5 January 2017
The year 2016 has been a fairly strange one; the UK voted to leave the European Union, David Cameron resigned, we had our second female prime minister, many ministerial heads shuffled, the pound crashed, stock markets went up at their highest and Lynn Homer of HMRC retired! There is much to do to progress Britain into prosperity for the future…
With 30 years of payroll service development experience, times are interesting and very unusual. Much has been thrown at both the payroll industry, software and service providers impacting and expanding the knowledge and multitude of skills in ensuring the success of payroll.
With a change of government and direction the impacted public departments are covering a whole plethora of change proposals which will impact to some degree or another.
Ruth Owen of HMRC faced some questions in relation to the lateness of information from the parliamentary committee. HMRCassured that information was provided on time – the industry disagrees.
At the Annual Stakeholder Meeting (stated at the meeting by HMRC officials as the HMRC AGM), questions were raised by attendees on the knowledge drain within HMRC as a result of departmental slim down, personnel moving on or retired. Assurance were given by the HMRC heads of duty that all was well and adequately covered.
BCS (the Chartered Institute for IT), IReeN (the electronic exchange with government) and BASDA (Business Applications Software Development Association), the constituent parts of what is termed BIB have over previous years had a strong and productive consultation grouping with various government departments, but much of that appears to have shrunk with the government leads gone. The pleading from software and service development is for adequate notice of change – normally 18 months – but at least notification of technical specification for July prior to the tax year of application for significant change. For many years this has been met enabling compliant ready software to be developed, tested and delivered in time for the new tax year payrolls. However, this is now under serious threat and software developers are concerned. A number of government initiatives and obligations applying from next April are proposed, there is some technical definition of some file format fields, but little to no precise detail to enable an accurate judgement of requirements and obligations on either software, service or business operations and impact.
HMRC were heavily criticised in 2016 for the very late notification on guidance in relation to voluntary payrolling which they denied, information finally being published in February 2016 for an April 2016 tax year start. Is the same tardiness of detail being repeated? Are there serious risks to payroll service development as a result? ‘Are we nearly there yet’ with the production of any meaningful guidance? 2017/2018 is heading for a very difficult change year. Plethora of major software development groups are getting very nervous. As the chair of BCS Payroll I have made my pleas, Alex Rowson of BASDA has also made representation to HMRC to receive adequate information to enable good planning of software change. And then of course, the considerations for change in business process.
The Apprenticeship Levy, the information on the basis of allocation of the offset allowance and calculation is late. Employers are confused on the separation between levy and funding. There is much debate around devolved nations and how funding is shared between Scotland, Wales and Northern Ireland – to the extent that the Scottish Parliament consultation is critical of the non-inclusion by the London Parliament in development of the legislation. The levy is assessed on Secondary NI earnings, however, those are not reported to HMRC on the RTI FPSsubmissions, so how the allocation to devolved nations occur is confused and not based on anything the employer would expect it to be. So attempts by some employers to match levy to funding are potentially pointless – however, the funding allocated to an employer has up to 2 years to be spent. But equally, funding allocated at the start may well find itself being withdrawn if earnings on the cumulative principle end up reducing the levy overall.
Payrolling Benefits in Kind (PBiK) – although the expansion to credit vouchers is welcome (there is little to no change to accommodate – why was it not there this year?), the guidance on the new company car reporting is scant at best and different. How will either software, service or the employer business process be able to be changed in time for April 2017 with the tardy delivery of information? Although HMRC committed to having this information for software for July 2016, this target has been significantly missed. A bunch of fields on a file is not sufficient, there needs to be explicit information of what, when and why in relation to company car reporting requirements.
And then of course we have Mandatory Pay Gap Reporting from the Government Equalities Office. Indications are being hinted that the defined requirements will not be known until maybe even March next year, the definition of earnings is so wide in interpretation as being the ONS value used for the ASHE survey, so not taxable or NIable earnings then, and the timing point confused in definition from being pay in the month of April to potentially be just the pay period that includes 5th April annually. What involvement will the payroll have in creating the base data for the employer to meets its new legal obligations. Has the horse already bolted as accumulation of bonus would already need to be taking place. Are the employers (those with over 250 employees or in the public sector) considering their obligation’s and then there’s the consideration of devolved administration.
And what of the Autumn statement and the recent plethora of HMRC consultations. What will be announced about Salary Sacrifice removal and how will this impact business process in employer, their service and software, and also the PBiK operation if the employer already undertakes. Is it the end of flexible benefit schemes? If the proposals proceed as stated, then Company Car scheme will be majority impacted where there is a choice of Car or Cash.
And then the implications of Class 1A assessment on Redundancy payments, will this require change to payroll. Is there a new NI category for Class 1A (letter Y has already been taken)? Although the format of RTI report may well take the information, no notification of change has yet been given if this is impacting soon.
And then, of course, we need to await the Scottish Budget to see if the calculation of the Scottish Rate of Income Tax will drastically change. Has software been readied for the potential change in tax bands and tax rates with these new devolved powers.
Software still demises the lost of the HMRC Notes for Software Developers issued by the former Margaret Knights OBE, the trickle of information following the autumn statement all used to be provided in one concise document for process compliant development, although the SDS Team do a tremendous job, we have a position of trickle information during a time critical development stage. Will the HMRC, DWP etc. cooperate with each other so that changes to Tax, NICs, Statutory Payments etc. all be announced appropriately
This is probably the first in my 30 year history of payroll software and service delivery where so little is known with so much to do. Much of the former HMRC experience is gone, the industry through groups such as BIB are able and willing to support change, yet the discussion are not evidently taking place. The planning and appropriate, proper, meaningful consultation needs to return to its former days of exploring how these can work, else much of this government change is under serious threat of failure and especially late delivery.
So the software, service and employer plea to government on the much needed detail of the requirement is ‘are we nearly there yet’?
Requirement for government change for April 2017 is later:
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Globalisation is a word synonymous with the rise of industry. However, recently we may have heard it thrown around a boardroom alongside the other generic buzzwords, and as such something about it becomes disjointed and bereft of purpose. In reality, globalisation is a powerful force – something that should be cultivated and respected in the corporate world.18 December 2017
In this article, Simon Parsons offers updated advice for employers on how to ensure that the New Starter Checklist (formerly P46 form) is submitted correctly.28 August 2017
There have been many publications about the Good Work Plan over the past 18 months and it can be confusing to work through complex, legislative documentation to understand how you stay compliant. While the good work plan covers many topics, this blog aims to take you through one aspect of this, Holiday Pay, and asks the simple question – are you ready for the changes?29 October 2019
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How to build resilience into your new normal strategy
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In the 2015 Queens speech, the Government set out to create 3 million new apprenticeships by 2020. As part of the Enterprise Bill, apprenticeships would gain the same legal treatment of degrees. ‘The Richard Review’ brings new standards being developed by ‘trailblazers’ and new funding trialled giving employers greater control over spend on training delivery.11 April 2016
The topic of a managing global payroll systems has been voiced by many thoughts leaders in the industry. In our previous blog, Doug Sawers, Managing Director of SD Worx UK & Ireland went into detail on the matter. This week, we sat down with David Munn, Director of Global Payroll Services, where he shares his views.30 October 2017
The COVID-19 virus situation is developing rapidly and affecting us all, both personally and economically. We want to assure you that we are here for you, and that you and your employees can continue to count on our services.20 March 2020
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With the ever-increasing benefit costs for company cars for both the employee and the employer, and the new rules for Optional Remuneration Arrangements (OpRA), is a company car as cost-effective as it once was?20 December 2017
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Retention of the personal data is ‘lawful basis’ where it is necessary, for compliance with a legal obligation, for the exercise or defence of legal claims. For Payroll and HR reasons, employers must hold and retain personal information about their employees and former employees to meet these legal requirements.4 December 2017
Payroll managers still receive instruction from HR departments and solicitors that a termination payment must be taxed at Basic Rate. Why these continue to be demanded since the rules changed on payment after leaving we do not know.25 September 2017
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Payroll and HR data has the potential to unlock strategic value that has not previously been so readily available and accurate.1 July 2020
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Senior professionals predict major changes to the workforce by 2025. According to our research The Workforce of the Future, working part-time, freelance or being able to choose hours/days will be favoured over traditional working styles. Employees will expect more support and advice on financial matters, and Payroll and HR will align more closely to provide this. Payroll will become much more influential in attracting and retaining employees. As a result, 78% of professionals say that payroll needs to evolve and innovate, and technology will be key.2 September 2019
With Christmas upon us, payroll managers will be experiencing some annual adjustment planning with the holiday season. In this blog I explore some of the most common scenarios in December's pay cycle.7 December 2015
A few years ago, what was then Ernst and Young (now EY) reported in its paper Global Payroll: Myth or Reality? that 55% of multinational firms believed that single provider global payroll vendors didn’t exist.2 October 2017
In today's world, "human capital management" seems to be the hot topic of choice. A complete HCM solution covers all the people related processes and data in an organisation, and by its very nature can get pretty full on and complicated to implement, with greater upheaval and cost involved. For that reason, it is not always appropriate for an organisation to consider changing all aspects of their HCM in one fell swoop.6 June 2016
Employer representatives sitting on the Statutory Payments Consultation Group have been pleading with the various government agencies involved in Statutory Payments to make clearer what employers have to do to comply with Maternity Rights, especially in light of the extension of rights to non-cash benefits.16 October 2017
As an employee, sometimes it’s not clear what everything actually means on your payslip. To help educate the nation, we’ve created a list of some of the most common terms that can appear on your payslip, along with an associated description.14 August 2017
It’s natural to have concerns about moving your payroll operations to a managed supplier, but we’re here to put your mind at ease. We’ve got your back. Moving to our managed payroll service is not as complicated as you might think.12 June 2020
No matter the size of your business, or the type of service you provide, Criminal Corporate offence is something you should know about. Simon Parsons, Director of Compliance Strategies, explains in his blog.9 September 2020
Until recently, payroll has not been given high strategic importance and so has never needed to be particularly innovative. The modern, fast-evolving workforce is now driving significant changes to this status quo however, with both managers and employees looking to embrace disruptive technology that helps the business to innovate and transform.1 October 2019
Step back in time five years and you would struggle to move for articles and white papers on big data and analytics. These were the hottest topics in technology and the excitement surrounding them was at its peak. Last year, analyst Gartner dropped its hype cycle for Big Data, confirming in an article, entitled: The Demise of Big Data, Its Lessons and the State of Things to Come” that “we did it to move the big data discussion past hype and into practice”. Certainly when it comes to the HR arena, big data and the analytics tools that can be built on top of it are now in a maturing phase.14 November 2016
Savvy CFOs and finance leaders have spotted an opportunity to maximise ROI and increase operational resilience by outsourcing payroll operations. We explain the financial benefits in our blog.14 September 2020
‘Disruptive’ technology is technology that replaces old ways of doing things. For example, the smartphone has revolutionised the way we interact with friends,
family, institutions & media. When SD Worx launched online payslips in 1999 this was met with concern around security & access. Fast-forward
to 2018, and no credible provider is without a mobile payslip. In short the smartphone has disrupted the market and most people have moved on from
8 November 2018
The right workforce management module can help businesses stay afloat during these tough times and avoid common pitfalls.15 April 2020
Payroll is essential to your business. You can’t afford to get it wrong. Our Managed Payroll Pioneers give you the best of both worlds; market-leading payroll software delivered by exceptional payroll professionals. Why settle for anything less?12 June 2020