Do all nannies need to be automatically enrolled?
Most do; nannies who are aged between 22 and the State Pension Age and earn above the Tax Free Allowance (currently £10,000) will need to be automatically enrolled..
A nanny who does not qualify to be automatically enrolled still has the right to ask to join a workplace pension.
My nanny is part time - will I have to set up a pension for her?
Yes – even though your nanny might not need to be enrolled she has the legal right to join a pension. That means that you need to have a pension in place for her to join.
What if my nanny doesn't want a pension? Do I still have to enrol her?
If your nanny qualifies for automatic enrolment, you are legally obliged to enrol her. However, your nanny can always opt out of the pension scheme once they’ve been enrolled if they don’t want to take part.
When will automatic enrolment affect nanny employers?
Automatic enrolment is being introduced gradually. The day the new legislation applies to you is called your Staging Date and will be between now and October 2017.
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.
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.”
Employers are unprepared for the new Shared Parental Leave legislation, according to studies despite the rules coming into force next week, on 1 December 2014.
More than one in five (21 per cent) HR Directors admitted they are not ready for the requirements of the legislation, while 70 per cent say they predict little or no interest from employees in the first 12 months.
Yet when employees were asked their views, a third (33 per cent) of 16- to 34-year-olds said they anticipate taking advantage of it within the next five years.
Shared parental leave is a new right that will enable eligible mothers, fathers, partners and adopters to choose how to share time off work in the first year after their child is born or placed with adoptive parents.. It will be an option for parents with a child due to be born on or after 5 April 2015.
The new allowance is designed to make it easier for women to return to the workplace after having a child, facilitating a more equal distribution of childcare responsibilities.
Yet, despite the potential benefits for work-life balance and gender equality, more than one in 10 (11 per cent) workers questioned have not heard of Shared Parental Leave, rising to 13 per cent of 16- to 34-year-olds.
This suggests an additional need for employers to educate staff to ensure they are all aware of the benefits and implications.
The introduction of Shared Parental Leave represents a step change for working parents, allowing them to take more control over child care responsibilities in the challenging few months after birth. Studies show that many employees are keenly anticipating the changes and the potential benefits they will bring. Some HR Directors may have underestimated the impact. In these cases, it’s time to start swotting up on the new rules, to ensure you’re ready to answer any upcoming employee questions.”
Check out your responsibilities at regulations at https://www.gov.uk/shared-parental-leave-and-pay/overview
Keep following www.brightcontracts.co.uk where we will be updating our Shared Parental Leave guidance regularly.
Pensioners will be offered new freedoms to dip into their retirement cash.
In the latest phase of the biggest shake-up of private pensions in a century, the over-55s will be able to withdraw several lump sums from their pension pots instead of just one.
George Osborne’s move raises the prospect of pensioners using their funds almost like bank accounts to invest in property or shares, pay off debts or help children and grandchildren.
The 55 per cent tax charge on pensions left to children and grandchildren is being abolished altogether.
Up until now, retirees were able to take 25 per cent of their pension tax free – a sum fixed on the day they first dipped into their pots.
If you had a £100,000 pot at the age of 55, the maximum you could take tax-free was £25,000. The rest typically went into an annuity.
However, in the Pensions Bill, the Chancellor will announce you can dip into your fund multiple times and have 25 per cent of each slice tax free. The balance would remain invested and grow, again tax free – giving savers an incentive to keep their money invested in the stock market.
Mr Osborne said: ‘People who have worked hard and saved all their lives should be free to choose what they do with their money, and that freedom is central to our long-term economic plan.
‘From next year they’ll be able to access as much or as little of their defined contribution pension as they want and pass on their hard-earned pensions to their families tax-free".
In order to assist employers keep their records up to date and avoid potential penalties, HMRC issue electronic alerts:
Message - Late Filing Note: Your full Payment Submission (FPS) has been sent late – FPS must be sent on or before the date of the earliest payment on FPS – If you have a valid reason for sending your FPS after any of the payment dates – you must complete the late reporting reason on future FPSs.
Message - Non Filing Notice: HMRC has not received the expected number of FPSs. Check whether any FPSs are still due for the tax period – HMRC works out how many FPSs you are expected to report based on previous filing data. If any FPS is still due, send it as soon as possbile and include a Late Reporting Reason if applicable.
- If you have stopped being an employer tell HMRC
- If you have not paid anyone send an Employer Payment Suymmary to tell HMRC
- If you have changed the amount of time between paying your employees e.g. from weekly to monthly, tell HMRC.
Message - Late Payment Notice – HMRC has not received your full payment when it was due
- Check your payments records against the amounts reported on your FPSs
- Pay any outstanding amounts to bring your payments up to date
- If the date that HMRC received your payment is after the date that the payment is due, make sure that future payments are made on time
- If the amount paid does not match the amount you reported on your FPSs, check your records to find out why
- If you offset anything against the FPS amount, you must send an Employer Payment Summary to correct this
- If you have made a mistake – correct payroll error.
Time off for ante-natal appointments: extended to fathers/mothers' partners with effect from 1 October 2014. Fathers/mothers' partners, including agency workers, will be given a new right to take unpaid time off work, of up to a maximum of 6.5 hours each occasion, to attend up to two ante-natal appointments (there will be no service requirement for this, although agency workers must have fulfilled the 12 week qualification period)
A guide for employers and employees available at www.dti.gov.uk/workingparents.
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.
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.
Employers should make sure they pay 2013/14 Class 1A National Insurance contributions (NICs) by the deadline of 22 July for electronic payments or 19 July for cheques. If they do not they may get a late payment penalty. Employers should check they have the right reference number to help the payment go straight through.
Ways to pay PAYE/NICs
HMRC strongly recommends that you use an electronic payment method.
Paying electronically is fast, secure and convenient provided you use an accurate reference number - and it's mandatory for employers with 250 or more employees.
It's your responsibility to make sure payments are made on time, whichever payment method you use. You may be charged interest and a penalty if your payment isn't received by the deadline.
HMRC counts all of the payment methods listed below as electronic:
• Direct Debit
• Online debit or credit card using BillPay
• Bacs Direct Credit
• Faster Payments by online or telephone banking
• GBS Transfer
• Bank Giro
• payment at the Post Office
You can find out more about these and other payment methods by reading the guide 'How to pay PAYE/Class 1 National Insurance/CIS'.