BrightPay Blog


Mar 2017

21

Off-payroll working in the public sector

Current HMRC guidance can be found here.

The guidance concerns both the provider of the services (the personal services company) and the payer for the services (the public sector client)

Assume an invoice of £6,000 for services (excluding VAT) issued by Joe Bloggs of ABC Ltd and that the payment falls within the new rules.

If you are the personal services company

Using the example deductions in HMRC's article, as the public sector client has already deducted tax (£1,458) and NIC (£413), you receive £4,129 (excluding VAT).

If you are paying yourself this £4,129 from your company, you will have no further PAYE or NIC liability on it, so, in your payroll system, you should mark the gross payment (£4,129) as not being liable to tax or NIC.

In BrightPay, simply set up a new addition type as per the following screen. Ensure that tax, NIC etc. are all unticked.

When the payroll is finalised, the non taxable pay will appear on the FPS.

 

If you are the public sector client

Pay Joe Bloggs through your payroll as if he were a normal employee.

When entering Joe Bloggs to your payroll, use starter declaration C - secondary employment. This will put him on basic rate tax. You should also tick that the employee is on an irregular payment pattern.

The payment frequency that you select for Joe Bloggs should match their contract as closely as possible e.g. if he is being paid for a month's work and you put him through the weekly payroll run, this will adversely impact on your NIC figures.

It may be useful to set up a department named “Personal Services Company” and assign Joe Bloggs to that department. This will enable specific reports for this category of employee.

When the contract ends, P45 Joe Bloggs as you would a normal employee.

 

Auto enrolment

The public sector client should treat Joe Bloggs as if he were a normal employee for AE purposes, if he falls within the definition of a personal services worker as per TPR's guidance (HMRC's guidance on this is contradictory - they state that Joe Bloggs should not be considered for auto enrolment in all cases). If the contract is a one off, then postponement would be appropriate. If Joe Bloggs is genuinely self employed and does not come within the scope of a personal services worker, then simply mark as exempt when BrightPay flags him for enrolment.

In the payroll of ABC Ltd, if Joe Bloggs is not deemed as a worker in the public sector company, he should be enrolled by ABC. However, in the majority of cases ABC Ltd will be a single director company, so is not deemed an employer for AE purposes.


Other:

This article does not cover the treatment of VAT.

Please note that the definition of public sector client, for the purposes of these rules, is quite broad and includes those bodies listed in the Freedom of Information Act 2000. Click here for list. e.g. a GP surgery may fall under the new rules although it is difficult to imagine Joe Bloggs in the above example not being genuinely self employed in this case (unless, for example, Joe Bloggs was a self employed locum who only provides his services to the one GP surgery).

It is also worth noting that the cost for the public sector client will have increased as a result of the employer NIC liability. This may lead to the re-negotiation of contracts in the majority of cases.

Posted byPaul ByrneinPayroll Software


Mar 2017

20

BrightPay 2017/18 is Now Available. What's New?

BrightPay 2017/18 is now available (for new customers and existing customers). Here’s a quick overview of what’s new:


2017/18 Tax Year Updates

  • 2017/18 rates, thresholds and calculations for PAYE tax, National Insurance contributions, Student Loan deductions, Statutory Sick Pay, Statutory Maternity Pay, Statutory Adoption Pay, Statutory Paternity Pay, Statutory Shared Parental Pay, Automatic Enrolment earnings thresholds and triggers, company cars, vans and fuel.
  • The emergency tax code has changed from 1100L to 1150L. When importing from BrightPay 2016/17, L codes are uplifted by 50, while M codes are uplifted by 55 and N codes by 345.
  • Full support for Scottish Rate of Income Tax (SRIT) codes, including the new 2017/18 Scottish higher tax rate threshold.
  • Support for an expanded range of National Insurance Number formats.
  • April 2017 National Minimum/Living Wage.
  • Ability to process 2017/18 coding notices.
  • Eligible employers can continue to claim the £3,000 Employment Allowance which can be used to reduce Employer Class 1 Secondary NICs payments to HMRC.
  • Full support for the new 2017/18 Apprenticeship Levy, including levy calculation, allowance and reporting amounts on an EPS submission.
  • Updated P11, P45, P60, P30 and P32 forms.
  • Updated RTI submissions in line with the latest HMRC specifications. BrightPay continues to be officially HMRC Recognised for all RTI, EXB and CIS submission types.

 

Payroll Journal

BrightPay 2017/18 enables you to produce a CSV payroll journal for import into your accounting software. This feature is accessed via the new Journal button on the payroll toolbar, and provides the following:

  • The file formats and default nominal ledger code mappings are included for Exact, Kashflow, Quickbooks, Sage and Xero. These built-in mappings can be tailored to meet your own requirements, or you can create your own nominal ledger mapping from scratch if need be.
  • Specify the journal date range – payslips finalised with a pay date in the range you select are included.
  • Include individual journal records for each employee, or merge the employee records into rolled up records for each unique payment date.
  • If required, you can use alternate nominal codes for payroll items relating to directors.
  • Use a specific nominal code for any custom employer-wide item you have set up in BrightPay (i.e. addition/deduction types, hourly/daily/piece rates, pension schemes, savings schemes, etc.)
  • Preview journal on screen, export preview to PDF, or print.
  • Export journal CSV file for import into your accounting software.

Several accounting software providers can accept a direct upload of a payroll journal via an API, negating the need to export/import a CSV file. We plan to add this functionality for supporting providers soon.

Please get in touch if you'd like to see built-in support for any other accounting software providers.

 

Bureau Features

BrightPay 2017/18 includes several new features specifically targeted at accountants, bookkeepers, or other payroll bureau service providers. These bureau features are exclusive to the bureau version of BrightPay.

Improvements to BrightPay Startup Window

The columns on the BrightPay startup window can now be customised, and you can order the list of employers on the startup screen by any column. To help make this personalisation more useful, the size and position of the startup window will now be remembered between launches.

The data on the startup window now more reliably updates by itself - you no longer have to open a file to get it to do so.

Client Details

You can now record the following client information for each employer in BrightPay:

  • Contact name, email address and phone number
  • Status
  • Due date
  • Notes
  • Label colour

This information can be edited directly from the startup window by right-clicking on an employer and selecting the new View/Edit Client Details menu option (this menu also includes a quick one-click link to set a label colour), or it can be entered via the new Client Details tab in Edit Employer Details when a file is opened in BrightPay.

Perhaps most usefully, these client details can be shown as columns on the BrightPay startup window, enabling you to more effectively manage your client workflows as an individual or across a team.

Batch Send RTI Submissions for Multiple Employers

A new Batch Operation tab on the BrightPay startup window enables you to process or perform a task on multiple employer files with a single click.

The first supported batch operation is to send all outstanding RTI and CIS submissions.

We have a plans to add more batch operations in future.

Keep Your Client Documents and Files Organised

In BrightPay 2017/18, exported documents and files (e.g. payslips, P30s, reports, pension CSV files, journals, snapshots, etc.) are automatically organised into a separate folder structure for each of your clients by default. (If you don't want this, you can revert back to the previous functionality of exporting all files to a single location in BrightPay Preferences.)

 

BrightPay Connect

In case you missed it, we launched "BrightPay Cloud" in summer 2016. We have now rebranded this as BrightPay Connect. It works exactly as it has to date, including some further refinements and new features for 2017/18.

We have a detailed web page about BrightPay Connect here. Here's a quick overview of what it's all about:

  • BrightPay Connect provides a secure, automated and user-friendly way to backup and restore your payroll data on your PC or Mac to and from the cloud.
  • BrightPay Connect provides a web/mobile based self service dashboard for your employees, enabling them to:
    • View/download their payslips and other payroll documents
    • View their calendar, and make requests for annual leave.
    • View and edit their personal details.
  • BrightPay Connect provides a web/mobile based self service dashboard for employers and clients of payroll bureaux, enabling them to:
    • Access the payroll documents and data for each of their employees.
    • View an employer-wide payroll calendar.
    • View payroll reports exactly as you have set them up in BrightPay.
    • View the schedule of HMRC payments, outstanding amounts, and access the P30 for each tax period.

BrightPay Connect is built for security, reliability and stability, and costs just £49 per employer. Bulk pricing is available for bureaus.

 

Other 2017/18 Changes in BrightPay

  • The foundational technology of BrightPay has been updated to the latest version, which immediately brings many performance, reliability and security improvements (and opens up new possibilities to our development team!). A side effect of this update, however, is that BrightPay 2017/18 cannot be run on Windows XP. We've attempted to make all customers aware of this change several times over the past six months, and our telemetry now shows that less than 1% of our customers still run on Windows XP. So while we do apologise for any inconvenience this causes, with the improvements gained it is unquestionably the best decision for our customers as whole.
  • BrightPay 2017/18 will automatically offer to import your BrightPay 2016/17 files on first launch.
  • New feature: Piece of Work rates – if you pay (or part pay) your employees by a unit other than salary, the hour or the day, BrightPay now caters for you.
  • BrightPay 2017/18 now allows you to adjust the 5.6 weeks statutory holiday weeks entitlement figure for annual leave calculation types.
  • Real Time Information – more flexible workflow allows you to come back and check for a response from HMRC for an already sent submission, rather than having to start the submission process over from scratch.
  • Expenses and Benefits:
    • Company car information is now reported on the FPS submission.
    • Vouchers and credit cards can now be payrolled.
  • Support for new 'Serious Ill Health Lump Sum' indictor on FPS submission.
  • Support for custom hourly/daily rate multipliers.
  • Support for starters with no starter declaration.
  • Improves how pay dates are entered when finalising payslips – you can now set a different pay date for individual employees if need be. When re-opening and re-finalising payslips, the previously used pay date is remembered.
  • Import from Moneysoft 2016/17 (at the time of writing, this supports importing the basic details for employers, employees and subcontractors only).
  • Royal London contributions now use a tax monthly based contribution schedule.
  • Optimisations to data file size and installation package size.
  • Lots of minor improvements throughout the entire BrightPay user interface, as well as the latest bug fixes.

 

Includes all updates to BrightPay 2016/17 since March 2016

While we have traditionally focused our announcements of new features and updates in each new tax year version of BrightPay, it doesn't mean we're not busy during the rest of the year. In 2016/17, we released many updates and enhancements throughout the tax year, all of which are of course included in BrightPay 2017/18. See our release notes for full details. Here's a quick reminder of the main areas of improvement:

  • Statutory Minimum Wage flagging and reporting.
  • Retroactive Statutory Sick Pay.
  • Centralised agent sender credentials and details.
  • Support for several new Auto Enrolment scheme providers.
  • Ability to disable carry-over of shortfall amount between HMRC pay periods.
  • Ability to include employer logo and further customise the layout of Auto Enrolment letters.
  • Batch P11 and P60.
  • NEST – ability to override contributions schedule dates, validate groups and payment sources, and send payment approval requests
  • CIS – ability to import pay records from a CSV file, zeroise payment records and print a tax period summary.
  • Mid Year start summary report.

 

More Coming Soon

We're already working on our BrightPay 17.1 release scheduled for April 2017, which will contain several improvements and some new features, especially around Auto Enrolment (re-enrolment, ability to more easily switch employees between pension schemes, improved handling of opt-outs, etc.)

Watch this space!

Posted byRoss WebsterinPayroll SoftwareSoftware Upgrade


Mar 2017

9

Spring Budget 2017 - Employer Focus

The main points to be noted by employers from Spring Budget 2017 announced by Chancellor of the Exchequer, Philip Hammond are:

• The personal tax allowance will increase by £500 from £11,000 to £11,500 from 6th April 2017 as previously announced, this is in line with the government's goal to have the personal tax allowance at £12,500 by 2020.

• The Dividend Allowance will decrease by £3,000 from £5,000 to £2,000 from 6th April 2018. This means that there is no tax payable on dividend payments up to £2,000 from April 2018 onwards. Any dividends above this allowance will be taxed at 7.5% for basic-rate taxpayers, 32.5% for higher-rate taxpayers and 38.1% for additional-rate taxpayers.

• There were no changes regarding company car and van charges or fuel charges.

• In the Finance Bill 2017, legislation will be introduced by the government about dates where an employee can make a payment in return for a Benefit in Kind they receive, this can reduce the taxable value of the Benefit in Kind. The 6th of July after the end of that tax year has been decided by the government, so if employees make a payment for the BIK before that date, they can reduce the taxable value of the BIK or remove if payment in full is made. This will be for the 2017-18 tax year and following tax years.

• Termination payments over £30,000 which are subject to income tax currently from April 2018 will be subject to Employer National Insurance Contributions (NICs) The first £30,000 of a termination payment will remain exempt from Income Tax and NICs. In the Finance Bill 2017, the tax treatment of termination payments will be clarified and this will include all contractual and non-contractual payments in lieu of notice taxable as earnings and requiring employers to tax the equivalent of an employee’s basic pay if notice is not worked. The changes, including to Foreign Service Relief, will take effect from 6 April 2018.

• The Money Purchase Annual Allowance to £4,000 will be reduced from April 2017, down from £10,000. This restricts the amount of tax relieved contributions an individual can make in a year into a money purchase pension, if they have flexibly accessed their pension savings.

• The Government is carrying out the first statutory review of State Pension Age and the details will be published in their review by 7th May 2017.

• HMRC's compliance team are monitoring employers that are claiming the Employment Allowance, as it has been reported that some employers are using avoidance schemes to avoid paying National Insurance amounts due.

Posted byDebbie ClarkeinHMRCPayrollPayroll Software


Feb 2017

15

Customer update from BrightPay

Have you tried our latest Cloud add-on?

BrightPay Connect is our newest add-on for BrightPay that offers powerful automatic backup features and annual leave features. Give your client and their employees online access to their payroll data. Significant discounts available for multiple bulk purchases.

Book a BrightPay Connect Demo

 

Webinars for Bureaus

BrightPay have designed a number of webinars that are specifically tailored to meet the needs of payroll bureaus. Register for our next free webinar: Surviving Brexit for your Payroll Bureau. With Brexit uncertainty and 750k employers to stage in 2017, how will your bureau survive the fallout of Brexit to stay profitable?

      

 

BrightPay Payroll Training - 5th April & 11th April

We have designed training webinars to take you step-by-step through the payroll and auto enrolment process. At the end of the training session, participants will know how they can best use BrightPay to suit their payroll requirements.

Find out more

 

BrightPay 2017/18 Release

BrightPay 2017/18 is packed with lots of new features, including a Payroll Journal export to accounts packages, the ability to batch send RTI and CIS submissions for multiple companies and much more.

Purchase BrightPay 2017/18 

 

Important Update for free BrightPay users

Please take time to read this important update for all free BrightPay users.

Read here

 

Risk of County Court Judgement for Employers who ignore Automatic Enrolment Duties

Employers who are persistently ignoring their automatic enrolment duties are being warned by The Pensions Regulator that they could be issued a county court judgement.

Learn More

 

Have you tried our sister product, Bright Contracts?

Bright Contracts has everything you need to create and manage up-to-date staff policies and procedures and contracts of employment.

Download a free trial

 

 


Feb 2017

14

2017-18 Notice of Coding - P9

Electronic Notification - HMRC will be sending out email notifications from 18th February up until the 5th March to notify employers that P9 coding notices for the tax year 2017-18 are available to view online. HMRC have advised employers to ensure when logging into their online account to ensure they have the correct tax year selected, 2017-18. And also if the notices are not available that day, to leave it 24 hours and log in the next day and the P9s should be available to be viewed.

HMRC have commenced to send out the P9 paper coding notices and employers should expect to receive them up until the 17th March, although some employers may receive this notifications up until 20th March. If for some reason the employer does not receive the paper coding notice before the 6th April 2017, the employer may contact HMRC Employer Helpline on 0300 200 3200 and request a duplicate. Just to note the duplicate will only be made for the full employer PAYE scheme and no individual tax codes will be sent for individual employees. HMRC have advised that the duplicate requests may take up to 14 working days.

Posted byDebbie ClarkeinHMRCPayroll Software


Feb 2017

10

Higher rate Scottish Taxpayers to pay more

The new tax year will see thousands of Scots having to pay more in income tax compared to their British counterparts earning the same salary.

This follows the announcement that the wage at which Scots will start to pay the 40p income tax rate will remain frozen at £43,000 in tax year 2017-18. For the rest of the UK, this threshold will increase to £45,000 when the new tax year commences in April.

As a result, it is estimated that approximately 370,000 higher rate taxpayers in Scotland will pay up to £400 more than people earning the same in the rest of the UK.

Under devolved powers, Scotland is able to vary the rates of Scottish income tax (SRIT) by up to 10% from those set by the government in Whitehall.

Posted byVictoria ClarkeinHMRCPAYEPayroll


Feb 2017

6

Risk of County Court Judgement for Employers who ignore Automatic Enrolment Duties

Employers who are persistently ignoring their automatic enrolment duties are being warned by The Pensions Regulator that they could be issued a county court judgement. Employers that ignore penalty notices issued by the The Pension Regulator to them are more likely to be issued with a CCJ. And if an employer does not pay within the 30 day limit of when they received the CJJ, these details will be recorded on their credit record. This may affect their borrowing ability in the future.

According to information from The Pension Regulator nearly 3,000 penalty notices were issued to employers between October and December 2016. In this same timeframe 870 escalating penalty notices were issued to employers. The number of fines have risen in line with the higher amount of employers now reaching their compliance deadline. Due to a small number of employers failing to pay these fines a number of County Court Judgements have now been issued.

The Pension Regulator believe that the smaller employers are leaving things to the last minute for their automatic enrolment duties, but if a compliance notice is issued hurries the employer up to fulfill their duties.The executive director for auto-enrolment at The Pensions Regulator, Charles Counsell , said: “Burying your head in the sand and ignoring your legal duties means your staff are missing out on pensions they are entitled to and your credit rating and reputation could be hit.”

Andy Beswick, managing director of business solutions at insurance firm Aviva, said: “No one wants to see small businesses being penalised for not complying with auto-enrolment. “A workplace pension can be a great asset to an employer when it comes to retaining and attracting key staff. It’s also a legal requirement so ignoring it isn’t an option. “There are a number of pension providers who have worked hard to make auto-enrolment as simple as possible for companies and advisers. With a bit of planning, the process of setting up a workplace pension is not as complicated as most people think.”

Posted byDebbie ClarkeinAuto Enrolment


Feb 2017

2

Nannies & Carers - How does Auto Enrolment affect me?

Auto Enrolment means that all employers must put certain staff into a workplace pension and pay into it. Employing someone in your home (such as a carer, nanny, or gardener) means that you are an employer and therefore you will have auto enrolment duties to complete. Your staging date is the date the law comes into effect for you. The Pensions Regulator will write to you to notify you of your staging date and tell you what duties need to be completed.

At staging, you must assess the age and earnings of your staff to see if they are an eligible jobholder. Eligible jobholders are those who are aged between 22 and state pension age and earn over £10,000 per year. You must automatically enrol these employees into a workplace pension scheme.

 

Auto Enrolment Tasks

  • Your first step as an employer is to set up a pension scheme and this can be done in advance of your staging date. When you reach your staging date, you must assess staff, and if eligible, enrol them into the pension scheme. Along with being enrolled into the pension scheme, you must also deduct contributions from employees pay and add these contributions to the employees pension pot. By law, the employer must also contribute to the scheme. These contributions must meet minimum regulations, which is currently 1% employer and 1% employee. By April 2019, these minimum rates will rise to 3% employer and 5% employee.
  • If an enrolled employee does not wish to be part of the pension scheme, they can decide to opt out of the pension scheme within 1 month of being enrolled. Employees who opt out are entitled to a full refund of any pension contributions made to date. All employees who are not eligible to be automatically enrolled are known as either non-eligible jobholders or entitled workers. Non-eligible jobholders may choose to opt in to the pension scheme, and if so, they must be enrolled and treated exactly the same as an eligible jobholder, i.e. must meet minimum employer and employee contributions. On the other hand, entitled workers may choose the join a scheme and this scheme does not have to meet these requirements.
  • Along with the above duties, you must also communicate with all employees. You must write a letter to eligible jobholders to let them know that they have been enrolled into a pension, the contribution rates and their option to opt out. A letter must also be sent to non-eligible and entitled workers to let them know of their right to opt in or join the scheme.
  • Another important auto enrolment task is to complete your declaration of compliance. This must be completed within 5 months after your staging date and notifies the Pensions Regulator that you have fully complied with AE. This must be completed regardless of whether or not you have automatically enrolled employees. If you have no eligible jobholders, be aware that you still have a number of auto enrolment responsibilities, including communicating with non eligible and entitled workers and completing the declaration of compliance. There are many other auto enrolment tasks that employers are responsible for, including keeping records for a minimum of 6 years and re-enrolling employees into a pension scheme every 3 years.

 

Software Solutions

Although software is not a legal requirement for auto enrolment, the Pensions Regulator recommends that you have software in place to simplify the process. Most payroll software enables employers to automate and simplify the employers auto enrolment tasks. It is important that HMRC Basic PAYE Tools users are aware that the software does not and will not cater for auto enrolment. This means that all the auto enrolment tasks must be completed manually, increasing the workload and the risk of errors.

If you have someone who manages your payroll or finances for you, it may be worth contacting them to see how they can help you with your duties. If you manage your own payroll, BrightPay is the perfect tool that will allow you to seamlessly and effortlessly process auto enrolment tasks. BrightPay automates most of an employers auto enrolment tasks, including employee assessment, auto enrolment communications and opt outs & refunds. The software is currently compatible with 17 different pension providers, including direct integration with both NEST and Smart Pension.

BrightPay’s standard employer licence for 2017/18 costs £99 + VAT per tax year. The 17/18 bureau licence is £229 + VAT per tax year. This includes full auto enrolment functionality, free support, and the ability to process payroll for an unlimited number of employees. BrightPay also has a free licence for employers with 3 or less employees. Book a demo today to see how easy it can be to process auto enrolment with BrightPay. The online demo lasts approx 30 minutes and will also include how you can easily process payroll on a day to day basis for employees. In the meantime, why not download a 60 day free trial to find out how your business can benefit from BrightPay.

Posted byRachel HynesinAuto EnrolmentPayroll


Feb 2017

1

Payroll Benefits 2017-18 - Register before 6th April 2017

Employers that wish to payroll benefits in the tax year 2017-18 must register with HM Revenue and Customs (HMRC) using the online Payrolling Benefits in Kind (PBIK) service before 6th April 2017 (if you had not already registered last year). You can register with HMRC using the PBIKs service Payrolling of benefits was introduced from the start of the tax year 2016/17 and will continue for the tax year 2017-18. Employers can account for the tax on benefits provided to employees through PAYE each pay day.

Registering with HMRC allows you to payroll tax on benefits without the need to submit a form P11D after the end of the tax year. P11D(b) returns will still have to be submitted and must include the total values of all payrolled and all non-payrolled benefits.

Using the online service, you can:

• Choose which benefits and expenses you want to include in the payroll for the following tax year

• Add or remove benefits and expenses

• Exclude employees who receive benefits or expenses but don’t want them payrolled. For these employees you must continue to report the benefit or expense on a P11D (you can exclude an employee at any time in a tax year but once you’ve done this you can’t reverse the decision, in year)

The only benefits you won’t be able to payroll are:

• Living accommodation

• Interest free and low interest (beneficial) loans

Tax is collected on benefits and expenses by adding a notional value to your employee’s taxable pay in payroll, tax is then deducted or repaid as usual as per the employee’s tax code. Payrolling Benefit In Kind functionality was incorporated into BrightPay 2016-17 and will continue in BrightPay 2017-18.

Posted byDebbie ClarkeinPayroll Software


Jan 2017

23

Living and Minimum Wage Increases on 1st April 2017

On the 1st April 2017 the minimum and living wage will increase again. Going forward the rate will then change every April, starting in 2017. 

The National Minimum Wage (NMW) is the minimum pay per hour most employees are entitled to by law. An employee's age and if they are an apprentice will determine the rate they will receive. The National Living Wage is the national rate set for people aged 25 and over.

  Rates from 1 October 2016 are: Rates from 1 April 2017 will be:
25 yrs old and over £7.20 per hour £7.50 per hour
21-24 yrs old £6.95 per hour £7.05 per hour
18-20 yrs old £5.55 per hour £5.60 per hour
16-17 yrs old £4.00 per hour £4.05 per hour
Apprentices under 19 or 19 or over who are in the first year of apprenticeship £3.40 per hour £3.50 per hour

Posted byDebbie ClarkeinPayroll