The Rising Tide of Auto Enrolment

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Over the course of the next two years Auto Enrolment Pension contribution rates are rising. These changes will affect you as an employer as well as your employees.

Currently the total minimum amount is 2% of qualifying earnings, of which the minimum for the employer to pay is 1%. This means that the employee normally also pays 1%.

From 5 April 2018, these rates will increase. The new total minimum will be 5%, with the minimum employer contribution rising to 2%. From 5 April 2019, they will rise again to 8% and 3% respectively.

Of course, both the employee and the employer can chose to pay more into the scheme should they wish. For instance, if an employer wishes to contribute to his employees’ pension the whole 2% currently prescribed, the employee would not need to add anything, as the minimum amount has been reached.

If you are staging soon, or have perhaps passed your staging date, and would like any help don’t leave it too late! Our dedicated payroll team will be happy to help ease the burden.

Please note: This article is a commentary on general principles and should not be interpreted as advice for your specific situation.

Barrie Kenyon Features In This Weeks South Wales Argus

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Barrie Kenyon of Green & Co features in this weeks South Wales Argus discussing how some changes in the new tax year will effect employees as well as employers.

The new tax year has seen a raft of changes, with more legislative reform scheduled to come into effect over the next few years.

From changes in dividends, stamp duty, and national insurance (with a U-turn thrown in for good measure) the way that people are taxed is an ever-evolving landscape. However, it’s not just directors, landlords and the self-employed who have been targeted with new legislation.

To read the whole article, please click here.

National Payroll Week 2016

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Payroll staff across the country are gearing up to celebrate National Payroll Week which runs this year from 5th to 9th September.

The theme for this year’s event, ‘It pays to learn’, is aimed at encouraging payroll professionals to expand their own financial awareness as well as that of their colleagues, in an attempt to ‘educate the nation.’

Last year, payroll staff across the country opened their doors to help educate other employees on tax codes, Pay As You Earn, Salary Sacrifices and many other intricacies of the field.

The now annual event intends to highlight the importance of payroll and the impact it can have on businesses and overall to the UK economy.

To find out what your business can do to join in, visit: http://www.cipp.org.uk/en/cipp-events/national-payroll-week/

Please note: This article is a commentary on general principles and should not be interpreted as advice for your specific situation.

Newsletter Summer 2016

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With Summer fast approaching, its time for our Summer 2016 edition of the newsletter, this time featuring:

  • Highlights from the 2016 Budget
  • All change for ISAs – new tax-free ways to save
  • The rules governing holiday and pay
  • Business Round-Up
  • Web Watch
  • Reminders for your Summer Diary
  • And much more

Click here to read the full newsletter.

To Pay Or Not To Pay – The National Living Wage

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The much talked about National Living Wage (NLW) was finally introduced on 1st April this year for 25 and overs. While the National Minimum Wage (NMW) will still apply to those under 25, the NLW is a higher rate of pay of £7.20 per hour and is designed to encourage a reduced reliance on state benefits. While it may have a different name, it is still a legally required minimum, and not a choice. Any employer who is found to be paying his employees less than either the NLW or NMW will face a penalty of 200% of the underpayment from 1st April.

While we have your attention, the National Minimum Wage rates have been released for October 2016. They are:

Age 21 – 24: from £6.70 to £6.95

Age 18 – 20: from £5.30 to £5.55

Age 16 – 17: from £3.87 to £4.00

Apprentice rate: from £3.30 to £3.40

Meanwhile the National Living Wage will not change in October 2016, as this only commenced from April.

Also worth noting is that from 2017, the date for all minimum wage increases will be in April each year. This is to bring the National Minimum Wage increase in line with the National Living Wage increases.

Please note: This article is a commentary on general principles and should not be interpreted as advice for your specific situation.

Image courtesy of dan at FreeDigitalPhotos.net

Are Your Employees Eligible To Work In The UK?

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Due to the increase in workers from abroad, now is the time for employers to make sure they are making the right checks on their employees’ eligibility. With a penalty of £20,000 and up to 2 years in prison for knowingly employing an illegal worker, the stakes have never been higher.

What can you do to reduce the risk of being affected?

Every single employer should be checking every single employee, even if you think someone is British and was born in the UK. If you are just checking employees based on their skin colour, accent or even a foreign sounding name, that in itself can be classed as discrimination.

A quick answer tool has been published online to help check eligibility. The good news for you is that the checks are relatively simple, and common sense is the main tool required. Ultimately, these checks will become part of your recruitment process and will become second nature to you.

  • Make sure you are provided with original documents, not photocopies.
  • Check all the details are valid and belong to the individual concerned.
  • Make copies and keep a record of when you undertook the ‘right to work’ check.

The process you undertake within your business should be water tight and, in the event of any incidents, will help defend you if you are accused of employing an illegal worker.

So make sure that you are protecting yourself now to avoid any penalties in the future.

Please note: This article is a commentary on general principles and should not be interpreted as advice for your specific situation.

Image courtesy of renjith krishnan at FreeDigitalPhotos.net

Expansion Of Zero Rated Employer NIC’s

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Following on from the success of the abolition of Employer National Insurance for employees aged under 21, this year sees a similar scheme rolled out to apprentices.

From 6 April 2016, if you employ an apprentice who is under the age of 25, you may not have to pay Employer Class 1 NICs on their earnings up to the new Apprentice Upper Secondary Threshold of £43,000.

To qualify, your apprentice must be under the age of 25, working towards an apprenticeship in the UK, and be able to provide evidence of government funding for the apprenticeship.

Full guidance can be found on GOV.UK.

Please note: This article is a commentary on general principles and should not be interpreted as advice for your specific situation.

Image courtesy of Stuart Miles at FreeDigitalPhotos.net

 

PAYE Exemptions & Dispensations

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Under the current system, Employers have been able to apply to HMRC for a dispensation to be granted in respect of certain expenditure, for example business entertainment, travel and subsistence. Once such a dispensation is in place, the expenses no longer have to be declared on the annual return of expenses payments and benefits (form P11D). This drastically reduces the Employer’s time in collecting the information each year to complete the form. Unfortunately dispensations are being abolished with effect from 6 April 2016 and any dispensations in place at that time will no longer apply.

The new system introduces a statutory exemption for qualifying business expenses and benefits that are matched by a deduction which would otherwise be available to the employee. However, the Employer will need to have a system in place to check that only the actual expense incurred is reimbursed and that the employee would be entitled to a deduction as a business expense.  This system will be monitored by HMRC.

The new exemption can cover flat-rate payments provided these have been agreed in advance with HMRC. Any employers paying such expenses for hotel accommodation, travel and subsistence etc., should take steps to agree the flat rate paid and thus remove the necessity to report it on future P11Ds.

There is no change for non-allowable expenses – they should still be reported on the P11D and will be subject to tax and national insurance.

Should you require any further information please contact Green & Co.

Please note: This article is a commentary on general principles and should not be interpreted as advice for your specific situation.

Image courtesy of Stuart Miles at FreeDigitalPhotos.net

The Monster Of Auto Enrolment

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The government has introduced a new character to our television screens this month: Workie. The multi coloured monster is designed as the physical embodiment of workplace pensions and will be fronting a media campaign to remind businesses of their responsibilities.

Pensions Minister Baroness Altmann was personally involved in the character’s creation. While admitting is was a quirky campaign, it has a serious message. “We need everyone to know they are entitled to a workplace pension – and we need all employers to understand their legal responsibility to their staff, but also to feel more positive about engaging with workplace pensions,” she added.

Please note: This article is a commentary on general principles and should not be interpreted as advice for your specific situation.

Photograph: Department of Work and Pensions/PA

Shared Parental Leave: The Generation Game

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Under plans announced by George Osbourne, working grandparents could soon be given the legal right to take time off to help care for their grandchildren.

The current system of shared parental leave, incorporated in April, looks to be extended to include grandparents as well as the child’s mother and father.

While the leave of up to 50 weeks and up to 37 weeks of parental leave pay (currently £139.58 a week or 90% of average earnings , whichever is lower) will not be extended, the plan is to help with flexibility in the first year of a child’s life. It looks most set to benefit single mothers who until now could not share their leave entitlement with a partner, but can now do so with a parent.

The Chancellor said that grandparents play a central role in caring for younger generations. He hopes that it will allow working parents to return to work more quickly if they want to, now that they have the option of sharing their entitlement with one of their parents.

Please note: This article is a commentary on general principles and should not be interpreted as advice for your specific situation.

Image courtesy of imagerymajestic at FreeDigitalPhotos.net