A range of employment changes are set to come into effect in 2015. Employers need to familiarise themselves with these changes to ensure they are processing payroll correctly.
Some of the most significant changes to be aware of include:
1. Family Friendly Changes
a. Shared Parental Leave & Pay
This is brand new legislation which will apply to parents with babies due to be born/placed for adoption on or after 5th April 2015. Eligible parents will have the flexibility to share statutory leave and statutory pay in the child’s first year. Under the legislation, leave and pay may be taken in discontinuous blocks, and also both parents may take leave and be in receipt of statutory pay at the same time. Whilst using payroll software will ease the burden of processing shared parental leave and pay, there is a rigorous application process that must be completed by employees. To be sure you are ready, employers are well advised to familiarise themselves with the regulations early. Further details are available here.
b. Changes to Statutory Adoption Leave & Pay
From 5 April 2015 there will be no service requirement in order for employees to be eligible to take adoptive leave. Additionally, from 5 April 2015 the Statutory Adoption Pay rates will increase; the first 6 weeks will be paid at 90% of average weekly earnings. After that SAP will be paid at the lower of either the weekly standard rate or 90% of average weekly earnings. This will mirror the Statutory Maternity Pay rates.
Finally, primary adopters will now be entitled to paid time off to attend up to five adoption appointments.
c. Rise of child’s age limit for parental leave
The current right to take 18 weeks’ unpaid parental leave before a child’s 5th birthday is to be extended from 5 April 2015, so that leave can be taken up to the child’s 18th birthday.
2. Automatic Enrolment
Auto Enrolment will continue to be rolled out to all employers. Every UK employer has a date on which workplace pensions automatic enrolment applies to them, i.e. a staging date. For most employers that had between 30 and 58 staff on 1st April 2012 their staging date will be during 2015. However staging dates can vary, so employers are well advised to check out their staging date on the Pensions Regulator site http://www.thepensionsregulator.gov.uk/employers/tools/staging-date.aspx
3. New Fit for Work Service
Due to be rolled out during the year, the Fit for Work Service will offer employers access to free occupational assistance for employees who have been off sick for four weeks or more. Employers will also be able to claim up to £500 tax relief on payments for medical treatment for their employees where the treatment has been recommended under the new scheme.
4. Statutory Pay Rates
The usual shifts in statutory rates of pay are scheduled for 2015. Rates for statutory maternity, paternity, and adoption pay will increase from 5 April 2015, as too will statutory sick pay rates. Any changes to the national minimum wage rates will be effective from 1 October 2015.
5. NIC and Under 21s
The abolition of employer NICs for Under 21s comes in to effect from 6th April 2015. Employers will not be required to pay Class 1 secondary NICs on earnings up to £815 per week, for employees who are under the age of 21. Class 1 secondary NICs will continue to be payable on all earnings in excess of £815 per week. This could result in savings to an employer of up to £90 per week for hiring an employee who is under 21!
Meet John, the small business owner who uses BrightPay payroll software to easily manage his automatic enrolment duties.
In this video, John uses a NEST pension scheme to enrol his employees. However BrightPay is also compatible with NOW: Pensions, The People's Pension, Scottish Widows, and many more.
BrightPay provides everything you need to prepare your clients for Auto Enrolment.
- Staging and employee assessment
- Postponement feature
- Handles employee communications
- Ongoing monitoring and reporting
- Opt - outs and refund options
- Free email and phone support
- Fully compatible with RTI submissions & HMRC payments
- Integration with many pension providers (including tailored CSV preparation)
BrightPay is HMRC approved, RTI compliant and ICB (Institute of Chartered Bookkeepers) accredited.
The tax office helpline has been branded a 'lottery' with almost a third of callers cut off before they even get to speak to an adviser, according to new research, the DailyMail wrote.
The average waiting time to speak to a real person was 18 minutes - with one person left hanging on the line for 41 minutes.
Consumer champions Which? tested Her Majesty's Revenue and Customs (HMRC) helplines ahead of the self-assessment tax return deadline on January 31st.
Which? researchers made 100 calls to HMRC's self-assessment and general enquiries helplines to see how easy it is to get through to an adviser.
Nearly a third of the calls (29 per cent) were cut off by the automated system before the caller could speak to anyone, with callers being told it was because the helpline was 'very busy'. In the 71 calls where researchers did manage to get past the automated system, they were then put on hold. On average it took 18 minutes to speak to a real person, but one caller was left waiting for 41 minutes.
The Which? researchers found the later in the day they called, the longer the wait and the more likely they were to be cut off.
The automated system also struggled with certain words and phrases. A query about 'my tax code' was fine but when asked 'Do I need to pay tax on premium bond winnings?' it asked if the caller was changing a name, or asking about a VAT surcharge notice.
In a separate survey of more than 1,000 Which? members, one in five (20 per cent) who had contacted HMRC in the last year said they found contacting them difficult, compared with 15 per cent of those who contacted the Department of Work and Pensions, 12 per cent who contacted their local authority and eight per cent who contacted the DVLA.
Richard Lloyd, Which? executive director, said: 'We've found people could face lengthy waits or even be cut off when trying to get assistance from HMRC's helplines. 'With large numbers of people soon to be seeking help with their self-assessment tax return, we want to see HMRC doing more to monitor and improve their call-waiting times.'
Which? said it had shared its findings with the Treasury and HMRC and have also briefed the Public Accounts Committee.
Hopefully this might help them to improve their automated and phone systems in time for the Tax Deadline on the 31st of January.
The statutory payment recovery rates and NIC threshold for 2015-2016 have now been confirmed.
The Department for Work and Pensions (DWP) have confirmed that the statutory payment recovery rates and NIC threshold will remain the same for 2015-2016:
• 92% if the total Class 1 NICs (both employee and employer contributions) are above £45,000 for the previous tax year,
• 100% plus an additional 3% (NIC compensation rate) if the total Class 1 NICs for the previous tax year are £45,000 or lower.
Since October 2012, employers in the UK are obligated by law to enrol their employees into a pension scheme who fall within a certain age and pay bracket. Employers must also contribute towards this pension. This is called Auto Enrolment which will continue to be rolled out over the next few years with the largest companies already enroled. Employers will need to review their pension provision and make sure they’re complying with these new Auto Enrolment duties correctly.
BrightPay & AccountingWeb
BrightPay and Accounting Web are concerned with the number of small businesses and accountants that do not understand the implications of auto enrolment for their business. To combat the lack of awareness Accounting web have launched their ‘No one gets left behind’ campaign to let payroll bureaus and individual employers know what steps they need to do to comply with their AE duties.
BrightPay is delighted to become an official supporter of this Auto Enrolment awareness campaign. The aim is to help business comply with these new duties so they do not face large fines or put added pressure on their business. Accounting web have produced eight easy to understand, simple steps that explain what you need to know.
As of the start of December over 8,000 accountants are aware of Auto Enrolment due to this campaign. Make sure to share this guide with friends, work colleagues and business associates. Auto Enrolment can be made easy if bureaus have the right payroll software in place to deal with Auto Enrolment.
Help BrightPay spread the word and get the message out there.
Accounting Web - Free Guide
More than 130,000 people will escape the higher rate of tax, as it rises in line with inflation for the first time in five years.
The higher rate threshold – where taxpayers pay a 40 per cent rate – will jump from £41,865 to £42,385 next year, George Osborne announced in the Autumn Statement.
The £100 rise to the personal allowance was also passed on in full to higher rate tax payers.
Mr Osborne said the increase to the higher tax rate threshold was a “down-payment” on the government’s promise to raise it to £50,000 by the end of the decade.
The Chancellor also revealed an increase in the personal allowance – the amount of money that can be earned tax-free every year – to £10,600 from next April, £100 more than the £10,500 expected.
It has also been announced that business who employ apprentices under the age of 25 will no longer have to pay national insurance contributions for them.
Among the other measure announced was an extension of the £2,000 Employment Allowance to carers, freezing Universal Credit work allowances for another year and cutting tax credits when overpayments are certain.
George Osborne revealed the reduction, designed to reduce levels of youth unemployment, alongside other announcements that will affect employers – including an earlier than expected increase in the state pension age and more accessible funding for apprenticeships available directly from HM Revenue & Customs (HMRC).
The removal of employers’ national insurance (NI) contributions for under-21s in April 2015 will follow the introduction of the £2,000 “employment allowance” that comes into force next April. Higher-rate tax payers who are under 21, earning £813 per week or more, will still attract employer NI contributions.
“Employer NI contributions will be removed altogether on a million and a half jobs for young people. We’re not going to leave young people behind as the economy grows,” said Osborne. “We are going to have a responsible recovery for all.”
The Department for Business, Innovation and Skills has confirmed that from 6 April 2015, the Student Loan threshold will rise by 2.5% to £17,335. The current threshold for 2014/15 is £16,910.
On a ‘per pay period’ basis, the £17,335 threshold for 2015/16 can be estimated as follows:
- £333.67 weekly
- £1,444.58 monthly
This new threshold will apply to all current borrowers for whom employers make Student Loan deductions.
BrightPay 15/16 will automatically calculate and apply the appropriate student loan deduction as per the new 15/16 Student Loan Deduction Tables.