Jul 2015
8
UK Emergency Budget
Chancellor George Osborne has delivered his emergency budget, setting out the new Conservative government’s plans for the nation’s finances. So here are the key points for payroll.
- A compulsory national living wage for working people aged 25 or over will be introduced in April 2016, set at £7.20 an hour and rising to £9 by 2020.
- The National Insurance Employment Allowance for small firms will be increased by 50% to £3,000 from 2016.
- The tax-free personal allowance will be raised to £11,000 next year. After that, the personal allowance will always rise in line with the National Minimum Wage.
- The higher tax rate threshold will rise to £43,000 next year.
Student maintenance grants will be abolished from 2016, replaced with loans, which people will start to pay back when they earn over £21,000. The maximum value will be increased to £8,200.
May 2015
29
Childcare subsidy to be doubled
Queen’s Speech announces doubling of Childcare subsidy from 15 to 30 hours a week.
Plans to double state-subsidised childcare for three- and four-year-olds to 30 hours a week were set out in the Queen’s Speech to the new parliament, this week.
Already, children of this age in England are entitled to 570 hours of free early education or childcare a year. This works out at 15 hours a week for 38 weeks of the year.
Legislation was also announced to ensure that increases to the Income Tax personal allowance would reflect changes to the national minimum wage. In future, people working 30 hours a week on the minimum wage will not pay Income Tax.
Other plans announced include ensuring there are no rises in Income Tax, VAT or National Insurance for the next five years, reform to strike laws and reducing “red tape” on small businesses.
Jan 2015
20
Calculating Holiday Pay – Updated Guidance
In light of a number of recent court judgements and the resulting changes to regulations, Acas has updated their holiday pay guidance to assist employers in calculating holiday pay.
Several key points that employers should be aware of:
- Guaranteed and normal non-guaranteed overtime should be considered when calculating a worker's statutory holiday pay entitlement but there is currently no definitive case law that suggests voluntary overtime needs to be taken into account.
- Commission should be factored into statutory holiday pay calculations.
- A worker's entitlement to holiday pay will continue to accrue during sick leave (both paid and unpaid). If a worker is unable to take their annual leave in their current leave year because of sickness, they should be allowed to carry that annual leave over until they are able to take it, or they may choose to specify a period where they are sick but still wish to be paid annual leave at their usual annual leave rate.
- There are different rules for calculating holiday pay depending on the working patterns involved: (a) For workers with fixed working hours - If a worker's working hours do not vary, holiday pay would be a week's normal remuneration. (b) For workers with no normal working hours - If a worker has no normal working hours then their holiday pay would still be a week's normal remuneration but the week's pay is usually calculated by working out the average pay received over the previous 12 weeks in which they were paid. (c) For shift workers - If a worker works shifts then a week's holiday pay is usually calculated by working out the average number of hours worked in the previous 12 weeks at their average hourly rate.
- Workers must take their statutory paid annual leave allowance and can only be 'paid in lieu' for this when their employment ends. While workers are in employment, 5.6 weeks of their annual leave (this is the amount all UK workers are statutorily entitled to) must be taken and cannot be 'paid off'. Anything above the statutory allowance may be paid in lieu but this would depend on the terms of the contract. When a worker's employment is terminated, all outstanding holiday pay that has been accrued but not taken (including the statutory allowance) must be paid.
- Work-related travel may need to be factored into statutory holiday pay calculations.
The Government has also introduced regulations to take effect from 1 July 2015 to limit and clarify the maximum amount of back-dated holiday pay that can be claimed. The change will mean that when making claims for a series of backdated deductions from wages, including any shortfall in holiday pay, the period that the claim can cover will be limited to a maximum of 2 years.
Further information in addition to the above can be found on the ACAS website at holiday pay guidance.
Nov 2014
9
New 2015 Living Wage Rate announced
The UK "living wage" - an hourly rate based on the amount needed to cover the basic costs of living - has been raised by 20p to £7.85, whilst The London Living Wage has been raised from 8.80 an hour to £9.15.
What is the difference between the Living wage and the national minimum wage?
The living wage is an informal benchmark, not a legally enforceable minimum level of pay line the national minimum wage. The national minimum wage is set by the business secretary each year on the advice of the Low Pay Commission. Unlike the living wage, the national minimum wage is enforced by HM Revenue and Customs (HMRC).
The basic idea of the living wage is that these are minimum pay rates needed to let workers lead a decent life.
Does this effect employers?
The living wage is a voluntary wage so employers are not legally obliged to pay it. Nevertheless, it has been adopted by more than 1,000 employers across the country benefitting 25,000 workers. Citizens UK, the community behind the living wage project say that the number of companies paying the rate has doubled in the last year. However, some business groups are not happy with the increase saying some employers might struggle to pay it.
The advice to employers should be to seriously consider the living wage, but only implement it if it is affordable.
Bright Contracts – Employment Contracts and Handbooks.
BrightPay – Payroll & Auto Enrolment Software.
Oct 2014
12
Are you as an employer rewarding your staff enough?
In a recent survey conducted by Tower Watson Global workforce study it has been revealed that 31% of UK employers give bonuses to employees with the lowest performance rating. The group surveyed over 30,000 employees including 1,863 in the UK and found that employers are spreading the pay pot out more thinly in recent years with the effect that it is widening the gap between pay and performance.
Only 39% of UK workers see a clear link between their pay and performance. The research also found that UK organisations are not differentiating pay sufficiently for top staff.
The top consideration for UK staff when deciding to join or stay in a job remains the salary, the research found the UK bosses are falling short on how they deliver pay programmes including basic salary & bonuses. Nearly half (44%) of employees say their organisation does a good job explaining its Pay/Bonuses Programmes but not surprisingly less than half (43%) of people surveyed believe their employer rewards them adequately for breakthrough and innovative ideas and suggestions.
Oct 2014
8
Do you wear a uniform to work?
Uniform tax rebate is not yet widely known, yet it affects almost 43% of the British public. It is a rebate scheme introduced by the HMRC for people who wear a uniform or protective clothing to work. Under the rebate scheme, qualifying employees may be able to reclaim tax from the past four years.
To be able to claim the tax relief, ALL of the following must apply:
· You wear a recognisable uniform that shows you've got a certain job, like a branded T-shirt, nurse or police uniform.
· Your employer requires you to wear it while you're working.
· You have to purchase, clean, repair or replace it yourself. However, you can't claim if your employer washes your kit, provides facilities to do so (even if you don't use them) or pays you for doing this maintenance.
· You paid income tax in the year you are claiming for.
The amount of tax relief an employee can claim will depend on the industry. For tax year 2014/15, the standard flat rate expense allowance (FREA) for uniform maintenance is £60. Therefore basic rate taxpayers can claim £12 back and higher rate payers £24. Some occupations have more specific limits, often where specialist uniforms are required. A full list of occupations and their corresponding allowances can be viewed here.
Employees wishing to claim this tax relief for the first time can do so by filling in form P87 online, printing it out and posting to:
HM Revenue & Customs
Pay As You Earn
PO Box 1970
Liverpool
L75 1WX
Employees should allow five weeks for HMRC to process their claim, who will then confirm in writing how much you are entitled to.
Oct 2014
1
UK Minimum Wage changes from 1st October 2014
The minimum wage is rising today in the biggest increase since the 2008. The new national minimum wage rates from 1 October for England, Scotland, Wales and Northern Ireland are as follows:
• £6.50 per hour for the adult rate - a 19p (3 per cent) increase
• £5.13 per hour for 18 to 20-year-olds - a 10p (2 per cent) increase
• £3.79 per hour for 16 to 17-year-olds - a 7p (2 per cent) increase
• £2.73 per hour for apprentices - a 5p (2 per cent) increase
Vince Cable, the Business Secretary, said the minimum wage was a “vital safety net” for low-paid workers. “As signs of a stronger economy start to emerge, we need to do more to make sure that the benefits of growth are shared fairly across the board,” he added.
Sep 2014
8
1st October 2014 extends new rights to UK fathers/ mothers’ partners to attend Ante Natal appointments
Time off for ante-natal appointments: extended to fathers/mothers' partners with effect from 1 October 2014. Fathers/mothers' partners, including agency workers, will be given a new right to take unpaid time off work, of up to a maximum of 6.5 hours each occasion, to attend up to two ante-natal appointments (there will be no service requirement for this, although agency workers must have fulfilled the 12 week qualification period)
A guide for employers and employees available at www.dti.gov.uk/workingparents.
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
Jun 2014
9
Thousands of underpaid workers benefit from HMRC NMW investigation 6 June 2014
More than 22,000 workers denied the National Minimum Wage (NMW) have received £4.6m in unpaid wages following an HMRC crackdown.
HMRC conducted 1,455 NMW investigations in 2013/14 and found arrears in 47% of cases – the highest strike rate since NMW was introduced.
During the period, HMRC issued 652 financial penalties worth £815,269 and recovered average arrears of around £205 per worker.
Jennie Granger, director of enforcement and compliance at HMRC, said: “Paying the National Minimum Wage is not a choice – it’s the law. HMRC will continue to ensure that workers get at least the wage to which they are legally entitled.
“Where an employer ignores these rules, we will ensure that any arrears are paid out in full and the employer is fined. Rogue employers be warned – we will find you and you will pay.”
In one case a social care provider had not paid its staff for travelling time and other hours worked and was told to repay over £600,000 to almost 3,000 workers.
And a recruitment agency was ordered to pay £167,000 to workers, including some it had classified as unpaid interns.
As a result of the investigations, TUC general secretary Frances O’Grady is calling for further action to be taken by the government and for employers that knowingly underpay their staff to be named and shamed.
“Nearly a million UK workers rely on the national minimum wage, which has become a vital lifeline. There must be no hiding places for companies who flout it.
“The action taken by HMRC is a welcome step but must be the beginning of a concerted campaign that also raises awareness about the right to a legal wage among those being exploited.”
Bright Contracts – Employment contracts and handbooks.
BrightPay – Payroll & Auto Enrolment Software.
