Payroll Update and Sage Payroll Seminar 2016
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Payroll is a constantly changing system and keeping up to date with payroll legislation and how this affects you and your staff can be difficult. We are holding a half-day seminar to provide a cost effective, local way of being up to date with payroll and Sage.
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Payroll Update and Sage Payroll Seminar 2016
- 1. Payroll Update 2016/17 Eve Iunco – Payroll Services Manager Matt Harris – Sage Advisor
- 2. www.francisclark.co.uk Payroll Update • Tax Changes • Transferrable Personal Allowance • NIC Changes • Employment Allowance • Statutory Payments/Student Loans • Shared Parental Leave and Pay • Workplace Pensions Update - AE • Holiday Pay • Rolled Up Holiday Pay • Tax Free Childcare Scheme • Real Time Information • Other Items
- 3. www.francisclark.co.uk Tax Changes • Standard allowance increasing by £400 to £11,000 • Relates to everyone • Emergency Tax Code 1100L • Thresholds • Basic £0 - £32,000 – addition of £215 • Additional £32,001 - £150,000 – reduction in range of £215 • Higher over £150,000 – no change • No change to tax rates
- 4. www.francisclark.co.uk Tax Changes • Scottish Rate of Income Tax (SRIT) • What is a Scottish Taxpayer • S Prefix • Watch out for Welsh Rate
- 5. www.francisclark.co.uk Transferrable Personal Allowance • Effective from April 2015 • Basic Rate tax payer can transfer unused Personal Allowance • Between married couples and civil partners • Proportion allowed to transfer is 10% of Personal Allowance • 2016-17 means £1,100 – tax saving of £220 • 2 new tax suffixes • N = the transferor, M = the recipient
- 6. www.francisclark.co.uk Transferrable Personal Allowance • Register Online • Information required: • Claimant and partners NI numbers • Proof of identity • Remains in place until cancelled • Person transferring allowance makes claim • Fully operational from October 2015
- 7. www.francisclark.co.uk NIC Changes • New thresholds per week • Lower Earnings Limit (LEL) stays the same at £112 • Primary Threshold (PT) E’ees NIC stays the same at £155 • Secondary Threshold (ST) E’ers NIC stays the same at £156 • Upper Accrual Point (UAP) abolished • Upper Earnings Limit (UEL) up to £827 • Upper Secondary Threshold (UST) up to £827 • No change to rates
- 8. www.francisclark.co.uk NIC Changes • Employer National Insurance abolished for under 21 year olds • Must be earning below the UST (Upper Secondary Threshold) • Employer National Insurance paid on any amount above UST • Still a requirement to record levels • Use Category M • Employee moves back on to standard letter on first pay day on or after 21st birthday
- 9. www.francisclark.co.uk Apprentices Under 25 • Employer National Insurance abolished for apprentices under 25 year olds • Category H introduced for this • Where employee is under 21 and an apprentice Category H to be used • What is an apprentice? • Apprenticeship Levy from April 2017
- 10. www.francisclark.co.uk Employment Allowance • From April 2016 no longer available to Director Only payroll schemes • Not available to domestic employers (employing nanny, gardener, chauffeur, au pair) and public authority, NHS services, GP services, prison services, anything for local authority • Employer can claim £3,000 against Employers National Insurance from April 2016 • Can be claimed in lump sum or over year • Not £3,000 per payroll scheme, it’s per employer
- 11. www.francisclark.co.uk Statutory Payments • National Minimum Wage • Above school leaving age but under 18 - £3.87 per hour • 18 to 20 - £5.30 per hour • Apprentices - £3.30 per hour • 21 to 24 - £6.70 per hour • Presume rates to change in October 2016
- 12. www.francisclark.co.uk Statutory Payments • National Living Wage • Introduced from 1 April 2016 • Applies to those 25 and over • Rate is £7.20 per hour • Voluntary Living Wage • London - £9.40 • Rest of UK - £8.25
- 13. www.francisclark.co.uk Statutory Payments • SSP – no change £88.45 per working week • Fit For Work Service (FFWS) • SMP – no change £139.58 per week from 6 April 2015 • SPP/SAP/SPP(A) no change £139.58 per week • ShPP £139.58 per week • Small Employers Threshold – no change
- 14. www.francisclark.co.uk Statutory Payments • Student Loans – Two plans from April 2016 • Plan 1 – Loan taken out before September 2012 • Plan 1 threshold increased to £17,495 • Plan 2 – Loan taken out from September 2012 and home address in England or Wales • Plan 2 threshold £21,000
- 15. www.francisclark.co.uk Statutory Payments • Notifications • P45 – No change to form so default position is Plan 1 • SL1 – Student Loan notification will state which plan • New Starter Form – Extra questions relating to Student Loans required
- 16. www.francisclark.co.uk Statutory Leaves and Payments • Adoption Leave and Pay • From April 2015 available for Foster for Adoption (England) • From April 2015 available for surrogacy arrangements re adoption once child is adopted • Leave becomes a day 1 right (just as maternity) • Pay remains a conditional entitlement • For placements on or after 5 April 2015
- 17. www.francisclark.co.uk Statutory Leave and Payments • Statutory Paternity Leave and Pay • Ordinary paternity leave and pay just called paternity leave and pay • Additional paternity pay and leave being abolished where the baby is due/placed after 5 April 2015 • Being replaced by Shared Parental Leave and Pay
- 18. www.francisclark.co.uk Shared Parental Leave and Pay • Applies to births/placements expected on or after 5 April 2015 • ShPP is £139.58 per week (or 90% average weekly earnings if lower) • This is a choice between eligible couples • Leave must be agreed by and notified to employer • Couples can change their minds
- 19. www.francisclark.co.uk Shared Parental Leave and Pay • Eligibility • Birth – where mother and father will have main responsibility for care of the child in it’s first year • Adoption – where primary and secondary adopter will have main responsibility for the care of the child • Stage 1 test – Joint Economic Activity Test • Been engaged in employment or self employment in the UK for any 26 weeks of the last 66 weeks that immediately precede the QW/MW • Average weekly earnings that are not less than £30 for any 13 week period in the tax year prior to the tax year of the expected birth/placement
- 20. www.francisclark.co.uk Shared Parental Leave and Pay • Stage 2 test – Personal Eligibility to Share • Leave - Have at least 26 weeks continuous service with the same employer at QW/MW and still be working for that employer when they intend to take leave • Pay – Have average weekly earnings at or above LEL for NIC in the 8 weeks prior to QW/MW • Two notifications required – notice of entitlement and notice of absence • Not binding until curtailment of SML and SMP
- 21. www.francisclark.co.uk Shared Parental Leave and Pay • Curtailing of Maternity Leave and Pay • 8 week notification period • Must take compulsory leave on maternity and adoption • Continuous or Discontinuous leave – single blocks or multiple blocks • ShPL1 form • Discussion period re discontinuous blocks
- 22. www.francisclark.co.uk Shared Parental Leave and Pay Mum takes 25 weeks SML Mum takes 25 weeks SMP Dad takes 10 weeks ShPL Continuous Dad has 10 weeks ShPP Mum has 4 weeks ShPP Total 39 weeks pay (25 + 10 + 4 = 39) Mum takes 17 weeks ShPL Continuous Total 52 weeks leave (25 + 10 + 17 = 52) Baby Born Share Notice and Curtailment given 8 weeks earlier Sharing starts for Dad Sharing starts for Mum Child one year old
- 23. www.francisclark.co.uk Shared Parental Leave and Pay Mum takes 25 weeks SML Mum takes 25 weeks SMP Mum has 14 weeks ShPP Total 39 weeks pay (25 + 14 = 39) Mum takes 22 weeks ShPL Total 47 weeks leave (25 + 22 = 47) Baby Born Share Notice and Curtailment given 8 weeks earlier Sharing starts for Mum Child one year old 5 weeks work (Gran looks after baby)
- 24. www.francisclark.co.uk Shared Parental Leave and Pay Mum takes 10 weeks SML Mum takes 10 weeks SMP Mum and Dad takes 21 weeks ShPL each at the same time Mum has 15 weeks ShPP and Dad has 14 weeks ShPP Total 39 weeks pay (10 + 15 + 14 = 39) Total 52 weeks leave (10 + 21 + 21 = 52) Baby Born Share Notice and Curtailment given 8 weeks earlier Sharing starts for Mum and Dad Child one year old
- 25. www.francisclark.co.uk Shared Parental Leave and Pay Mum takes 10 weeks SML Mum takes 10 weeks SMP Mum and Dad takes 21 weeks ShPL each alternate weeks Discontinuous Mum has 15 weeks ShPP and Dad has 14 weeks ShPP Total 39 weeks pay (10 + 15 + 14 = 39) Total 52 weeks leave (10 + 21 + 21 = 52) Baby Born Share Notice and Curtailment given 8 weeks earlier Sharing starts for Mum and Dad Child one year old
- 26. www.francisclark.co.uk Shared Parental Leave • KIT days = 10 in Maternity Leave Period • SPLIT days = 20 per parent in Shared Parental Leave Period • Backdated Pay Rise – Mrs Alabaster rules do not count unless pay rise is in 8 week period for average weekly pay calculation • Leave has to be taken in complete weeks • Watch out re contractual payments – how are employers to deal with this? • Leave and Pay to cease by child's first birthday • Recovery is same as other statutory payments
- 28. www.francisclark.co.uk Auto-Enrolment and Pension Update • Staging Dates • Pension Scheme • Qualifying Earnings • Phased In Pension Rates • Opt In/Join • Opt Out/Leave • Postponement • Communications
- 29. www.francisclark.co.uk Assessing Your Workforce 16 yrs up to 22 yrs 22 yrs – SPA** SPA** up to 75 yrs Below £5,824* Between £5,824 and £10,000* Over £10,000* Entitled Worker Non Eligible Jobholder Non Eligible Jobholder Eligible Jobholder Non Eligible Jobholder * Figures based on 2016-17 levels. Figures expected to change each tax year. ** SPA = State Pension Age
- 30. www.francisclark.co.uk Auto-Enrolment Changes • Correspondence simplified • Exceptions for certain workers • Pot Follows Member – April 2018 • Setting up schemes with pension providers • New tax year for existing AE pensions
- 31. www.francisclark.co.uk How to deal with AE • Do It Yourself • Francis Clark’s Payroll Services • Process Within Sage Payroll • Francis Clark Financial Planning • Auto-Enrolment Service
- 32. www.francisclark.co.uk Holiday Pay Calculations • Mr Locke –v– British Gas - ECJ ruling re holiday pay and commission payments • November 2014 – 3 employment tribunal rulings re the following: • Guaranteed overtime • Non guaranteed overtime • Any taxable payment that is made for time travelling to work • No ruling on voluntary overtime
- 33. www.francisclark.co.uk Holiday Pay Calculations • So what advice can we give to help with this? • Still no definitive answer at the moment • Advice at the moment is not to pay but accrue for the extra in accounts • Calculation of extra holiday pay as follows: • Average of last 12 weeks before holiday is taken • Backdated claims
- 34. www.francisclark.co.uk Rolled Up Holiday Pay • Holiday Pay should be paid at the time holiday is taken • Zero Hours Contracts • Three instances where it can be rolled up • It is clearly stated in the contract and proportion being used • Clearly stated on the payslips as holiday pay • Employer encourages employee to take holiday where practical
- 35. www.francisclark.co.uk Payrolling Benefits • This is voluntary from April 2016 • Employer must register for service before payrolling benefits • What cannot be payrolled? • Vouchers and credit cards • Living accommodation • Beneficial/interest free and low interest loans • Take advice on how to deal with these
- 36. www.francisclark.co.uk Tax Free Childcare Scheme • Eligibility • Children must be 12 or under (disabled under 17) • Parent(s) must be in work and over 16 • Meet “minimum income limit” • Resident in UK • Not receiving childcare support • Not on Childcare Voucher scheme • Annual earnings less than £100,000 each • Open an Online Account • Receive 20p for every 80p saved • Childcare Vouchers
- 37. www.francisclark.co.uk Real Time Information - Update • Year end deadline is 19 April 2016 • P35 questions are not necessary but if on system need to be submitted • Penalties for late payment and late submission • Appeal within 30 days of date of penalty either online or in writing • Address details requested for all employees • SCON must be actual number not dummy number from April 2015 • EPS should have tax month on it
- 40. www.francisclark.co.uk (c) copyright Francis Clark LLP, 2013 You shall not copy, make available, retransmit, reproduce, sell, disseminate, separate, licence, distribute, store electronically, publish, broadcast or otherwise circulate either within your business or for public or commercial purposes any of (or any part of) these materials and / or any services provided by Francis Clark LLP in any format whatsoever unless you have obtained prior written consent from Francis Clark LLP to do so and entered into a licence. To the maximum extent permitted by applicable law Francis Clark LLP excludes all representations, warranties and conditions (including, without limitation, the conditions implied by law) in respect of these materials and /or any services provided by Francis Clark LLP. These materials and /or any services provided by Francis Clark LLP are designed solely for the benefit of delegates of Francis Clark LLP. The content of these materials and / or any services provided by Francis Clark LLP does not constitute advice and whilst Francis Clark LLP endeavours to ensure that the materials and / or any services provided by Francis Clark LLP are correct, we do not warrant the completeness or accuracy of the materials and /or any services provided by Francis Clark LLP; nor do we commit to ensuring that these materials and / or any services provided by Francis Clark LLP are up-to-date or error or omission-free. Where indicated, these materials are subject to Crown copyright protection. Re-use of any such Crown copyright-protected material is subject to current law and related regulations on the re-use of Crown copyright extracts in England and Wales. These materials and / or any services provided by Francis Clark LLP are subject to our terms and conditions of business as amended from time to time, a copy of which is available on request. Our liability is limited and to the maximum extent permitted under applicable law Francis Clark LLP will not be liable for any direct, indirect or consequential loss or damage arising in connection with these materials and / or any services provided by Francis Clark LLP, whether arising in tort, contract, or otherwise, including, without limitation, any loss of profit, contracts, business, goodwill, data, income or revenue. Please note however, that our liability for fraud, for death or personal injury caused by our negligence, or for any other liability is not excluded or limited. Disclaimer & copyright
Hinweis der Redaktion
- Matt - Intro Welcome to the 2015 payroll update course. This year seems to be the best attended yet. I am Matthew Harris, the Sage Adviser for Francis Clark. My associates are Eve Iunco, payroll manager from Torquay office, and Lewis Bell who is a Trainee Sage Adviser. (Usual housekeeping bits re fire drills, mobile phones etc.) We are happy to take questions as we are going through the morning, or you can ask them at the coffee break or at the end when lunch is served. If we cannot answer your question at the time we will come back to you after the course. As we have done in the past Eve and I will alternate through subjects. Usual disclosure, we have a budget coming on 19th March and then a general election in May so things may change.
- Matt – intro We have a lot to go through today, and fit in the four hours we have. (Run through slide)
- As per slide P codes should no longer be used. HMRC will issue coding notices, but if you have an employee on a P code and have not received a new code for them, get them to contact HMRC to sort it out.
- Eve As per slide. Again the Basic threshold has dropped but with the addition of the extra £600 allowance employees standard coded employees will hit the 40% bracket later No change to tax rates.
- Another new thing coming in from April 2015 is Transferrable Personal Allowance. Now called Marriage Allowance. Please do not get this confused with Married Couples Allowance. Even though you as payroll processors will not be involved in the routine, as employees will have to decide whether to do this or not, it is always good to know what is going on and how you will see these changes in the payroll process. The premise is that an employee not using up all of their personal allowance can transfer some of this to their partner. Neither person must be paying tax at anything but Basic Rate. The transfer can only be between married or civil partner couples. The proportion that can be transferred is 10% of the personal allowance i.e 10% x £10,600 = £1,060 which would give a tax saving for the other partner of £212 in the year. You will see two new tax suffixes created, after getting rid of P, we end up having N for the transferor and M for the recipient
- The person transferring the allowance should register online, at this stage just to register an interest in doing it. This is now in place, the transferor will enter their name and email address which will be acknowledged by an email from HMRC explaining when they will receive an invitation to apply. We understand that this invitation will not be sent for 14 weeks. There is a decision tree and the registration requires identity and marriage/civil partnership details The transfer remains in place until it is physically cancelled, so if a couple divorce then the person who transferred the allowance needs to cancel the transfer. Registering an interest can take place with effect from now A sample test of these will start in April, the sample will be expanded in June/July and then fully operational in October
- As per slide. Note that the Secondary Threshold and Primary Threshold have again separated, this time though (for the first time) the employee starts paying NIC before the employer. New Upper Secondary Threshold = to UEL at the moment but used with relation to employees under 21. Talk about that later. No changes to the NI rates 12% employee 2% above UEL employee and 13.8% employer
- New with effect from April 2015 are the NI regulations relating to under 21 year olds. Employer will not pay any NI on earnings above the Secondary Threshold up to the UPPER Secondary Threshold Anything earned above this the employer will pay NI at 13.8% You are still required to record the earnings levels though no Employers NI will be shown As soon as the employee reaches 21 the first pay day after that birthday they will revert to the normal NI calculations based on the standard NI table letter.
- With effect from the 2016/17 tax year employers with apprentices, on a recognised apprenticeship scheme, may be given the same NI break. The age may well be for apprentices under 25 Though with a general election 2 months away this may all change
- Employment allowance goes in to it’s second year. Change this year is that employers who have care and support workers can claim the allowance this year. This is not for agencies who employ this type of worker, it is for those who require them and employ them privately. Still not available to the listed employers, remembering those who work for local authorities as well as private customers can only claim it if their work for the local authority is not the majority of their income. Still only £2,000 can be claimed. As per slide
- As per slide Rates change each October so rates quoted came in to force 1 October 2014. New rates in October 2015 but not yet published.
- As per slide Note new SMP/SPP/SAP rates come in from 5 April 2015 Student Loan threshold increasing to £17,335. As mentioned last year the Government stated they would raise the threshold to £21,000 by the end of their term. This has been done in part by starting a 2nd plan for Student Loans. Two plans Plan 1 continues as is with deductions made from salary with increases to threshold. Plan 2 relates to loans taken out by students where course started 1 September 2012 or later. Threshold will be £21,000 but payments not through payroll until April 2016. This only applies to students whose home address and university or higher education course are in England or Wales. Students in Northern Ireland and Scotland will stay on Plan 1.
- Changes to Adoption Pay and Leave Now available to Foster for Adoption in England and for Surrogacy arrangements once the child is adopted As with OML leave becomes a day 1 right but SAP remains a conditional entitlement, meaning the employee must have worked for 26 weeks up to the matching week (15 weeks before the matching date) These only start for placements on or after 5 April 2015. Old rules apply to placements before 5 April 2015.
- Changes to Statutory Paternity Leave and Pay OPL will now just be called PL APL being abolished per slide. APL only been in place for 5 years. Only 1 instance of APL come across in that time. Being replace with Shared Parental Leave and Pay.
- Per slide Basics as per slide
- Parents have to show they are eligible for this. 2 tests. Stage 1 test is must have been in employment for a certain number of weeks, and average earnings above a level
- Stage 2 test is qualification for leave and pay There are two notifications to complete, one being the notice of entitlement, the other the notice of absence. These forms are not available as yet……
- There must be a curtailing of the maternity leave and pay for Shared Parental leave and pay to start Employee has to give 8 weeks notice of this. Must take the compulsory leave (2 weeks after birth/placement or 4 weeks if factory worker) Two types of leave. Continuous leave where all the leave is taken in one block Discontinuous leave where the leave taken is punctuated by returns to work Complete an shPL1 form showing leave to be taken. If discontinuous a two week discussion period takes place and employer can ask for the leave schedule to be changed if not compatible. There is a cap of three notifications. But if employee withdraws notification then this does not count against the cap.
- With maternity employee entitled to 10 KIT days, with ShP both parents entitled to 20 SPLIT days each. Backdated pay rises only count if pay rise affected qualifying period Leave has to be taken in complete weeks not part weeks, though those weeks do not have to run Sunday to Saturday, could be Wednesday to Tuesday. Watch out how employers deal with this re contractual payments, like contractual maternity pay etc Leave and Pay must finish by child's first birthday Can recover as with other statutory payments
- Woohoo!!!!!!!
- Just going in to a general notification about Auto-Enrolment OK all I am going to do this year is a general look and some updates. How many of you have staged? How many of you know their staging date? The Pensions Regulator is sending out letters to all employers telling them when their staging date is and what they need to do. If you haven’t received your letter and want to check you can go on to the Pensions Regulator website and put in your PAYE reference and it will tell you when you are staging and what you need to do to get ready. Qualifying earnings are used to assess employees but can also be used for pension contributions calculations. Rates being phased in at the moment minimum is 1% employer minimum total 2% from October 2017 minimum 2% employer total 5% and October 2018 minimum 3% employer total 8% Talk through Opt out and opt in and postponement and letters
- Matt Assessing which group your employees fall into is based on age and qualifying earnings. Run through table. Examples: 22 year old earning £12,000 per year 68 year old earning £5,500 per year 45 year old earning £9,800 per year 76 year old earning £22,000 per year
- There is a consultation in place seeking the view on a proposed relaxation of the amount of information that needs to be provided Reduce the employer’s obligation to make an assessment of all categories of workers Facilitate one individualised communication that will cover all possible circumstances Reduce the information requirements to a minimum DWP plans to use a provision that was introduced in the Pensions Act 2014 so that Where a worker is in notice period or notice is given after staging the employer will not have to consider these workers for AE Opt outs from contractual enrolment – where a worker is contractually enrolled and opt out the employer has a duty to consider them for AE. So if a worker opts out of contractual enrolment employer does not have to consider them re AE until next re-enrolment date Workers with Tax Protection, currently if employee has tax protection re pensions and they do not opt out of AE then they will lose that tax protection and pay tax on their pension pot, which could be lots of money. New powers will mean that these workers do not have to be considered for AE at AE date or re-enrolment date. Employer must have “reasonable grounds” to believe the employee has fixed protection and suggest a copy of the HMRC FP cert is obtained. Planned process whereby, in some circumstances, accrued pension pots from previous employments must be transferred to the current pension pot. Relates to small pension pots being one that contains a value up to £10,000 (in cash and/or benefits) If you are due to set up a pension scheme with a pension provider, check with your payroll software what periods it works from (Sage works on tax weeks/months). The pension scheme upload will need to be set up with the same periods, if not the upload of files is a pain, though can be overridden but best to get it right from the start. Also make sure you have the scheme/provider references and all information with regard to what is pensionable and rates being used, together with names of groups etc set up as need to be exactly the same in Sage and probably other payroll software. Any help on the pension side our FP guys can do this for you, any help on setting up in Sage then I am your man. On this basis though for those already staged, then check what you need to do with regard to the new tax year and periods that have been set up. Some pension providers allow you to set them up in advance, others, such as NEST, use periods based on what you have set up with them and as, especially on weekly, fortnightly and four-weekly payrolls, the tax periods are weird at the end of the year and the 6th of April moves from Sunday to Monday new groups and periods may need to be set up.
- A quick run through the thinks to check when setting up in Sage Payroll, and for those using other software to check back on. Pricing and let them know about 20% discount in first year if they order it through FC.
- Now on to the big story, which we did mention last year when we did these courses. Holiday Pay Calculations. Well most know that my “favourite” person when it comes to payroll is a lady called Mrs Alabaster. If anyone wants to know what she did to make payroll more complicated then ask at the end. Well now she is joined by Mr Locke. As mentioned last year Mr Locke took British Gas to tribunal. His grievance was that while working he earned commission which was a large part of his salary, but when he took two weeks holiday he was only paid for those weeks based on is salary only and that he didn’t earn commission during that period so he was worse off if he took a holiday. This case went to the ECJ who stated that this contravened the working time directive and was basically stopping employees in this situation from taking the 4 weeks paid holiday they were due, and should take. So they have passed this back to the tribunal to make a ruling on this, which we are still awaiting. While this was going on, and again we did mention last year to keep an eye out for this, in November there were 3 employment tribunal rulings relating to overtime and holiday pay. The rulings basically stated that Guaranteed overtime, non-guaranteed overtime and any taxable payment that is made for time travelling to work should be included in the calculation of holiday pay. No ruling has been made re voluntary overtime… What is the difference between these, well it is a grey area but let’s try and make sense of it with an example. Pick on one person and state they have a contract of employment which states they work 35 hours a week and also 5 hours overtime. Pick on one person and ask them if they would like to work overtime on Saturday, if they say no then move on to another. Pick on another person and say to them that they have asked to come in at the weekend for 5 hours to catch up on some work is it alright.
- As per slide, what advice can we give? No definitive answer, though we are awaiting rulings to hopefully sort this out. The advice we have been given, by the people who run our internal payroll update course, is this. Not to pay this additional rate of holiday pay at the moment but to make an accrual in the accounts for it. Reason for this is that if you pay the holiday pay then the ruling is overturned or adjusted then you are very unlikely to be able to get that extra pay back from employees. How to calculate for the accrual, or even if you want to pay the extra, then it is suggested you take an average of the 12 week pay before the holiday is taken. As mentioned in November an employee can make a backdated claim but only up to 3 months from the last incorrectly paid holiday pay. To do this they have to take this to tribunal
- Did you know that at the moment HMRC can collect tax debt via payroll up to a value of £3,000. Well this limit is being increased to a maximum of £17,000 but the limits will be based on earnings brackets, so to be in the maximum section you have to be earning over £90,000. This is done via an adjustment to the employees tax code, although this is not new with a starting tax code of £10,600 this could mean negative tax codes (K codes) or tax codes being decreased dramatically. So this could cause a problem for employees if HMRC change a tax code, as it could mean that their take home pay in that pay period is in. With a K code there is regulatory limit of only 50% of the employees pay can be taken in tax, but other codes you would normally call the HMRC and ask for the code to be put on a week 1/month 1 basis to stop that happening. Well from April 2015 the 50% regulatory limit is for all codes so, no need to call HMRC. This will also make P45 checks a bit different as these will now take on the same regulations as the K code discrepancy and you use the lower tax figure, which will be the P45 tax figure the majority of the time, rather than the correct tax figure.
- So how is everything going with you and Real Time Information? Any issues, maybe with HMRC, or is it all going swimmingly (try not to look to smug) So what have we got to look out for in the new year….. Year end deadline is definitely 19 April 2015 so your final FPS and final EPS, if required, and year end submission must be in with HMRC by this date. There is now no need for answering the questions that have been on the P35, but if the system has them on it then they must be submitted. I have been told by Sage that the legislation update, out at the end of February and only on download (also note it won’t work on Windows XP machines), may well not have the questions on it, but until we have it installed we cannot tell. Penalties, the next big thing. These now apply for late payment and late submission Late filing penalties will not apply to EPS or EYU submissions. There will be one unpenalised default in each tax year. Only one late filing penalty will be issued for each tax month, so if 4 weeks and all FPS’s are late only one penalty will be issued. Penalties are based on number of employees as follows: 1-9 employees £100 10-49 employees £200 50-249 employees £300 250 employees and over £400 Appeal these penalties within 30 days of the notice date either online or in writing Hot off the press, HMRC have made a climb down with regard to penalties. See notes. HMRC are requesting address details for all employees not just new starters. They won’t change addresses on their system if you have changed it on yours the employee still has to contact them. If you have a contracted out pension scheme, you will need to make sure the correct SCON (Scheme Contracted Out Number) is used not the dummy one HMRC have allowed in the past, or your FPC will be rejected. From October 2014, the EPS should have the tax month it relates to as part of the submission. Again this should hopefully be included in the legislation update in Sage.