From 2021-22 onwards the option will no longer be available for employers to informally payroll benefits by making an agreement with HMRC. Informally payrolling benefits meant the employer did not have to register for payrolling of benefits before the start of the tax year and made an agreement with HMRC. All employers that now wish to payroll benefits in the tax year 2021-22, even if they had this previous arrangement with HMRC, must register with HMRC using the online Payrolling Benefits in Kind (PBIK) service before 6th April 2021 (if you had not already registered last year).
Employers can register with HMRC using the PBIKs service. Registering with HMRC allows you to payroll tax on benefits and expenses 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:
The benefits you wont be able to payroll are:
Tax is collected on benefits and expenses by adding the benefit or expense to the employee’s taxable pay in payroll. Tax is then deducted or repaid as usual as per the employee’s tax code and the details reported on the Full Payment Submission to HMRC. Payrolling of benefits and expenses can be processed for employees in BrightPay 2021-22 and a PBIK form can be produced for employees.
Chancellor of the Exchequer Rishi Sunak presented Budget 2021 to Parliament today 3rd March 2021.
The main points to be noted by employers are:
The latest Advisory Fuel Rates that will come into effect from 1st March 2021 for company cars has been advised by HMRC. Employers may use the old rates for up to one month from the date the new rates apply. Employers are under no obligation to make supplementary payments to reflect the new rates but can do so if they wish. Hybrid cars are treated as either petrol or diesel cars for this purpose for the fuel rates. For fully electric cars, the Advisory Electricity Rate is 4 pence per mile. However, electricity is not a fuel for car fuel benefit purposes. Click here to see all details per HMRC.
|Engine size||Petrol - amount per mile||LPG - amount per mile|
|1400cc or less||10 pence||7 pence|
|1401cc to 2000cc||12 pence||8 pence|
|Over 2000cc||18 pence||12 pence|
|Engine size||Diesel - amount per mile|
|1600cc or less||9 pence|
|1601cc to 2000cc||11 pence|
|Over 2000cc||12 pence|
To assist users in completing the 2020-21 tax year and transitioning to tax year 2021-22, we have compiled a list of frequently asked questions below.
1. What steps do I need to complete to finalise the 2020-21 tax year?
Please click here to access our simple step-by-step guide for completing the 2020-21 year end process in BrightPay.
2. How do I issue P60s to employees?
The P60 option is located within the 'Employees' menu. Select an employee who is in active employment as at 5th April from the left-hand listing. Click 'P60' on the menu bar and simply select the P60 option you require.
3. How do I notify HMRC that the last RTI submission is my final submission for the tax year?
Within the 'RTI' menu in BrightPay 2020-21, select 'RTI > New > Employer Payment Summary'. Where you have recoverable amounts, tick this box and select 'tax month 12' or 'tax quarter 4'. Tick the 'Final Submission' indicator and click OK to generate the EPS and submit to HMRC.
4. Do I have a week 53 in the 2020-21 tax year?
Only if an employer pays employees on a Monday and the last pay date of the 2020-21 tax year is Monday 5th April 2021.
5. When will BrightPay 21-22 be available?
BrightPay 21-22 is scheduled for release week commencing 22nd March 2021.
6. Is it ok to import my data into BrightPay 2021-22 before my payroll is finished for the 2020-21 tax year?
We advise waiting until your payroll is fully completed for the current tax year before importing into the new tax year version. This will ensure the most accurate and up-to-date information is being imported from the previous tax year.
7. Why is BrightPay 2021-22 downloading as a 60-day free trial - I have already purchased a licence?
BrightPay will initially download as a 60-day free trial (with full functionality). On purchasing a 2021-22 licence, you will have received a licence key on the invoice that was emailed to you. Simply select 'Upgrade Licence' on the 'Open Company' screen of your BrightPay 2021-22 software and enter and activate your licence key here. Your software will no longer show as a free trial and instead will indicate your purchased licence type.
8. How do I install BrightPay 21-22 for the new tax year?
Every tax year we release brand new software in line with the new budgetary requirements. Thus, to move your payroll on to a new tax year, simply download the new tax year version of BrightPay that is available on our website here.
Once downloaded, this will install separately to your previous year’s software and you will see a new BrightPay icon appear on your desktop. You can still access the information for the previous tax year in BrightPay 2020-21.
9. How do I import my data from BrightPay 2020-21 into BrightPay 2021-22 for the new tax year?
First, check the location of where your 2020-21 employer data file is saved - you can do this by hovering your mouse over the employer name on your 'Open Employer' screen in BrightPay 2020-21 and making a note of the location that will appear.
Next, on the 'Open Company' screen in BrightPay 2021-22, select 'Import Employer(s) > Import BrightPay 2020-21 file(s)'. Browse to the location of your 2020-21 employer data file and double click on the file name to commence the import. Your employer and employee details will now be imported into BrightPay 2021-22 and your employer name will be added to your 2021-22 Open Company screen.
Please note: If the employer file is password protected, the password will be the same as the previous year.
10. Will tax codes L, M and N be automatically uplifted when I import my data from BrightPay 20-21 into BrightPay 2021-22?
Tax codes for L, M and N will be automatically uplifted for the new tax year in BrightPay 2021-22 when your employer file is imported from BrightPay 2020-21. Tax code L will be uplifted by 7, tax code M will be uplifted by 8 and tax code N will be uplifted by 6 in BrightPay 2021-22.
11. Do I need to send a new Employer Payment Summary to HMRC to claim the Employment Allowance?
Yes. Since 6th April 2020, Employment Allowance does not auto-renew for an employer as it did in previous tax years.
An employer now has to submit an 'Employer Payment Summary' to HMRC every tax year to notify HMRC that they will be claiming the Employment Allowance. Once this EPS is sent to HMRC, the employer can then 'enable' the Employment Allowance in the first tax period within the 'HMRC Payments' utility in BrightPay.
Please note: HMRC must also be notified via an Employer Payment Summary if you are no longer eligible for the Employment Allowance. Further guidance on operating the Employment Allowance in BrightPay is available here.
12. How do I sign into BrightPay Connect for the new tax year?
Please select the 'Connect' tab on your BrightPay 2021-22 'Open Company' screen and sign in to your BrightPay Connect account using your Connect username and password.
13. Why do I receive HMRC error 6010 when I try to submit a P11D(b) for the 2020-21 tax year?
HMRC will only accept a P11D(b) for the 2020-21 tax year from 6th April 2021. If trying to submit before this date, error number 6010 will be returned from HMRC into BrightPay. HMRC are currently accepting a P11D(b) for the tax year 2019-20 up until 5th April 2021.
In the July 2020 Plan for Jobs announced by Chancellor Rishi Sunak, an investment fund of £111 million is available to assist the largest development ever for traineeships and employers that provide a traineeship. An employer can claim a £1,000 bonus for each trainee that is enrolled under this new traineeship programme. The new project will help young people learn new skills and experience that will assist them in finding employment or an apprenticeship or equip them for further study options.
Registration for applicants for this scheme can now be made online here. The bonus of £1,000 will be available to employers to claim until 31st July 2021 and will help employers with the traineeship costs such as uniforms, travel cost and providing facilities. The maximum number of trainees an employer can claim under this programme is 10 trainees. Employers can claim this incentive of £1,000 per trainee for any trainee placement they have since 1st September 2020
The traineeship programme period will last for a period of at least 6 weeks and can be as long as 12 months. The programmes will help the trainees develop skills for the workplace such as digital skills in conjunction with English and maths skills. Traineeships will be combined with job placements for a minimum of 70 hours.
Research has shown that traineeship programmes have previously assisted nearly 120,000 young people since 2013 and two thirds of trainees either progress to employment or study further or partake in an apprenticeship within six months of completing the traineeship programme.
This scheme encourages and assists employers to help train or educate young people in conjunction with the apprenticeship scheme. Under the apprenticeship scheme employers can claim £2,000 for any new apprentice aged under 25 that is hired and £1,500 for any new apprentice aged 25 or older. This scheme will end in March 2021 and over 10,000 have already availed of this scheme.
The Low Pay Commission’s recommendations for the new National Minimum Wage were approved by Government and these new wage rates will come into effect on the 1st April 2021. The National Living Wage of £8.91 per hour will now be paid to employees aged 23 years and over instead of the previous age threshold of 25 years and older. This is an increase of 2.2% from £8.72.
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 hourly rate for the minimum wage depends on an employee's age and whether they are an apprentice:
Rates from 1 April 2021 will be:
As security is a large concern for many businesses nowadays as data breaches are a threat to all entities, Two Factor Authentication can now be enabled as a feature for users of BrightPay Connect. Two Factor Authentication is a second layer of protection to re-confirm the identity for users logging into Connect through an internet browser or through BrightPay. This improves security, protects against fraud and lowers the risk of data breaches as users can access sensitive employer and employee data in Connect with the increased security layer.
BrightPay Connect is an optional cloud add-on feature that works with BrightPay. BrightPay Connect provides a secure, automated and user-friendly way to backup and a self-service dashboard to both accountants and employers so they can access payslips, payroll reports, amounts due to HMRC, annual leave requests and employee contact details.
If Two Factor Authentication is enabled for a Connect account, when any user on the Connect account tries to sign into Connect via their internet browser here or through BrightPay, they will be asked to enter in a security code that needs to be sent to them. The user can select to have the security code to be sent by email or by text to the user.
Once the user receives the security code the user enters this in the 'verify code' field and selects 'Verify Code'. The user will only be able to access the security code if they have access to the email account or mobile device. The random generated 6 digit security code will expire after fifteen minutes so a new code will have to be sent if the code is not used in the time limit.
This Two Factor Authentication uses a second security measure of identification ensuring the user is the correct user when logging into Connect. It adds an additional layer of security to an already secure hosted platform and gives the user more reassurance that their payroll data is safer and more secure.
To Enable this option in Connect when you are logged in > Go to 'Settings' > Go to 'Two Factor Authentication' > Tick the box > 'Save Changes'.
The Kickstart Scheme was introduced by the Department for Work and Pensions for employers in September 2020. This new scheme has created over 120,000 jobs since September 2020 for employees aged between 16 and 24 years old. It is helping young people start their careers as they have been some of the people hardest hit due to economic conditions from the global pandemic.
This scheme allows an employer or group of employers to create new placements for young people and apply for funding from the scheme. The 6 month placements are open to those currently claiming Universal Credit and in danger of long term unemployment. The job placements will allow the participants to gain experience and skills that will assist them in finding employment when they have completed the scheme.
There was a condition previously that an employer had to have a minimum of 30 job placements in order to qualify under this scheme but from 3rd February this threshold will be removed and employers will be able to apply to the Kickstart Scheme without this condition. The closing date for new applicants under this scheme was 28th January, but for employers who want to partake in this scheme they can contact one of the 600 gateway organisations that have been set up such as a Local Authority or Chamber of Commerce. The Department for Work and Pensions welcomes existing gateways continuing to apply to add more employers and job placements. There is £2 billion available under this scheme and the scheme will run until December 2021.
Under the Kickstart Scheme funding for 25 hours per week for 100% of the relevant National Minimum Wage category in addition to employer National Insurance contributions and employer minimum automatic enrolment pension contributions is available per participant. Funding of £1,500 for setup, support and training costs per placement is also paid. This scheme is available to employers in England, Scotland and Wales.
The job placements must:
Every application ought to include how the employer will aid the participants grow their skills and experience.
Development options could include:
As there was no Autumn Statement or Budget from Chancellor Rishi Sunak, the financial secretary to the Treasury, Jesse Norman announced a written ministerial statement in the House of Commons with details of the increase of the National Insurance thresholds. The 2020 Autumn Spending Review confirmed that the personal tax allowance and tax basic rate threshold would increase by 0.5%. This is based on the consumer price index.
This would mean that the personal tax allowance for 2021-22 would increase by £70 from £12,500 to £12,570 and the tax basic rate threshold for 2021-22 would increase to £37,700 from £37,500.
The annual National Insurance threshold for Small Employer’ Relief remains at £45,000.
Please see some rates details below:
Statutory Adoption Pay
Statutory Maternity Pay
Statutory Paternity Pay
Statutory Shared Parental Pay
Statutory Sick Pay
The Living Wage Week took place from 9th to 15th November 2020 and as part of this week the new living wage rates details were announced. The new rates apply to employees aged 18 years of age and older from 9th November 2020, but employers who are already part of this scheme will have six months to apply the new pay rises.
The new London Real Living Wage announced by the Living Wage Foundation, has increased by 10p from £10.75 to £10.85 per hour. This helps reflect the higher cost of living facing families in the city. The UK Living Wage rate has increased by 20p from £9.30 to £9.50, an increase of 2.1%. The Government's current national minimum wage for over 25s is £8.72, which is £78p less than this rate.
It is estimated that over 250,000 employees will be affected by the new real living wage increase. An employee working 37.5 hours per week being paid the new Living Wage rate of £9.50 will earn more than £1,500 more annually compared to an employee on the current national minimum wage for over 25s. And an employee working the same hours per week in London being paid the new Living Wage rate of £10.85 will earn more than £4,000 per year compared to an employee on the national minimum wage for over 25s.
The total number of accredited Living Wage organisations is nearly at 7,000. Over 800 employers have been accredited by the Living Wage Foundation since the start of the Coronavirus pandemic. New companies that have signed up include Capital One, Tate & Lyle and All England Lawn Tennis Club.