by siteadmin | Sep 28, 2016 | PAYE
Reminding you of the minimum wage increase because any failure to correctly pay National
Minimum Wage (NMW) or National Living Wage (NLW), even because you didn’t know about an
increase, will break the law.
From the 1st October 2016, the National Minimum Wage rates will be increasing as below:
• 21 – 24 year olds – NMW will increase from £6.70 to £6.95 per hour
• 18 – 20 year olds – NMW will increase from £5.30 to £5.55 per hour
• Over compulsory school age but not yet 18 – NMW will increase from £3.87 to £4.00 per
hour
• Apprentice rate (for apprentices under the age of 19 or 19 and over but in the first year
of apprenticeship) – NMW will increase from £3.30 to £3.40 per hour
You may have noticed that the National Living Wage is not increasing in October.
As the NLW rate for those aged 25 and over was only introduced in April 2016 the current rate of £7.20 per
hour will continue to apply until April 2017. The quoted increase from next April is £7.60 per
hour but this has not yet been confirmed.
This may appear to be more of a problem because some staff’s wages will rise in October and some will
rise in April. However, from April 2017, the NMW and NLW will align and each annual increase
will take place in April from then on. This means it is likely that the NMW will increase in both
October 2016 and April 2017.
Quickpaye will keep you up to date with future NMW and NLW increases and
when these will take effect in the future.
by siteadmin | Sep 21, 2016 | PAYE
An interesting research report has been produced for HMRC looking at the problems faced by micro employers managing PAYE in Real Time.
A micro employer is classed as a business with 9 or fewer employees.
The key findings from the report are summarised as:
- Regardless of how the micro-employers manage their payroll, PAYE management is not integrated into the ‘payroll process’. Most do not see it as an end-to-end process at all, just a set dissociated tasks.
- The main source of micro-employer error is a lack of understanding of how PAYE real time reporting obligations should be managed. PAYE is often treated separately from the function of running the payroll, and the related tax month deadlines.
- The biggest single challenge seem to be the dates (knowing what should be done and by when).
- Examples of good practice do exist, and are typically when ‘running the payroll’ and associated tasks are strictly managed, and when RTI reports and duties are integrated into the payroll process.
- The misunderstanding of RTI reporting is exacerbated by lack of checks and low prioritisation, which also contribute to errors in RTI submissions.
- Penalties can affect a change in behaviour but their impact is currently limited by the lack of understanding and explanation as to why the penalty was issued.
- There is no shortage of information to educate people about their duties but the investment required to do this can cause difficulties for those where time and/or available money is scarce.
There are two emerging considerations for HMRC:
- The first is for HMRC to focus on better rather than more support, to generate more accessible resources – such as a road map to guide one through the process, with key points highlighted, plus relevant links, and dates to be aware of.
- The second for HMRC is to introduce clarity and consistency on penalties. To include more detailed information in the penalty notice letter itself, or help micro-employers to identify the cause of error.
Comment
The report is extremely detailed, giving information and findings, but interestingly, there is one paragraph which is somewhat understated:
Mind-set, aptitude, capability and capacity all influence the approach taken by micro-employers in terms of how they run their payroll and meet their PAYE obligations.
COME TO QUICKPAYE AND WE CAN HELP YOU MANAGE ALL OF THE ABOVE FOR MINIMAL COST- CALL FOR A FREE CONSULTATION TO FIND OUT HOW!!
by siteadmin | Sep 14, 2016 | PAYE
Over half a million company car drivers face increased tax bills under a proposed crackdown on valuable perks by the Treasury.
Salary sacrifice schemes allow employees to exchange some of their taxable pay for benefits, such as company cars and phones. It cuts down the employees tax and National Insurance bill each month, and employers end up paying less National Insurance for the employee.
The proposed rules could come in to play as soon as April 2017. Under the proposed new plans, workers would be taxed on the full amount of salary sacrificed, meaning there would be little point in having a salary sacrifice scheme in place.
Only a few benefits will be excluded from the plan, notably pensions saving, childcare and cycling safety equipment.
The crackdown will also include other benefits, such as gym memberships and car parking spaces.
The Treasury said that the proposal does not prevent employers from providing benefits in kind to their employees through salary sacrifice, but it will remove the tax and NICs advantages that come from doing so.
by siteadmin | Aug 17, 2016 | PAYE
Here at Quickpaye we are always keeping up with current updates, so Michelle has done some more Auto Enrolment training this week.
We are all geared up for this and can set you up online with a pension scheme, and then run all the administration work for you in conjunction with your payroll.
This means that there will be very little or nothing for you to do, and the words AUTO ENROLMENT are no longer something to ignore or run away from!
Call us or email us now, we can help you with this! (more…)
by siteadmin | Aug 9, 2016 | PAYE
HOLIDAY PAY
Calculating Holiday pay can be an absolute minefield but you need to get it right!
Here is a simplified guide for you, but it is a complex area and if you are in any doubt then you should seek legal advice.
THE LEGAL MINIMUM
Under the Working Time Regulations 1998 (as amended), workers (including part-timers and most agency and freelance workers) have the right to:
- 5.6 weeks’ paid leave each year (from 1 April 2009)
- payment for untaken statutory leave entitlement on termination of employment
Paid public holidays can be counted as part of the statutory entitlement unless this is expressly covered in the contract.
BUILDING UP LEAVE
Under the Working Time Regulations, employers can use an accrual system to calculate how much leave a worker has built up during their first year of employment. Under such an accrual system, leave is built up monthly in advance at the rate of one twelfth of the annual entitlement.
For example, a full-time worker in the eighth month of employment would have built up 18.6 days’ leave. This calculation is based on annual entitlement of 28 days x 8/12ths = 18.6.
CARRYING OVER LEAVE
From 1 October 2007 any holiday entitlement over four weeks (20 days for a five-day week, 16 days for a four-day week etc.) may with agreement be carried over into the following leave year
Rolled-up holiday pay Employers should pay their employees at the time they take their leave. They should not use any form of ‘rolled-up pay’, where holiday pay is staggered over the rest of the year.
How is a part-time worker’s holiday entitlement calculated?
Part-time workers are entitled to the same holidays as full-time workers, calculated on a pro-rata basis. For example, an employee who works three days a week is entitled to 16.8 days’ paid holiday – their normal working week multiplied by 5.6. An employee who works four days a week is entitled to 22.4 days’ paid holiday- their normal working week multiplied by 5.6.
What leave do casual workers get?
If a member of staff works on a casual basis or very irregular hours, it is often easiest to calculate holiday entitlement that accrues as hours are worked.
The holiday entitlement of 5.6 weeks is equivalent to 12.07 per cent of hours worked over a year.
The 12.07 per cent figure is 5.6 weeks’ holiday, divided by 46.4 weeks (being 52 weeks – 5.6 weeks). The 5.6 weeks are excluded from the calculation as the worker would not be at work during those 5.6 weeks in order to accrue annual leave.
So just multiple the staff hours of a period by 12.07% and this will give you the hours of Holiday Pay which can be paid
Does leave accrue during periods of absence?
In many cases, as long as a contract exists between the employer and the worker, the statutory minimum entitlement to paid holiday will continue to accrue during periods of absence, such as ordinary and additional maternity
Maternity leave
Many employers allow women to add on all of their annual leave to the beginning or end of their maternity leave. Any arrangements should be agreed following discussion between an employer and a pregnant employee and put in writing.
A quick guide to calculating holiday entitlement
| Working Pattern |
Before 1 April 2009 |
After 1 April 2009 |
| Full-time (5 day week) |
4.8 weeks (24 days) |
5.6 weeks (28 days) |
| Part-time (4 day week) |
4.8 weeks (19.2 days) |
5.6 weeks (22.4 days) |
| Part-time (3 day week) |
4.8 weeks (14.4 days) |
5.6 weeks (16.8 days) |
| 6 day week |
4.8 weeks (28 days – the maximum statutory entitlement) |
5.6 weeks (28 days – the maximum statutory entitlement) |
| Compressed hours eg 36 hours in 4 days |
36 hours x 4.8 weeks = 172.8 hours per year |
36 hours x 5.6 weeks = 201. 6 hours per year |
| Annualised hours eg 1,600 hours at an average of 33.5 hours week |
33.5 hours x 4.8 weeks= 160.8 hours per year |
33.5 hours x 5.6 weeks = 187.6 hours per year |
| Bank Holidays |
Can be included in the 4.8 weeks leave – check your contract |
Can be included in the 5.6 weeks leave – check your contract |
I hope that this has helped you and if you have any problems with your leave and payroll, please contact us at Quickpaye for our help!
