Many employers do not realise the amount of work involved in the communications aspect of auto-enrolment. In a recent study, it was revealed that communicating the changes proved to be the most challenging aspect post-staging date, with 19% of employers struggling with communicating changes to employees.
Many payroll software providers are updating their software to assist with auto-enrolment; however very few of them perform communication duties. When deciding on payroll software, employers sometimes forget to consider whether or not it caters for communications. By choosing payroll software that helps with communications, it can make the auto-enrolment process much easier for employers.
With auto-enrolment, you need to write to each member of staff individually depending on their employee category. Eligible jobholders, non-eligible jobholders and entitled workers all have different rights, and so each must receive different letters outlining their entitlements.
If postponement is used, you must also write to the postponed employees to notify them. Furthermore, if you already have a qualifying pension scheme in place you still need to write to staff members who are in the scheme to let them know that they are not affected. After staging, you must also monitor employees and communicate with any employee who becomes eligible for auto-enrolment for the first time or any new starters who are eligible.
It is your responsibility to make sure the right information gets to the right member of staff at the right time. There are time limits in place to ensure that employees have sufficient time to gather information on auto-enrolment so that they can make a well-informed decision.
The necessary communication required can be extremely time-consuming if left to do it on your own. However, by having payroll software that has the necessary letters ready to print for each individual it can make your job much easier.
All HMRC helplines now have 03 numbers, and the majority of calls by customers use those numbers. To help create a smooth transition to the new 03 numbers, and minimise inconvenience for customers, HMRC have continued to use their 0845 numbers.
0845 numbering stops December 2014
In December 2014, the 0845 lines to HMRC helplines will stop being used, and all calls to HMRC helplines will need to be made using 03 numbers.
To prepare for that change, from late August, customers using 0845 numbers to call HMRC helplines will hear a message letting them know that the 0845 line will be closing. The call will still be handled as normal, but customers will be given the relevant 03 number for the helpline.
In December 2014, when HMRC stop using the 0845 numbers, customers who continue using those numbers will hear a message saying that the line is closed. The message will give them the 03 number for the helpline and the call will then end. The customer will need to dial the 03 number to receive the assistance they were looking for.
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 firstname.lastname@example.org. 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
As of now, all organisations with 60 or more employees have reached their auto-enrolment staging date. Over the next four years, 1.3 million SMEs will be legally obliged to offer their workforce a pension scheme.
Unfortunately for smaller businesses, many are still unaware of the burdens of preparing for auto-enrolment.
The Shocking Truth
Recent research revealed some alarming statistics regarding how unprepared SMEs really are. According to the research:
• Two-thirds of SMEs (67%) have no idea when their auto-enrolment staging date is
• 49% of respondents understand little or nothing about the changes they need to make
• 32% of respondents felt they do not know enough about auto-enrolment to be able to determine its impact on their company.
It is worrying that so many employers are oblivious to the challenges ahead. A later staging date for SMEs is no reason for inertia; the earlier an employer begins to prepare the easier the transition will be. Planning for auto-enrolment can be a time-consuming exercise and does need considerable preparation. Employers need to consider a number of factors, including:
• How to prepare the company financially
• What pension scheme to opt with
• Using payroll to process pension contributions
Late fees may drive up financial burden
Preparing for auto-enrolment from a financial perspective is critical. Employers must pay contributions to their employees’ pension schemes, which will rise to a minimum of 3% of employees’ basic pay by 2018. However, additional charges may also apply, including potential fines if SMEs are late in setting up their auto-enrolment pension scheme.
Standard Life estimates that it could cost SMEs up to £34,000 to backdate contributions for just three months. The Pensions Regulator has the power to fine employers with less than 250 employees a maximum of £2,500 per day if they don't comply with their new duties on time. Late payment may also lead to employers liable to meet their employees' missed contributions if the employee is unwilling to do so.
All can be made easier...
Although these additional fees pose further risk to SMEs, it is not as dreadful as it sounds. By using a payroll provider, auto-enrolment is made easier and more understandable with less risk of making avoidable mistakes. By finding the right software to suit your company, administration charges can be kept to an absolute minimum.
To avoid penalties and costs, SMEs need to prepare themselves today. In a sea of additional charges and red tape, SMEs are advised to shop around to find the best pension scheme and payroll provider that suits their needs.
Many SMEs are unprepared for the financial burdens lying ahead, and to begin, employers are urged to become aware of their staging date as soon as possible. The earlier you begin to plan and seek expert advice, the less of a headache auto-enrolment will be for your business.
An estimated 1.25 million employers are eligible for the £2,000 Class 1 NI rebate, which came into force in April this year, yet around 1 in 10 small businesses are not claiming the annual £2,000 Employment Allowance.
The process of claiming the allowance in BrightPay is very straightforward. View our online support or call us if you want to find out how to claim.
The Chartered Institute of Taxation (CIOT) has made this submission to review the competitiveness of tax administration in the UK being conducted by the Office of Tax Simplification (OTS).
The CIOT says that their clients find that the reporting of realtime information as being, “too prescriptive, time consuming and even unworkable at times”. They are looking for a permanent concession to allow small employers to report monthly , rather than at the time of each payment of salary or wages.
Thesaurus Software is delighted to announce that it has entered into a corporate partnership with The Start Up Loans Company.
Through this exclusive arrangement, Start up Loans' clients will be offered free payroll software and support.
The Start Up Loans Company is a UK government funded initiative aimed to help new businesses by offering loans at attractive rates for the purpose of start up funding. Start Up Loans also helps with discounted and/or free products, services and mentoring which the start ups require to get up and running. This is where Thesaurus Software comes in with its free offering of BrightPay payroll software.
The Start Up Loans Company has funded and guided over 19,000 new businesses since its inception two years ago. Approximately 40 new businesses are started a day through the scheme.