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.
May 2015
21
Automatic Enrolment: Employer Duties and Director Exemptions
Who is subject to the legislation?
Automatic enrolment legislation affects all individuals who are classified as workers. The legislation will affect all workers between the ages of 16 and 74 who work or ordinary work in the UK. A worker can be either under a contract of employment (an employee) or be a personal services worker who has a contract to perform work or services personally and are not providing the work or services as part of their own business.
Who is a personal service worker?
A personal services worker cannot send a substitute or sub-contract the work unless they have a legitimate reason to do so (e.g. Illness). A personal service worker will have a “contract of service” to perform services personally as opposed to a sub-contractor having a “contract for service”. Various indictors will determine whether a contract is a “contract of service” or a “contract for service” and an employer must take all relevant considerations into account and make a reasonable judgement.
Should a director be considered a worker?
A director will be classified as a worker if he or she both works under a contract of employment and there is at least one other person working for the company under a contract of employment.
Employer Duties with respect to Directors.
A sole director could not be considered a worker even if he has a contract of employment.
If an additional director was to join the company under a “contract of service” contract then the company does not need to consider whether or not they are doing this work on behalf of their own business. A director who is not an employee is always exempt. The initial director is still not classed as a worker because there is no one else working for the company under a contract of employment.
If an additional personal service worker is hired under a contract of service who is not a director, then an employer duty will arise in respect of this worker.
If a worker now joins the company under a contract of employment (as an employee), then an employer duty will arise in respect of this employee and also in respect of the director who has a contract of employment. This is because there is now another person working for the company under a contract of employment.
If your company has received a letter from the pensions regular informing you of your staging date and you believe automatic enrolment duties do not apply to you because a director exemption applies then can contact them by emailing customersupport@autoenrol.tpr.gov.uk . Visit this page to find a pre-populated email www.tpr.gov.uk/employers/what-if-i-dont-have-any-staff.aspx. This pre-populated email will prompt you to inform them of what type of director exemption applies, what the letter code for the company is, the PAYE reference and the companies house number.
May 2015
15
BrightPay causes a stir at Accountex
BrightPay attended Accountex this week. Accountex is the UK's national accountancy exhibition and conference.
There was huge interest in our payroll software, mainly due to 2 key selling points:
- Its competitive price point (£199 plus VAT per annum which includes support) and
- Its ability to deal with all aspects of automatic enrolment seamlessly and elegantly.
The one question I kept getting asked was "how can you do it at that price?".
We have been in the payroll software business for 22 years and this has been our business model. We offer affordable payroll software that is intuitive and self explanatory, thereby cutting down on the support requirement. Where support is needed, this is available over the phone, by email or through the many instructional videos and online support channels that we employ. We currently have 12 dedicated support staff catering for 65,000 employers. We constantly review our staffing requirements and take on and train more staff, as and when required.
Try it out for yourself and you will understand. Payroll software does not have to cost an arm and a leg :)
May 2015
2
HMRC address change for employers
HMRC have changed their address for PAYE Penalties and Statutory Sick Pay (Form SP32 to manually calculate your employee’s Statutory Sick Payments).
If you are late reporting payroll information to HMRC and receive a penalty from 27th April 2015 all written appeals need to be sent to the address below. Similarly SP32 forms should be sent to the same address.
National Insurance Contributions & Employers Office,
HM Revenue and Customs,
BX9 1BX
