IR35 - also known as “off-payroll working rules” has been both a much-needed bit of legislation to tackle people not paying enough tax, and a massive headache for businesses. It has been marred in controversy since being rolled out to the private sector in April of this year due to mixed messages and confusion on how to properly comply
Basically, since the reforms were introduced, instead of the individual letting HMRC know if they’re an employee or contractor, and therefore treated differently when paying tax, the onus is now on the client engaging them to let HMRC know.
So this is now proving to be a headache as off-payroll workers are not entitled to receive or have deducted from their pay things like statutory payments such as SSP, SMP etc, National Minimum/Living Wage rate, holiday pay, student loans and automatic enrolment pension scheme contributions. So where the hell do you even start? How do you know who should be off-payroll or not?
First of all, you can quickly and easily check employment status for tax here. Once you have identified a worker who is inside IR35 you set them up on BrightPay Payroll Software and tick “off-payroll worker” which will disable entitlements that do not apply to contractors who fall inside the off-payroll working rules. Then, once the employee has been set up, BrightPay will automatically disable some settings such as student loans and annual leave entitlements.
Further to this, if a user tries to add statutory leave, BrightPay will automatically flag this to you and the statutory payment will not be processed. For automatic enrolment, an alert will appear for off-payroll workers for you to mark them as being exempt, which then disables any auto-enrolment features that may appear. Then, when making a full payment submission, it will automatically include details of workers who fall inside IR35, ready to send to HMRC.
If you are the contractor who is working for a large/medium-size company or public sector and are deemed to be inside IR35 then BrightPay has your back here too. Salaries paid to you via your own limited company can be paid without deductions of PAYE and NIC. This is because taxes have already been suffered on the payments from your client.
Now doesn’t that sound like a dream? Get someone to do all the hard work for you - sounds like my cup of tea. By using BrightPay you’ll save yourself a lot of time and energy, but more importantly, remain compliant in a time when HMRC are cracking down hard. One less stress to worry about in these very stressful times! For a full demo on all these amazing features head over to BrightPay and see what all the fuss is about!
Written by Aoibheann Byrne
During the pandemic, those who received Working Tax Credits did not need to tell HMRC about any temporary short-term reductions in their working hours as a result of coronavirus i.e. if they were furloughed or simply had less hours (which would have previously rendered them ineligible.) Any reduction was treated as if they were working full time hours, which was a real nice move from the tax man.
Those who receive Tax-Free Childcare were not required to prove their income under the same relaxation of the eligibility criteria during the height of the pandemic. However, now that all coronavirus related benefits have ended and the country is “back open for business”, anyone who gets tax credits needs to inform HMRC if their working hours have not returned to pre-COVID levels. Likewise, those who get Tax-Free Childcare need to now prove their income.
You now must work a certain number of hours each week to qualify for Working Tax Credits. Those aged between 25 and 59 need to work 30 hours or more to qualify, while those over 60 need to work 16 hours a week in order to qualify. If you are a person with a disability or a single person with one or more children, you must also work 16 hours or more each week to qualify. For couples with one or more children, you must work at least 24 hours a week with one of you working at least 16 hours in order to qualify.
From the 25th of November 2021 if your hours have not returned to normal as shown in your Working Tax Credit claim and you haven’t notified HMRC then you may have to pay back any overpayments and face a penalty of £300 which, if you ask me, is like kicking a dog when it’s down - but anyway!
The good news is that if you’re no longer eligible for Working Tax Credits, you will remain entitled to Child Tax credits if you already receive it and have not yet made a claim for Universal Credit.
For Tax-Free Childcare, you need to earn an average of £142 per week to claim up to £2000 per year per child towards childcare costs. As previously mentioned, this was relaxed during the pandemic for those on furlough or claiming SEISS and for those whose earnings fell below the threshold. But now it is “back to business” again and you now must prove that you are eligible (as above) every three months when you wish to apply.
Furthermore, Child Benefit and Tax Credit customers who use Post Office card accounts need to be aware that from the 30th November 2021 these accounts will be closing and you will no longer be able to receive your payments into them. If you are affected by this, you must notify HMRC of your new account details, be it bank, credit union or building society. This should be done as soon as possible so as not to miss any payments.
For more information on tax credits you can use the following options:
Written by Aoibheann Byrne
Ah Ireland, the land of a thousand welcomes. The Irish are so progressive in so many ways and are internationally renowned for being almighty craic. They look after each other, and that’s why it’s so surprising that currently, Irish employers are not obliged to pay their employees when they are on sick leave. It is at the discretion of the employers whether they want to include paid sick leave as part of their own policies and they can set their own rules on how much sick leave to pay and for how long. A survey done in 2019 found that only 44% of lawyers provided some sort of sick leave.
So what happens in Ireland if you catch the lurgy and you’re bound to your bed for a week? Along with plenty of pro-plus and some flat 7-Up you could be entitled to state benefits like Illness Benefit or Covid Illness Benefit, provided you have been making the requisite social insurance contributions to be eligible. In any case, neither of these benefits are equal to a typical week's pay.
From Jan 2022 it will be mandatory for employers in Ireland to provide Statutory Sick Pay (SSP) for employees. Read about how it will be calculated here: https://t.co/m8q2EEtT7Z #Payroll #SSP pic.twitter.com/Hgx0OfkVrj— BrightPay Ireland (@BrightPayEire) July 19, 2021
But like many things, COVID-19 has come along and changed everything. The amount of people who would have had to stay home and miss out on pay due to COVID-19 has shone a massive spotlight on the inadequacies of the Irish sick pay system and the lack of sick pay has been credited with many people choosing not to self-isolate when presenting with symptoms of coronavirus, hence why changes are now being made.
So what’s happening? From 2022, Statutory Sick Pay (SSP) will be an employment right and will be phased in over a four-year period. To begin with, there will be three days payable per year in 2022, rising to 5 days payable in 2023 and seven days in 2024, which will become 10 sick days per year by 2025. The phased introduction is to allow employers to prepare and adjust for the costs and changes brought with the scheme.
The sick pay will be paid by employers at 70% of the employees wage, subject to a daily threshold of €110 to ensure employers don’t face excessive costs. This threshold may be revised by ministerial order in accordance with inflation and change in incomes. To qualify for SSP, employees will need to obtain a medical certificate and must have worked for the employer for a minimum of six months. If the employee's entitlement period for statutory sick pay ends and the employee needs more time off then they may be able to qualify for the aforementioned Illness Benefit.
At the moment, sick employees must normally apply for Illness Benefit within seven days of becoming ill and no payment is made for the first three days. But this would now be counteracted by the new statutory sick pay reforms. For long convalescence, Illness Benefit is paid for a maximum of:
In 2021 the top rate of Illness Benefit for someone earning €300 or more per week is €203 a week. Rates are lower if your earnings are below €300 a week. The personal rate for Covid-19 enhanced Illness Benefit is €350 per week, it will be paid for a maximum of 2 weeks where a person is medically required to self isolate and for a maximum of 10 weeks for certified absence from work with a COVID-19 diagnosis.
If your employer does already provide sick pay entitlement then the good news is that this scheme will not interfere with any existing, more favourable, sick pay schemes that are in place. Employers can opt to pay more than the statutory sick pay if they’re feeling really really nice. In any case, whilst not the best SSP in the world, this is very welcome news and only a good thing. In the meantime we can carry on as normal and try our best not to get sick so wear your mask, wash your hands and keep your distance. Thankyouverymuch.
Written by Aoibheann Byrne | BrightPay Payroll Software
The past year has been rough for all businesses. (That’s my submission to the “Most Obvious Statement of the Year” awards - hope I win!) But seriously, we all know it’s been the pits. With everything going on it can be really easy to forget about all the commitments you still have to fulfil as an employer, even in the midst of a pandemic. Auto-enrolment is one such thing.
What is auto enrolment? Put simply, by law, every employer with at least one member of staff must enrol all those who are eligible into a workplace pension scheme which they must also contribute to. Since 2019, employers are required to pay 3% of employees’ qualifying earnings, the employee pays 4%, and the government adds relief of 1% tax - making the total contribution 8%. Tidy right? (It’s called automatic enrolment as it’s automatic for staff - they don’t have to do anything to be enrolled into a pension scheme. The employer should do this for them).
Well, some staff may wish not to avail of the workplace pension scheme you signed them up to for various reasons. But regardless, after three years, every three years, you must put the staff back into it. This is re-enrolment. With this you must complete a re-declaration of compliance to tell the Pensions Regulator that you’ve met your duties. If you don’t do this you can be fined.
But is it like a fine? Or a fine fine? Well, they can get pretty hefty, put it like that. If the Pensions Regulator isn’t satisfied with how you’re running a pension scheme they can issue a Compliance Notice, Improvement Notice or Unpaid Contribution Notice. They may also estimate any unpaid contributions, charge interest on them and recover any unpaid contributions. If they’re still not happy and feel you haven’t complied with your obligations then they’ll come to your house, kick your door down and slap you upside the head. Just kidding, but they will issue you with a penalty notice and fine. These include :
Crikey! I did tell you they aren’t messing about! So how can you avoid getting a penalty? Well, you can leave sticky notes on your calendar for every three years to remember to re-enrol employees, or you can tie a piece of string around your thumb really tight to remind you, or you can use an automated payroll system that will do all of the hard work for you in the background.
BrightPay Payroll Software is just the ticket. It’s an award-winning payroll software that automates all auto enrolment duties including re-enrolling employees for both employers and payroll bureaus. BrightPay is compatible with 18 different workplace pension providers and includes direct API integration with NEST, The People’s Pension, Smart Pension and Aviva. The software carries out all the employee assessments automatically and even sends out automatically prepared enrolment letters personalised to each individual employee. There is so much more I can say about this but instead let me direct to this page where the full features are outlined.
But the best bit? While most of the payroll software providers charge extra for the service, BrightPay provides it at no extra cost. *Mic drop* - wow! If that isn’t music to your ears then you must be deaf. Head on over and take another mental load off your poor suffering shoulders. You’ll never have to worry about the Pensions Regulator kicking your door down ever again.
Gather round the fire young payroll processors and let me tell you a tale of terror. The year is 2021, you’ve been in lockdown and working from home for the past year. All of your important work is stored on your trusty laptop. Not only that, but you’ve been processing payroll for a client who employs 20 people...and it’s payday. All of a sudden BAM! Your coffee cup knocks over and spills all over your laptop and the screen goes blank. It won’t switch back on. All your data has been lost. Did I mention its payday?!! Come back, stop screaming! It’s only a story!
But here’s the thing, it’s not a story. These accidents happen literally all the time and all the more so since we’ve been working from home with pets, children and other halves who have no respect for personal boundaries. In my case, my cat was trying to catch a fly and knocked my coffee cup over (yes really) but I’m sure everyone has their own story of misfortune to tell.
But accidents aren’t the only way in which your data can be permanently lost. Pretty soon we’ll returning to our offices again and with that comes the perils of the workplace such as:
Luckily there is a simple way to avoid the terror of losing all of your precious work and payroll data and it’s - yup you’ve guessed it - backing up your data.
Now, some of you may be manually backing up your data and that’s great. But there is a much easier way. BrightPay Payroll Software offers an add-on called BrightPay Connect that automatically, yes automatically, does this for you every time you run your payroll or make any changes to it. Any work you do gets automatically synchronised to the cloud.
Let’s talk about the cloud. It gets a bad rap sometimes and people seem to be a little tentative about it. But in actual fact it is an absolute ideal information storage space. It’s also easily accessible, remotely accessible and quickly accessible no matter where in the world you are (dependent on WiFi). So if you have any problems or lose any of your payroll data you can literally pluck it out of the sky and restore it to your computer.
Not only that, but BrightPay Connect maintains a chronological history of your backups so you can restore or download any of the backups at any time, whether it’s to a PC or a Mac. You can also backup onto your existing computer or simply download a backup to a brand new computer that hasn’t been destroyed by coffee, enabling you to get up and running right where you left off, no matter where you are.
So basically a secure, encrypted software that automatically stores your data in the cloud, making it easily and remotely accessible? Yes please - you’d be mad not to! And you don’t have to get rid of your cat either. For more information about BrightPay Connect, book a 20-minute demo that goes over all of the additional functionalities.
I don’t know about you, but I feel like I’m Bill Murray in Groundhog Day - stuck in an endless purgatory of the same day repeating itself over and over again with no escape. Yes it’s another day, another lockdown and it feels never-ending. Unless you’ve been hiding under a rock (in which case, is there room for one more?) you’ll know that England is now in a strict national lockdown until mid-February. That means that all non-essential business, schools and universities need to close and we all have to stay at home.
What does this mean for businesses and employees now who are once again affected by this absolute fiasco? Well, it seems it’s business as usual if you will pardon the pun, as not much has changed. However, Rishi Sunk did unveil “more financial support” for businesses affected by the lockdown measures yesterday morning (note my use of inverted commas). Retail, hospitality and leisure businesses will now be able to apply for one-off grants of up to £9,000 per property.
On top of these one-off £9k grants, a further £594m discretionary fund will be made available via local authorities and devolved administrations to support other businesses outside of these sectors who have also been affected by the lockdown.
There are already existing support packages in place though. These include grants of up to £3,000 for closed businesses, 100% business rates relief for hospitality, leisure and retail, and of course, everyone’s good ol’ pal furlough. While Rishi has been very quiet on further furlough support, the current scheme is due to run until the end of April as it is so this seems the government are still optimistic that we will be out of the woods by then with the rollout of the mass vaccination programme. Remember, you can apply for furlough at any time, even if you have never claimed under the scheme before.
Along with furlough, other notable absentees from Rishi’s measures included extending the business rates holiday (which ends in April), VAT cut, or an increase in statutory sick pay, despite calls from business leaders for such moves. Even with the new £4.6bn support package, is it enough?
With Englands’s lockdown due to be reviewed on February 15th and Scotland’s at the end of January we now enter another period of stasis. We can only hope that this really is the last time we have to endure this and hope that all the hard work that has gone into keeping businesses afloat and employees on the payroll over the past 10 months has not been in vain. Stay tuned for more updates over the coming weeks. And with that, I’m off to bake my seventy-sixth loaf of banana bread and have a cry into the tea towel.
What springs to mind when you hear the word ‘cloud’ will vary from person to person. Some will think of the weather as they look, grumbling, out their front window. But others will be thinking about all that extra storage on their iPhone. The meaning of the word has changed in recent times and most of us will now think the latter. But what about those who haven’t a notion what you’re on about? What is the cloud?
The cloud is a general term for any computing service that involves hosting over the internet to deliver computing services in lieu of a hard drive. Services such as storage, payroll and HR information. The other key feature is that you can access these services or information anytime, anywhere from any device that is connected to the internet. In fact, you’re already using cloud services if you use social media, Google Drive and Dropbox to name but a few. And now the cloud has become a must-have for any business who wishes to keep up with the times.
I can hear some of you now: “It sounds great, but my employees would never use something like that”. Well, that’s where you’re wrong. A recent survey found that 48% of people believe technological advances will change the face of the workplace and a massive 87% of those said they would be happy to adapt to technological changes if the right tools were given to them. Wow! So how do I know which cloud platform to choose for my business?
I’m glad you asked! Our experts got together for a brainstorming session and found that there are four key things to look out for when choosing the right cloud platform for your business - cost, compliance, simplicity and connection.
So, there you have it… off you go now! Good luck scouring through the internet trying to find the perfect cloud platform. But…., well, ....it is Christmas after all and I’m feeling generous. Ah, what the heck, I’ll just let you in on a secret which is the best cloud payroll platform for businesses out there: our very own BrightPay Connect.
BrightPay Connect is an add-on to BrightPay’s award-winning payroll software and ticks literally every single box I just mentioned over the course of this post. I’ve done enough talking so instead let me show you. Book a demo today to find out why BrightPay Connect is the perfect fit for your business.
Merry Christmas everyone! Don’t say I didn’t get you anything!
Can you believe there are only two more Saturdays until Christmas?! I for one am in full on festive mode. My tree is up, the baubles strategically placed on top and out of my cat’s reach, and I’ve been blasting my ‘Xmas Hits’ playlist at full volume throughout my apartment, much to the chagrin of my long-suffering partner. It feels like a well deserved holiday at the end of a very crap year and even more well deserved time off.
But this Christmas has posed a new problem for the world of payroll - what happens with furloughed employees, especially as many would normally take Christmas and New Year’s as annual leave? Can they be furloughed for this period?
Where a bank holiday (namely Christmas Day, Boxing Day and New Year’s Day) falls inside an employee’s period of furlough and that employee would have normally worked this bank holiday anyway, then their furlough will be unaffected. However, if the employee would normally have taken these days as part of their annual leave then you, as the employer, have two options:
a) They can take the bank holiday as leave - If the employee does take the bank holiday as annual leave whilst on furlough then holiday pay must be paid instead.
b) They defer the bank holiday - if the employee doesn’t take the bank holiday as annual leave then this must be deferred as the employee will still be entitled to these days as leave. So they can take them at a later date.
So what happens with holiday leave during furlough then? Furloughed employees still continue to accrue annual leave entitlement as per employment law. Employees can agree to vary their holiday entitlement with their employers as part of their furlough agreement but workers are still entitled to a minimum of 5.6 weeks of statutory paid annual leave each year. This is non-negotiable.
Employees can still take holidays whilst on furlough though if they are being flexibly furloughed then any hours they take as holiday during the claim period should be counted as furloughed hours and not working hours. You should not place employees on furlough just because they’re going to be on paid leave or because you usually do less business over the festive period. (However, if you expect your business to be shut down completely or to be severely affected over the 2 week period due to the pandemic then you can of course still claim under the Coronavirus Job Retention Scheme).
A nice succinct summary of this I read online reads as follows:
“If you were going to furlough [employees] anyway then there is nothing to stop you doing it whilst they are on (pre-booked) holiday, or forcing them to take holiday (provided you give them adequate notice). If, however, you are 'furloughing' them because they've booked a couple of weeks off, then you are abusing the system and do not have a valid claim.”
This does mean that you will have to pay the employee’s holiday pay at the normal rate of pay and will be required to pay employees who are on holiday additional amounts over the grant to make up their usual holiday pay. If an employee usually works bank holidays then you can agree that this is included in the grant payment.
Whew! So a lot to digest but I hope that helps to clear things up a little bit. But as always, if in doubt please check the full guidance on the HMRC website. And once that’s all sorted, get your tinsel headdress on, pop open the mulled wine and start looking forward to the coming festivities!
I’ve been called a hero a couple of times in my life. There was that time at uni when I whipped out a bottle of Apple Sourz at an afterparty. Or there was the time when I saved a baby bird from being eaten by my dog. But none of these times hold a candle to how good it feels to be part of the team at BrightPay Payroll Software who have won the COVID Hero Supplier Award at the Accounting Software Excellence Awards 2020.
Sure, it would have been great to do a clean sweep and win all the awards going, (we were nominated for 3 in total) but this one has a special place in our hearts as we have put so much into making sure our customers have felt supported during what has surely been one of the toughest periods of time in living memory. So to be not only recognised for our efforts but awarded for them, well - let’s just say *gulp* sorry I just need a moment I have something in my eye.
There were a number of criteria that were considered by the panel for this award. Judging took into account the speed, time and relevance of businesses’ COVID-19 response and how many customers accessed it. They were looking for businesses that really went the extra mile and thought outside the box to make their customers feel supported, whilst also managing to reflect their brand values.
As BrightPay’s core brand value is to provide outstanding payroll software with amazing customer support at affordable pricing, the fact that we managed to maintain this during the pandemic and up our ante to match the ever-changing needs of our clients AND be awarded for it is very special indeed.
Speaking at the Accounting Excellence Awards, host extraordinaire Mike Goldsmith said “the judges saw that BrightPay went above and beyond to support their clientbase and payroll professionals at a time when they were under pressure with furlough claims and interpreting guidance. BrightPay did this through a coordinated strategy that went beyond product enhancement. Their success in this was evidenced by high customer satisfaction and impressive reach with their support material.”. Brb, off to print this off on t-shirts for all the staff.
So thank you to all our customers as, without you, we really would be nothing! This will be an extra reason to celebrate at our virtual Christmas party this weekend (any excuse for an extra glass of bubbly!).
Whilst working from home, my daily TV schedule consists of tons of Judge Judy, border patrol programmes and Can’t Pay Take It Away (great show). But yesterday, like many others, I was glued to the live stream from the House of Commons as Chancellor Rishi Sunak unveiled a plethora of announcements that are aimed at stimulating the festering sore that is the UK economy after a global pandemic and nationwide lockdown.
And let me tell you, it’s a lot. Rishi has clearly been listening and a lot of his rhetoric and policy announced in the Summer Statement addressed those whose jobs and futures have been affected the most, in particular young people (16-24) and the hospitality sector. Unemployment rates and redundancies are on the rise with the tapering off of the Coronavirus Job Retention Scheme and these measures are to try and help employees stay in work and help employers to enable them to do so, with the Chancellor stating: “stand by workers and we’ll stand by you”.
So what’s been announced? While there was an abundance of big news, such as the temporary writing off of stamp duty under £500,000 and a £2bn “green homes grants” to make more homes energy efficient, in this blog I will focus mainly on the points that apply to employees and employers.
So there you have it. While these measures are most welcome and certainly very creative (Rishi gets an A for effort) there are still major concerns not being addressed and it feels a little like putting a plaster on an arrow wound as the economy slowly bleeds out. We need this sort of energy not just now, but for the next couple of years as we come to terms with all of this.
So personally, I will take my butt to a half-price meal and enjoy every bite whilst I silently reserve judgement on it all and wait to see what happens.