2014 every business, Charity and CASCs (Charities and Community Amateur Sport Clubs) will be entitled to an annual “employment allowance” of £2000 to reduce their liability for Class I secondary NICs.

It is expected that up to 1.25 million employers will benefit, with over 90 per cent of the benefit going to small businesses with fewer than 250 employees and it is envisaged that on average, employers with fewer than ten employees will see their employer NICs bill reduced by 80%.

To simply matters HMRC will introduce a new tick box on EPS referring to the employment allowance in the form of a “yes/no” indicator. 

To claim the allowance, the employer will have to signify his intention to claim by completing the yes/no indicator just once.  The employer will then offset the allowance against each monthly Class 1 secondary NICs payment that is due to be made to HMRC until the allowance is fully claimed or the tax year ends.

This  Employment Allowance will apply per employer regardless of how many PAYE schemes that employer chooses to operate.

Posted byAnn TigheinPayroll Software

BrightPay shortlisted for AccountingWeb Software Satisfaction Awards

We are delighted to let you all know that we have been shortlisted by AccountingWeb for their Software Satisfaction Awards – Payroll Category. We would like to say a big thank you to all of our BrightPay customers that gave such positive feedback which has resulted in us being shortlisted. Customer satisfaction is paramount to us here in BrightPay. We will strive to ensure the highest level of customer satisfaction both in our product and service at all times.

The winners will be announced on the 7^th November so wish us luck!

http://www.accountingweb.co.uk/article/software-satisfaction-awards-shortlists-revealed/548792

Posted byCaroline MaloneinAwardsPayroll Software

New PAYE messages to employers from HMRC from 21st October

From this week HMRC will start to send four types of new messages to employers to help them keep their PAYE up-to-date.

These messages will take two formats:

1. The first three are generic electronic messages to warn the employer that their PAYE submissions and payments appear to have fallen into arrears.

2. The fourth one will be a letter, telling an employer that HMRC are cancelling a PAYE scheme that has been inactive for 120 days.

The electronic messages are not penalty notices and therefore an employer should not appeal against them. These messages do not replace the existing compliance communications, which will continue as now.

The aim of these messages is to help employers comply with their PAYE obligations and in particular get their businesses to submit and pay their PAYE to HMRC on time. This will help them get ready for 6 April 2014 when in-year penalties for late reporting and late payment will replace the current end-of-year PAYE penalties. HMRC wants to receive payments and returns on time; it does not want to charge penalties.

The messages warn that the employer may incur penalties in future, even if they have done nothing wrong for 2013-14 (for example if they are a smaller employer taking advantage of the current relaxation for ‘on or before’ reporting). If this is the case the employer does not need to contact HMRC but they should be preparing for 2014-15.

HMRC will update the wording of these messages in April 2014.

Posted byAnn TigheinPayroll SoftwareRTI

8 Reasons why HMRC cancel Employer PAYE Schemes

1.             You have made no submissions using PAYE in Real Time
2.             You have not made any payments to HMRC
3.             You are not an annual payer
4.             There is no evidence that you want to claim CIS Deductions Suffered
5.             You have not received an advance from HMRC
6.             You have not had any periods of Construction Industry Liability
7.             There is no evidence that you have had any employees
8.             There is no evidence that Class 1A NIC is due

Where any of these conditions apply your employer scheme will be cancelled and a letter issued to your business address to advise you of the action taken.  Once the scheme has been cancelled you will not be able to submit any PAYE submissions in Real Time.  If your scheme should not have been cancelled the letter covers who you should contact in HMRC to request that your scheme is reopened.

Posted byAnn TigheinHMRCPayroll Software