PAYE Update Workshop Tim Chapman MIPP Payroll Manager.

PAYE Update Workshop

Tim Chapman MIPP

Payroll Manager


Introduction 5 April 2009 – Year end What’s New 2009-10 Miscellaneous Outsourcing payroll

5th April 2009 – Year End



File on-line - and claim £75 Check your stationary levels Keep up to date Important dates to remember


Manual PAYE payments due19.05.2009 Tuesday PAYE for April due

19.06.2009 Friday PAYE for May due

19.07.2009 Sunday PAYE for June due

19.08.2009 Wednesday PAYE for July due

18.09.2009 Friday PAYE for August due

19.10.2009 Monday PAYE for September due

19.11.2009 Thursday PAYE for October due

18.12.2009 Friday PAYE for November due

19.01.2010 Tuesday PAYE for December due

19.02.2010 Friday PAYE for January due

19.03.2010 Friday PAYE for February due

19.04.2010 Monday PAYE for March due


Electronic PAYE payments due22.05.2009 Friday Electronic PAYE for April due

20.06.2009 Saturday Electronic PAYE for May due

22.07.2009 Wednesday Electronic PAYE for June due

21.08.2009 Friday Electronic PAYE for July due

22.09.2009 Tuesday Electronic PAYE for August due

22.10.2009 Thursday Electronic PAYE for September due

20.11.2009 Friday Electronic PAYE for October due

22.12.2009 Tuesday Electronic PAYE for November due

22.01.2010 Friday Electronic PAYE for December due

22.02.2010 Monday Electronic PAYE for January due

22.03.2010 Monday Electronic PAYE for February due

22.04.2010 Thursday Electronic PAYE for March due


Important Inland Revenue dates19.04.2009 Sunday IR Will levy interest on O/S PAYE 2008/2009

19.05.2009 Tuesday P14 and P35 year end to Inland Revenue

31.05.2009 Sunday P60 to employees

06.07.2009 Monday Copy P9D P11D to employees

06.07.2009 Monday P11D(b) P9D P11D to Inland Revenue

19.07.2009 Sunday Payment of Class 1A NIC due

02.08.2009 Sunday P46(car) submission due 1st quarter

02.11.2009 Monday P46(car) submission due 2nd quarter

01.02.2010 Monday P46(car) submission due 3rd quarter

30.04.2010 Friday P46(car) submission due 4th quarter

19.04.2010 Monday IR Will levy interest on O/S PAYE 2009/10

Personal allowances for tax NIC thresholds SSP/SMP/SAP/SPP rates NIC/LEL/ET/UAP/UEL Doing PAYE on-line New P45

What’s new for 2009/2010?



Income Tax£ per year (unless stated) 2008-09 Change 2009-10

Income tax personal and age-related allowances

Personal allowance (age under 65) £6,035 + £440 £6,475

Personal allowance (age 65-74) £9,030 + £460 £9,490

Personal allowance (age 75 and over) £9,180 + £460 £9,640

Married couple's allowance* (aged less than 75 and born before 6th April 1935) £6,535 + £330 £6,865

Married couple's allowance* (age 75 and over) £6,625 + £340 £6,965

Married couple's allowance* - minimum amount £2,540 + £130 £2,670

Income limit for age-related allowances £21,800 + £1,100 £22,900

Blind person's allowance £1,800 + £90 £1,890

Pension scheme allowances

Annual allowance £235,000 + £10,000 £245,000

Lifetime allowance £1,650,000 + £100,000 £1,750,000

*Married couple's allowance is given at the rate of 10 percent.


NI rates and earning limits from 6 April 2009

LowerEarnings

LimitEarningsThreshold

UpperAccrual

Point

UpperEarnings

Limit

Weekly £95 £110 £770 £844

Monthly £412 £476 £3,337 £3,656

Yearly £4,940 £5,715 £40,040 £43,875

Earnings Limits


Employee Employer

Not contracted-out

(Earnings above ET up to UAP) 11.0% 12.8%

(Earnings above UAP up to UEL) 11.0% 12.8%

(Earnings above UEL) 1.0% 12.8%

Contracted-out Salary Related (COSR)

(Earnings above ET up to UAP) 9.4% 9.1%



Contracted-out Money Purchase (COMP) or COMP Stakeholder

(Earnings above (ET up to UAP) 9.4% 11.4%



The Contracted-out Rebates will remain unchanged from 6 April 2009

Contracted-out Salary Related (COSR) Employer 3.7%

Employee 1.6%

Contracted-out Money Purchase (COMP) Employer 1.4%

(includes COMP Stakeholder schemes) Employee 1.6%


SSP daily rates table for days of sickness from 6 April 2009 to 5 April 2010

* Un-rounded daily rates

No of QDsin week No of days to pay

1 2 3 4 5 6 7

£ £ £ £ £ £ £ £

11.3071 7 11.31 22.62 33.93 45.23 56.54 67.85 79.15

13.1916 6 13.20 26.39 39.58 52.77 65.96 79.15

15.8300 5 15.83 31.66 47.49 63.32 79.15

19.7875 4 19.79 39.58 59.37 79.15

26.3833 3 26.39 52.77 79.15

39.5750 2 39.58 79.15

79.1500 1 79.15

*Un-rounded daily rate are shown for employers with computerised payroll systems.

SSP


First six weeks of payment – the earnings-related rate, which is 90 percent of the employee’s Average Weekly Earnings

Remaining weeks – the lesser of the standard rate which is £123.06 a week or the earnings-related rate, which is 90 percent of the employee’s Average Weekly Earnings

SMPThe amount of SMP paid to an employee for payment weeks starting on or after Sunday 5 April 2009 is:


For the 2009-10 tax year a ‘small employer’ is an employer who paid (or was liable to pay) total gross Class 1 NICs of £45,000 or less in the individual employee’s qualifying tax year.

These are the same thresholds as last year.

Lower Earnings Limit (LEL) is currently £90 per week and is the point at which the earnings count for benefit purposes. Those who earn below the LEL do not build up any contributory benefits.


Definitions of term used:

Earnings Threshold (ET) is currently £105 per week and is the point above which employees begin to pay Class 1 NICs. Although no Class 1 NICs are payable at or below the ET, those which earn between the LEL and ET are deemed to have paid Class 1 NICs for contributory benefit purposes.



Upper Earnings Limit (UEL) is currently £770 per week and is the point at which primary Class 1 NICs cease to count for benefit purposes.



Upper Accrual Point (UAP) prior to the introduction of the UAP, the upper earnings limit was the end point for state pension accruals. The UAP will now be the upper limit of accruals.



From 6 April 2009, if you have 50 or more employees you must send employee starter and leaver information and similar pension information online

Under government proposals, all employers, regardless of how many employees you have, must send this information online from 6 April 2011


Doing PAYE online all year round

The details you must send online are:

P45 (Part 1) – Details of employee leaving P45 (Part 3) – New employee details P46 – Employee without a form P45 Year End P35/P14


Doing PAYE online all year round

From April 2009, there will be penalties for sending in-year forms on paper when they should be sent online

For the first three quarters of the 2009-10 tax year, you will be written to you if you have sent paper forms when you should have filed online, reminding you of the new requirements and offering guidance and support

If you send any paper forms during the fourth quarter (or later), you will be charged a penalty!


Doing PAYE online all year round - PENALTIES


Holiday Pay Redundancy Pay National Minimum Wage Changes to Maternity Benefit NI changes for Women E-payslips


Holiday PayWorking 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 hourseg 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 hourseg 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

Redundancy


Length of continuous employment Age Weekly pay, up to a legal limit

(£350 from 1 February 2009)

The first £30,000 of any termination payment is tax-free

The total amount for redundancy is based on:

Redundancy


Amount paid: Half a week’s pay for each complete year

of continuous service below the age of 22 Full week’s pay for each complete year of

continuous service between the ages of 22 and 40

Week and a half’s pay for each complete year of continuous service above the age of 41

£5.73 per hour for workers aged 22 and older

A development rate of £4.77 per hour for workers aged 18-21 inclusive

£3.53 per hour for all workers under the age of 18, who are no longer of compulsory school age

National Minimum Wage


For women whose EWC is on or after 5 October 2009, the position is different

For employers, additional costs

Changes to maternity benefits


During OML, a woman is entitled to all the benefits of her contract other than pay including:



Accruing statutory and occupational holidays Keeping her company car Enjoys any benefits such as medical insurance

For women whose EWC is before 5 October 2008, there is no right to carry forward access to these benefits in to their Additional Maternity Leave (AML).



For women whose EWC is on or after 5 October 2009 however, the position is different.

They are entitled to continue to enjoy those benefits they had access to during their OML during their (AML), so they retain their company cars, access to medical insurance etc. However, every employee’s entitlement will depend upon her terms and conditions.

For employers there may well be an on-cost in the extension of these benefits, especially if any of them involve salary sacrifice schemes.

If an employer has entered a salary sacrifice arrangement to provide non-cash benefits to an employee, the employer must understand that they have no entitlement of operating the salary sacrifice against any statutory payments (SSP, SMP, SPP, SAP and APL).Salary sacrifice only applies to contractual payment amounts under the terms of the contract of employment.However, the employee is entitled to continue to receive the contractual non-cash benefit in kind during maternity, paternity and adoption leave without any actual salary sacrifice being applied and at the expense of the employer.

Parental leave considerations



Many women seem unaware of the changes to their State Retirement Age (SRA).

For those born between April 1950 and April 1955, the SRA increased from 60 - 65 between 2010 and 2020.

This could seriously affect retirement plans.

NI Changes for women

Everyone’s talking about e-payslips Which on-line approach to take The employee benefits

E-payslips


Everyone’s talking about E-payslips


Electronic version of the paper payslip Accessible online whenever an employee

needs them Some say, e-payslips will completely

replace the paper product and reduce Payroll print and distribution costs significantly

Which online approach to take


Who are you planning to offer it to? Would it be appropriate for all employees?

What do you want to offer? Is it just payslips or will you want to provide more HP options such as absence management

Where will you host the service? A secure platform will be needed to protect employee data

When will you move to e-payslips? Would you change completely or still offer a mixture of online and paper based payroll information

The employee benefits


E-payslips certainly have advantages from an employees perspective, offering instant 24 hour access to their latest payslip information and a central point to find payslips when copies are required for mortgages, bank loans etc.

Why outsource payroll?

Outsourcing Payroll


Cost – Big businesses can afford to maintain big payroll departments. For small businesses however, an in-house payroll service is a money burner. If your business has fewer than 20 employees, there’s a very good chance that you can save money by outsourcing your payroll operations.

Outsourcing Payroll


Productivity – Payroll management is a time-consuming activity. With this burden removed, your employees can focus on doing more productive things, and you may even be able to trim your staff’s size.

Outsourcing Payroll


Accuracy – Payroll mistakes can be painful, angering employees and – more ominously – the government. A good payroll-services provider is far less likely to make serious error than your in-house staff.

Outsourcing Payroll


Reliability – In-house payroll activities function as reliably as the people doing the work. With a payroll service, output speed and quality won’t vary in accordance with holidays and illness.

Outsourcing Payroll


Speed – Since payroll-services providers are specialists, they can process even the most complex payrolls at lightning-fast speed. The can also accommodate a temporary influx of seasonal workers without acquiring new systems that will remain dormant the rest of the year.

Outsourcing Payroll


Insight

Accountability – If payslips are delayed or paperwork is mishandled, it’s the payroll-services provider’s responsibility to fix things.

Flexibility – Repetitive payroll work can act like an anchor on your business. Your staff will be free to focus on other work.

Outsourcing Payroll


Security – Do you have the time and energy to closely supervise your business’s payroll for time and rate abuses and other shady activities? Most payroll services firms have technologies that can spot and alert clients to various types of payroll fraud, such as payment manipulation and ‘phantom workers’.

Outsourcing Payroll


Worry – There’s a lot to be said for the peace of mind that outsourcing payroll services can bring to a business owner or manager.

No headaches, no hassles : You’re left to focus on running a profitable business.

Outsourcing Payroll


Any questions?


Tim Chapman MIPP

Payroll Manager, Simpkins Edwards

[email protected]

Mary-Jane Campbell

Partner, Simpkins Edwards

[email protected]

T: 01392 211233 F: 01392 413173

PAYE Update Workshop Tim Chapman MIPP Payroll Manager.

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Transcript of PAYE Update Workshop Tim Chapman MIPP Payroll Manager.