From 6th April 2020 the eligibility rules for an employer claiming the Employment Allowance will change. Employers will have to check if they meet the correct criteria in order to check if they are eligible to claim the allowance. Some of the eligibility rules are as follows:
In Budget 2020 it was announced that the Employment Allowance will increase from £3,000 to £4,000 from 6th April 2020 thus helping to reduce the employers’ (secondary) Class 1 National Insurance contributions liabilities.
In the tax years before 2020-21 the Employment Allowance claim auto-renewed, as in the employer did not have to make separate claims every tax year. But this is changing from 6th April 2020 onwards. The method of claiming through the Employer Payment Summary remains the same but the employer will have to make a new claim for the Employment Allowance to HMRC each tax year.
The new legislation of The Employment Rights (Increase of Limits) Order 2020 was laid to Parliament on 3rd March 2020 and the changes will come into force on 6th April 2020.
In this legislation the maximum amount weekly pay for redundancy payment calculations will increase by £13 from £525 to £538 from 6th April. This law applies to England, Scotland and Wales.
Currently, where an ex gratia payment is made on termination of employment (on top of notice pay), the first £30,000 can be paid free of income tax and any amount above this is taxable. However, the entire payment is currently exempt from national insurance contributions. From 6 April 2020, the first £30,000 of any ex gratia termination payment (including any redundancy payment) will still be free of income tax and national insurance but any amount above this will be subject to Class 1A employer national insurance contributions.
Employees that are employed by their employer for two years or more are normally entitled to statutory redundancy payments. The age of the person can determine the monetary amount they received based on the following:
In England, Scotland and Wales the maximum an employee can be awarded for statutory redundancy is £15,750 and £16,410 in Northern Ireland. Statutory redundancy payments are capped at 20 years length of services.
In England, Scotland and Wales the maximum an employee can be awarded for compensation for unfair dismissal has increased by £2,075 to £88,519 from 6th April onwards.
An increase of £1 for the employment protection daily rate amount will apply to England, Scotland and Wales from the start of 2020-21. The new daily rate is £30.
At present there are no details of changes to the statutory maximum weekly amount or the employment protection daily rate amount for Northern Ireland. The maximum rate operating in 2019-20 was £547 per week and £29 respectively.
As of 10 March, the number of confirmed cases of coronavirus increased to 373 in the UK, with cases across Europe also surging. With the number of cases bound to escalate, it has been predicted that if the coronavirus outbreak worsens, up to a fifth of UK workers could be off sick.
With panic over coronavirus soaring, many workers are being asked to stay away from the office and do day-to-day tasks from the comfort of their home. Not going into the office is an effective way of preventing the spread of coronavirus, because it minimises the risk of you coming into contact with someone carrying the disease.
The reality is, working from home is already very popular, potential pandemic or not. Flexible working is a trend that has emerged in the last decade as more people seek that ideal work-life balance instead of work-life burnout.
Nearly a quarter of Britain’s workforce now work flexibly, that is, they work part of the week in an office and part at home, highlighting how quickly this trend is growing. Flexible working brings many work-life balance benefits as employees have more time to see their family, exercise and dedicate time to themselves. Seven in 10 of those who work flexibly say they are less stressed as a result of their working arrangement.
As well as the health benefits, it often results in happier employees. They then potentially work harder and are more productive. For employers, flexible working also helps to attract and retain talented employees. Additionally, it can result in increased loyalty and reduced office space cost.
Businesses need to carefully consider which processes and tools will make flexible work as productive and positive as possible for their employees. You need to make sure that they have essentials such as laptops, a reliable internet connection and being able to connect to systems remotely. This would have been difficult a few years ago, but thanks to the cloud, you can have everything you need at all times.
Although the payroll itself cannot be processed online with BrightPay Connect, the payroll software is still very flexible. Each BrightPay licence can be installed on up to 10 PCs where users have the option to process the payroll from 10 separate locations meaning you don’t need cloud payroll to operate and process your payroll. In addition, you can log into your BrightPay Connect account to view your payroll information at any time. You no longer need to be seated at your desk in the office to access the system - all the data you need to do your job is available on any of the 10 PC’s that the BrightPay application is installed on.
If you are not using the BrightPay Connect add-on, you can still access the payroll data file through a cloud environment to process the payroll. Again, the software itself can be installed to the local C drive of up to 10 PCs, be it a home computer or a laptop. The payroll files can be stored on a secure server or cloud environment, such as Dropbox or Google Drive, where the payroll information can be accessed from multiple computers.
With BrightPay Connect’s automatic cloud backup, payroll information is stored online and can be accessed by employers anywhere, anytime. Employers can also use BrightPay Connect to remotely manage employee’s leave, upload employee documents and send communications to employees that are working remotely.
Will 2020 be the year in which office employees working more from home becomes the norm? Although many employers have implemented a mandatory ‘work from home’ policy as a precaution against coronavirus, it could also be the turning point for many businesses to recognise just how beneficial flexible working can be.
Start 2020 with some HR goals to put you on the front foot. Make your goals achievable and easy and you won’t be one of the 80% of people whose resolutions have fallen by the wayside by February 1st! Consider how technology could help you achieve a leaner you in 2020…
Hate all those repetitive admin tasks that keep popping up over and over like manually recording your employees annual leave, amending employees’ personal details, making sure they are receiving and reading important company updates? Well, now is the time to get rid of them. Consider how an online platform could take care of those tasks and many more.
Manage your HR tasks from almost anywhere by using your Employer Dashboard to monitor your employees annual leave requests, review your payroll reports and keep an eye on your HMRC payments. As long as you have an internet enabled device, it can all be at your fingertips… anytime, anywhere!
Use online document upload features to distribute, track and manage any information you want your staff to have access to. Contracts, policies, training, schedules, you name it. You have the peace of mind of knowing your employees have that information at their fingertips and that you can see a log of when and how often they are accessing it.
GDPR and cybersecurity. The two scariest words in the English language. Free yourself from that fear with a robust online portal. Fully secure servers, individually password protected and fully GDPR compliant.
New rates for the tax year 2020/21 for Student Loan Plans 1 and 2 have been announced by the Department of Education. The Student Loan Plan 1 rate will rise to £19,390 on 6th April 2020 from £18,935. The current Plan 2 rate of £25,725 will also rise to £26,575. Earnings above the thresholds for both Plan 1 and Plan 2 for 2020/21 will be calculated as normal at 9%.
The rate of the postgraduate loan type introduced in the 2019/20 tax year of £21,000 will remain the same in 2020/21 and will continue to be calculated at 6%.
Summary of the Student Plan thresholds:
This figure will apply to all current and future borrowers for whom employers make Student
Loan deductions. In BrightPay 2020/21, the new student loan repayment thresholds for both plans will automatically be calculated and the appropriate student loan deduction applied.
The Employment Allowance was introduced on 6 th April 2014 by HMRC as an allowance to reduce businesses’ and charities employers’ national insurance liability for the tax year. The employer Class 1 National Insurance contributions (NICs) would be reduced up to the maximum of the allowance in the tax year. The allowance was introduced at £2,000 in the tax year 2014-15 but it was increased to £3,000 from 6 th April 2016 to the current tax year.
HMRC are in the process of drafting legislation to change the Employment Allowance for employers. The main change would be that to focus the Employment Allowance on small to medium businesses in the case that employers with a liability of Class 1 secondary National Insurance of £100,000 or more in the preceding tax year will not be able to claim the Employment Allowance. In order for an employer to be able to claim the Employment Allowance for the tax year, they must have space for the full Employment Allowance within their relevant de minimis state aid threshold.
HMRC intend for this legislation to come into effect from 6 th April 2020, once the regulations are published under powers in section 5 of the National Insurance Contributions Act 2014. In October 2019 a final version of the guidance will be published and made available for employers to view.
As an employer, if you provide expenses or benefits to employees or directors, you may need to tell HM Revenue and Customs (HMRC) and pay tax and National Insurance on them. The means of reporting these details to HMRC is on a P11D and P11D(b) form. The P11D is a statutory form required by HMRC from UK based employers detailing the cash equivalents of benefits and expenses that they have provided during the tax year to their directors and employees. Your P11D(b) tells HMRC how much Class 1A National Insurance you need to pay on all the expenses and benefits you’ve provided.
The deadline for reporting these details to HMRC for the tax year 2018-19 is on or before the 6th July 2019. An employer will get a penalty of £100 per 50 employees from HMRC for each month or part month the P11D(b) is filed late. The employer needs to ensure that employees employed on 5th April 2019 receive their P11D / P9D by 6th July 2019. The deadline for the employer to submit payment to HMRC for the liability for Class1A National Insurance owed on benefits or expenses is 22nd of July (or 19th July if you pay by cheque).
Examples of expenses and benefits include:
Some business expenses or benefits do not need to be reported to HMRC such as business travel, business entertainment expenses, telephone bills and uniform and tools for work.
BrightPay can produce a P11D for sending to HMRC after year end, which includes your Class 1A NICs declaration and details of the expenses and benefits provided including cash equivalents. If the P11d(b) has been already submitted to HMRC from BrightPay and amendments have to be made you must submit using a paper form.
Click here for more information.
If you have eyes and ears then you will have heard something about Brexit lately as the deadline looms ever closer. Britain is currently like a cat that waits at the door crying to be let out but once the door is open, decides it doesn’t want to leave anymore. But never mind all these bigwigs in Westminster saying how this will affect that and so on; today I want to talk about what Brexit means for the unsung heroes of HR, in particular, payroll. How will leaving the EU affect their everyday work life? Well, there are a few key areas to note:
Data Protection - I mean, obviously. This has been pretty much every payroll department’s waking nightmare for the past year since GDPR was introduced. If you have been a good little payroll bureau then you will have all your ducks in a row. But even still, once we leave the EU, it’s up to the European Commission (EC) whether it grants the UK an ‘Adequacy Decision’ to transfer data around the region as the country will no longer be an EU member. So all going to plan it should be ok. But we all know that nothing has gone to plan so far, so in the event we weren’t given an Adequacy Decision, transferring data could become administratively burdensome for employers, especially global ones who rely on data exchanges across borders.
Payment processing - Money’s great isn’t it? Especially when someone puts it conveniently into your bank account. Do you know who loves money? Payroll. It’s their whole world! And what makes it easy to move money to all its lovely employees is being a member of the Single Euro Payments Area or SEPA. This is a body made up of EU member states (and a few non-EU ones too) that streamlines the sending and receiving of payments across SEPA regions meaning that payments are processed in the same way as UK payments. Therefore, continued membership of SEPA is of paramount importance to payroll providers and something they’ll be keeping an eye on.
Employment law - Payroll is made up of tons of HR stuff like holiday pay and maternity pay etc. And where we get the rulebook on these processes is from EU directives on employment law. Although these laws have been great, freedom from EU Directives means that the British government could decide to revisit some laws and make some reforms where necessary. Or maybe not! Who knows. Britain may want to maintain their obsequious stance to the EU to make life easier but it is still an interesting point.
Anything else? How you deal with EU staff (which you can read more about here). Social security payments made in Member states could see a big shift. Along with this, payroll functions that operate across more than one country with, say, expatriate staff could be in for a wild ride. But the most startling obvious thing at the moment is that nothing is really clear at all and none of us can predict what will come out of the woodwork.
The best way to safeguard your payroll against all this uncertainty is to make sure all your HR processes are in place and your payroll software is up-to-date and ready for changes).
BrightPay Connect is an online payroll and HR tool that offers significant benefits to help your business comply with the GDPR legislation. BrightPay Connect is an add-on product to the payroll software. The main objective of BrightPay Connect is to increase the efficiency and effectiveness of payroll work within the remit of the GDPR guidelines.
Automatic Cloud Backup
Are you keeping your payroll files safe and protected? It is important to keep them protected in case of the event of fire, theft, cyber-attacks and damaged computers. BrightPay Connect is the solution. It is hosted on Microsoft Azure for ultimate performance and reliability. BrightPay Connect keeps a chronological history of all backups which can be restored at anytime.
Employee Self-Service Portal
Are you trying to find ways to improve your time-management skills? You can invite employees to their own self-service online portal which can be accessed using a smartphone app or any web browser. Employees will be able to securely access and download payslips, P60s, P45s, submit annual leave requests and view leave taken and leave remaining.
Bureau / Employer Dashboard
Are you looking for an easy and secure way to share documents? BrightPay Connect provides 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. You can also securely share resources, upload HR documents and get payroll data approval from the client electronically.
24/7 Online Access
Do you want to be in control at anytime and anywhere? BrightPay Connect allows mobile and online access at anytime of the day. This fulfils the GDPR best practice recommendation to provide remote access to a secure system where individuals have direct access to their personal payroll data.
Data Input (coming soon)
For bureaus, clients can upload or manually input their employees’ hours and payment details. This is offering an additional layer of GDPR protection. Once the hours are added/imported, information can be automatically synchronised to the employer file on the bureau’s PC, ready for processing. Bureaus can then securely send a payroll summary back to the client for approval through BrightPay Connect. This will eliminate the need to exchange emails, reduce the double entry requirement and minimise errors from manual data input.
HR & Annual Leave Management
BrightPay Connect also includes an employee calendar, which can keep record of all employees past and future leave including annual leave, unpaid leave, absence leave, sick leave and parenting leave. Employers can upload sensitive HR documents such as contracts of employment. Access can be restricted for certain users.
There is a considerable business opportunity for payroll bureaus to increase revenue while complying with the GDPR. There are significant discounts for bulk purchases.
If you are interested in BrightPay Connect, why not attend one of our free online demos!
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The Chancellor Philip Hammond announced at the Conservative Party Conference that from April 2019 large employers paying the apprenticeship levy will be able to transfer up to 25% of their apprenticeship levy funds to businesses in their supply chain.
He is reported to have said “We have heard the concerns about how the apprenticeship levy is working, so today we’ve set out a series of measures to allow firms more flexibility in how the levy is spent. But we know we may need to do more to ensure that the levy supports the development of the skilled workforce our economy needs.”
The apprenticeship levy is paid by employers and will help fund new apprenticeships in the future. This levy of 0.5% is charged on employers’ pay bills which will be based on the total employee earnings subject to Class 1 secondary NICs. The levy is payable through Pay As You Earn (PAYE) and is payable alongside Income Tax and National Insurance.
Currently, an employer paying the apprenticeship levy can transfer up to 10% of their apprenticeship service funds to one other employer. In June this year Skills Minister Anne Milton announced that from July 2018 an employer paying the apprenticeship levy can make transfers up to 10% to multiple employers. This transfer option is the first large flexibility HMRC have offered to employers to assist in making apprenticeships work better for everyone.
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