All Posts By

Bob L

P46 forms – RIP

The P46 forms were used when an employee arrived without a P45, this was amended to a ‘shorter’ P46 and now is no longer used at all.  It is not possible to submit a P46 to HMRC and all they need is the starter declaration information that we have included on the ‘New Starter Forms‘.  It is also possible to use an HMRC new starter declaration but the information is the same and our form keeps everything we need in one place.

The new starter form includes basic information, such as National Insurance Number, but it is the answers to the questions that have the influence on the tax code an employee will start with.  Please try and answer A, B or C as a ‘not known’ results in a 0T wk1/mth1 tax code and the employee may have an initially higher amount of tax deducted than necessary.  The following are the bands given depending on the answers (valid 2.6.14) –

A – 1000L cumulative
B – 1000L wk1/mth1
C – BR cumulative

Auto-Enrolment Newsletter – Update

Workplace pension law has changed. Every employer in the UK will eventually be required to help their workers to save for their retirement. Employers will need to automatically enrol certain workers into a pension scheme and contribute towards it.

In very simplistic terms all of your existing employees and any new employees will be required to be a member of a compliant pension scheme, with the employer making a minimum contribution. There are exceptions based upon age and how much your employee is paid. An employee can opt-out from the pension scheme. Please be aware however that this is a very simplistic view of Auto-Enrolment and in practice it is far more complex.


When will this affect me? – Staging Dates

The Pensions Regulator has assigned all organisations a staging date for when they need to start Auto-Enrolment. The staging date is dependent on what the size of your organisation was in April 2012. To establish the staging date for your organisation please visit (you will require your PAYE reference number from the front page of your reports)

http://www.thepensionsregulator.gov.uk/employers/tools/staging-date.aspx

Once you know your organisation’s staging date it is then time to start preparing for Auto-Enrolment

 

How should I prepare for Auto-Enrolment?

The process of Auto-Enrolment is complex and as such there is a great deal of information available via The Pensions Regulator website (http://www.thepensionsregulator.gov.uk). If you already have a pension provider consider discussing Auto-Enrolment with them.

 

Can I get help?

We are working alongside a firm of independent financial advisers, NLP Financial Management who will ensure that you meet your Auto Enrolment obligations whilst removing the complexities involved. NLPFM can assist with all aspects of the process including explaining your obligation and the financial impact it will have on your business, sourcing and setting up the pension scheme and providing you with the necessary communication that you will need to issue to your employees. By working alongside Payroll Options, NLPFM will ensure that the process is as simple and easy for you as possible. In recognition of NLPFM’s range of services and client care, they have recently been named the Citywire ‘New Model Adviser Firm of the Year’ for Greater London.

To discuss Auto-Enrolment with NLPFM contact Chad Atwal, Tel: 0207 472 5541 Email: autoenrolment@nlpfm.co.uk

 

How can Payroll Options help?

Payroll Options have developed a number of tools to assist you with Auto-Enrolment.

 

  • Once your staging date has arrived we are able to perform the complex task of Auto-Enrolment Assessment of your employees with every payroll thereafter to see who should be added to the pension scheme.
  • Employees will be added to the Auto-Enrolment Pension scheme at the appropriate time once any postponement periods have passed and have contributions calculated.
  • We are able to provide to you with data containing details of employees and their pension contributions that your pension company will require you to provide to them.

 

Our charges will increase by 5% from your Staging Date to cover the ongoing increase in time required to prepare your payroll and the additional systems required for Auto-Enrolment.

Please remember Auto-Enrolment is not something that can be ignored –start your preparations now.

Auto-Enrolment Newsletter

Workplace pension law has changed.  Every employer in the UK will eventually be required to help their workers to save for their retirement.  Employers will need to automatically enrol certain workers into a pension scheme and contribute towards it.


In very simplistic terms all of your existing employees and any new employee will be required to be a member of a compliant pension scheme, the employer must also contribute.  There are exceptions based upon age and how much your employee is paid.  An employee can opt-out from the pension scheme.  Please be aware however that this is a very simplistic view of Auto-Enrolment and in practice it is more complex.


When will this affect me? – Staging Dates

All organisations have a staging date for when they need to be ready for Auto-Enrolment.  The staging date is dependent on what the size of your organisation was in April 2012.  The Pensions Regulator should send you a letter approximately 1 year ahead of your staging date.

To establish the staging date for your organisation please visit (please see the front of your payroll reports for your organisation’s PAYE reference):

http://www.thepensionsregulator.gov.uk/employers/tools/staging-date.aspx

Once you know your organisation’s staging date it is then time to start preparing for Auto-Enrolment.

 

How should I prepare for Auto-Enrolment

The process of Auto-Enrolment is complex and as such there is a great deal of information available via The Pensions Regulator website (http://www.thepensionsregulator.gov.uk). If you already have a pension provider consider discussing Auto-Enrolment with them, or you may consider it appropriate to appoint an external pensions administrator to assist your organisation with administrative requirements of Auto-Enrolment.

From our experience, so far, it is best to prepare for Auto-Enrolment as soon as possible.  We have been led to believe that organisations are finding it difficult to identify a pension company that is willing to assist with Auto-Enrolment if the staging date is imminent.

Payroll Options can assist by providing information to allow you, or your pension administrator, to evaluate your existing employees for Auto-Enrolment.  Once your scheme is operating we will enrol your employees and opt-out as instructed with your normal payroll instructions.   A pension report will detail the amount of contributions made and will be supplied with your normal payroll reports.

 

Will this cost my organisation money?

Inevitably Auto-Enrolment will add additional costs to your organisation, initially for the administration of the pension scheme but primarily in the contributions that the employer must make towards an employee’s pension.

 

What should I do now?

  • Establish your organisation’s staging date
  • Decide whether to appoint an external pension administrator
  • Assess existing employees for Auto-Enrolment.

Please remember Auto-Enrolment is not something that can be ignored – start your preparations now.

New National Minimum Wage Rates from 01/10/13

The national minimum wages has increased as of 01/010/2013

 

New rates from 01 October 2013:


  • £6.31 per hour for workers aged 21 and over – a rise of 12p
  • £5.03 per hour for 18-20 year olds – a rise of 5p
  • £3.72 per hour for workers above school leaving age but under 18 – a rise of 4p
  • £2.68 per hour for apprentices – a rise of 3p

 

 

For more information on the Nation Minimum wage please visit the government website

PAYE Rates and Thresholds for 2013/2014

Here is a quick look at the new rates and thresholds for tax year 2013/2014. For more details please visit our Tax and NI page or download the employer helpbook from http://www.hmrc.gov.uk/helpsheets/e12.pdf

 

PAYE

 

Tax codes suffix with “L” go up by 134 points making the new standard tax code 944L which gives you a tax free allowance of:

 

£9445 per annum

£787 per month

£182 per week

 

Annual Tax thresholds have changed to:

 

20% on earnings up to £32,010

40% on earnings from £32,010 to £150,000

45% on earnings above £150,000

 

National Insurance


Employees:  12% of earnings above £646 per month and 2% on earnings above £3454 per month

 

Employers: 13.8% of earnings above £641 per month

 

Statutory payments



SSP is £86.70 per week

 

SMP is the lesser of 90% of their average weekly earnings or £136.78 per week after the first 6 weeks

 

SPP is the lesser of 90% of average weekly earnings and £136.78 per week

 

Student Loans

 

Deductions are 9% of earnings above:

£16,365 per annum

£1,363.75 per month

£314.71 per week

Fundraising Update and Raffle Prize Winners

 

As the anniversary of the loss of Tanya’s passes, our month of fundraising comes to an end and we would like to say a massive thank everyone who has organised an event, gone to an event or brought a raffle ticket, with your help we have raised  £2,178.01 for Asthma UK.

 

The winning raffle tickets are:

 

 

Congratulations to all the winners, please send us a picture of you enjoying your prize to traci@payrolloptions.com and we will add them to our Facebook page

RTI – Client Newsletter

HMRC Real Time Information (RTI)

From April 2013 all employee payrolls processed by Payroll Options will be operated in accordance with RTI and appropriate submissions will be made by Payroll Options to HMRC on your behalf.

What should I do differently?

  • Please revise your New Starter documents to indicate to Payroll Options which Starter Declarations are appropriate.
  • For each New Starter please ensure that you obtain a complete record for them such as Full Name, Address, Date of Birth and NI Number.
  • P45s can now only be accepted with an employee’s first payment.

How does it work?

  • Whenever your employees are paid we will submit details of the payments to HMRC.  This is called the Full Payment Summary (FPS) and will be submitted to HMRC just before the payment date shown on the front page of your payroll reports and the payslips.
  • By the 19th of the month following the end of the tax period we will submit details to HMRC of values of SMP,SPP etc. that you will be deducting from your payment to HMRC.  These values are contained in a submission called the Employer Payment Summary (EPS).
  • At the end of the tax year we will be submitting the statements that have traditionally been part of the P35, the values from the P35 will already be known by HMRC due to the submissions of FPS and EPS throughout the year.

Starter Declarations

  • For every new starter to your payroll you are required to ask a series of questions of the new employee to ensure that the PAYE tax and Student Loan is operated correctly for them.   The Starter Declarations are as follows:

 

  • A.This is their first job since last 6 April and they have not been receiving taxable Jobseeker’s Allowance, Employment and Support Allowance, taxable Incapacity Benefit, state pension or occupational pension.
  • B.This is their only job, but since last 6 April they have had another job, or have received taxable Jobseeker’s Allowance, Employment and Support Allowance or taxable Incapacity Benefit. They do not receive state or occupational pension.
  • C.They have another job or receive a state or occupational pension.

Student Loans

  • You must also ask if they left a course of UK Higher Education before last 6 April and they have a student loan outstanding that should be deducted via the payroll.  If ‘yes’ you must start making student loan deductions from their pay.

 

  • The existing P46 form for use when a new employee does not have a P45 is being scrapped from April 2013 and will no longer be accepted by Payroll Options.
  • The existing P38 Student Declaration is also being scrapped from April 2013, students should also complete a Starter Declaration.  This may result in a Student paying slightly more tax than normal if they work during the early part of the tax year, if they wish to recover this tax once they have finished working for you they can discuss this with HMRC.
  • If you have a P45 for your new starter please submit this to Payroll Options, along with a Starter Declaration as detailed above.  P45s can only be submitted as part of their first payroll, if it is received later it cannot be used, if the employee considers that their tax code is wrong they must contact HMRC.
  • From your new starter’s Starter Declaration, and if present their P45, a Tax Code will be allocated.
  • There is no formal HMRC form as such called a Starter Declaration Form, you are required to incorporate the above Starter Declarations into your existing employee forms.
  • You may consider it appropriate to have your new employee sign a Starter Declaration that you have prepared and retain it with their HR records.
  • We have added additional fields to the standard New Starter Form which can be downloaded from https://www.payrolloptions.com/downloads , a copy of this is also attached.  Please change the company name and payroll number at the top of the sheet and save this as your template.
  • As per our current procedures we are unable to delay the processing of your payroll due to tax documents not being received.  Your payroll will be prepared using the tax documents received at the time of starting to process your payroll.   If a Starter Declaration is not received with your payroll instructions your starter may temporarily, but not necessarily, have additional tax deducted.
  • As now once a P6 Tax Code notice from HMRC has been received for an employee we are not permitted to change an employee’s tax code even if a P45 has been presented.  In this instance the employee can discuss the situation with HMRC if they consider that their PAYE Tax is incorrect which may result in a further P6 to be issued by HMRC.

Re-runs

  • As files are to be submitted to HMRC for every payroll and for each employee, re-runs of your payroll should be avoided unless absolutely necessary, re-runs of your payroll once the pay date has passed should simply be avoided and make the necessary adjustments in the next payroll.
  • As is the case now we are unable to re-run your payroll for a change of tax code or to make changes to non-taxable expenses.

Supplier Payrolls

  • If we currently pay your suppliers via your payroll or pay people that are self-employed, and thereby not employees, we cannot continue to do so on the PAYE payroll, if you wish for us to continue paying these non-employees on your behalf we will need to establish another payroll.  The non-employees payroll will not be subject to RTI.

Payment Dates

  • If your payroll is paid monthly it must be processed before the 5th of the month following the payroll month concerned.
  • The payment date that appears on your employees’ payslips must match the actual payment date to the employees and should therefore be on or after the date the payroll is processed.
  • If you have traditionally waited until after the end of the month, prior to preparing your payroll instructions for Payroll Options which has led to your payroll not being processed until after the 5th of the following month, such processes are no longer possible with RTI.   Your cut-off date will need to be bought forward to before the end of the month to enable you to supply the information to Payroll Options allowing time for your payroll to be processed prior to the 5th of the month.   If this is the case for your payroll please contact us so we can resolve this with you.

Payroll to be processed at least every month

  • We are required to process your payroll for every tax month to ensure that we can submit appropriate information to HMRC even if nobody is being paid.
  • If your payroll has traditionally only been processed for a couple of months of each year, from April we are required to process your payroll every month even if nobody is being paid, this is to inform HMRC that nobody is being paid.  Traditionally we would only have charged for processing your payroll when employees were actually paid but from April 2013 as your payroll will be processed, just that no employees will be paid, we will be charging the equivalent to our lowest monthly payroll charge (currently £22.50).
  • Any payroll not processed by the 5th of the month following will be processed in such a way to inform HMRC that nobody has been paid, please see section Payment Dates, for this we will be charging the equivalent to our lowest monthly payroll charge (currently £22.50).

Payment to HMRC Collector of Taxes

  • By the submission of the FPS and EPS HMRC will know how much your company owes for PAYE Tax and National Insurance every month.
  • It is very important that you pay the amount of PAYE Tax and National Insurance to HMRC accurately, on-time and use the reference as detailed on your Collector of Taxes Report.
  • It is important if we operate a weekly, 2-weekly or 4-weekly payroll on your behalf that you pay the correct amount for whole tax month for all payment dates up to and including the 5th of the month.

Tax Year End April 2014 onwards

  • At the end of the tax year we will require you to indicate the correct P35 statements, as now.
  • There will be NO financial reconciliation at the end of the tax year as this must be performed throughout the tax year so that the amounts paid to HMRC agree with details submitted via FPS and EPS.
  • P60s will continue to be provided after the end of the tax year.

CIS deductions suffered

  • Please advise Payroll Options of the monthly amount of CIS deductions suffered (Column E on form CIS132) by the 13th of the month following so that we can include the amount within your EPS.

Regional employer NICs holiday for new businesses

  • If you are in receipt of the NICs holiday for new businesses please advise Payroll Options of the monthly amount by the 13th of the month following so that we can include the amount within your EPS.
  • For further details of this scheme please visit: http://www.hmrc.gov.uk/paye/intro/nics-holiday/index.htm
  • As stated previously we will be increasing our charges by 5% to cover the additional processes now required by HMRC on your behalf.

Charges

  • As stated previously we will be increasing our charges by 5% to cover the additional processes now required by HMRC on your behalf.

 

Please contact us by email to helpdesk@payrolloptions.com or by telephone 01908 630 777 if you would like to discuss RTI further.

 

 

Fundraising for Asthma UK

Tanya’s Tribute


Here at Payroll Options we will be putting on a series of fundraising events in aid of Asthma UK in memory of our beloved and much missed colleague Tanya, who tragically died last year aged just 27 after suffering an asthma attack.

 

Over the course of a month we have the following events lined up:

 

  • 26th February – Payroll Options Fete – with all our  favourite stalls and games
  • 7th March – A wine tasting evening
  • 10th March – MK Half Marathon – Gary (IT Guy) will be running in the MK half Marathon
  • 16th March -Murder Mystery Evening
  • 22nd March – Bistro Live – we will be taking over and dancing the night away
  • 26th March – Dress up at work day – we will be dressing as fairies and pixies for the day and drawing the raffle at 3pm

 

We will also be selling raffle tickets at all the events, and would like to say a massive thank you to the following donors for our raffle prizes:

 

New National Minimum Wage rates 01/10/2012

The National Minimum Wage (NMW) is a minimum amount per hour that most workers in the UK are entitled to be paid. The rate depends on age and whether the worker is an apprentice.

New rates from 01 October 2012:

  • £6.19 per hour for workers aged 21 and over – a rise of 11p
  • £4.98 per hour for 18-20 year olds – no change
  • £3.68 per hour for workers above school leaving age but under 18 – no change
  • £2.65 per hour for apprentices – a rise of 5p

 

If your employer provides you with accommodation, they can count some of its value towards your NMW pay. This is called the accommodation offset. From October, the maximum that employers can count towards NMW pay will be £4.82 – a rise of 9p.