Agents and charity payrolls Ian Whyteside, FMAAT, MCIPP, ATT - - PowerPoint PPT Presentation

Ian Whyteside, FMAAT, MCIPP, ATT Director and consultant trainer – CIPP Director – Management, Payroll & Training

• Co. Ltd.

Partner – The Lime Partnership

Agents and charity payrolls

Agents and charity payrolls

• Introduction
• CIPP
• Recent payroll changes
• Automatic enrolment – the story so far
• AE the next two years
• The rules and duties for compliant AE
• Agents and their services
• How to deliver to charities

Agents and charity payrolls

• Introduction
• Administering and managing payrolls since 1979
• Freelance trainer and consultant since 2001
• Tax and payroll partner for small practice
• Member of AAT since 1981 and CIPP since 1983
• Member of ATT since 2009
• Non-executive director on CIPP board
• Lead writer for two AAT qualifications units.

Agents and charity payrolls

• CIPP

Membership

• Policy, Advisory and UK/International fact cards

Qualifications

• In-house, Public and Online
• Level 2 to MSC

Training

• In-house and Public

Consultancy

• PQP and PAS.

Agents and charity payrolls

• Payroll: the last four years!
• 2012 brought to payroll -
• Child Maintenance Service orders
• Abolition of contracting out for DC pensions
• The commencement of Automatic enrolment

for workplace pensions.

Agents and charity payrolls

• Payroll: the last four years!
• 2013 brought to payroll -
• Real time information
• Direct earnings attachments
• Abolition of the P35
• New Scottish court order tables
• The balance of the largest employers reach

their staging date for AE.

Agents and charity payrolls

• Payroll: the last four years!
• 2014 brought to payroll -
• AE continues its implementation
• Pensions tax relief reduced
• Flexible working extended to all
• New late filing penalties.

Agents and charity payrolls

• Payroll: the last four years!
• 2015 brought to payroll -
• Shared parental leave and pay
• Abolition of employers NICs for under 21s
• AE implemented for medium sized

employers

• Re-enrolment commences for largest

employers.

Agents and charity payrolls

• Payroll: and what’s coming next!
• 2016 brings us -
• Abolition of contracting out for DB pensions
• Abolition of employers NICs for apprentices
• New National Living Wage
• Plan 2 Student loan deductions
• Tax free childcare allowance
• Closing of employer provided childcare for

new entrants.

Agents and charity payrolls

• Payroll: and what’s coming next!
• 2016 brings us (continued) -
• Abolition of the £8,500 threshold for P11Ds
• Removal of the P9D
• Simplification of travel and subsistence
• Payrolling of Benefit in kind taxation
• AE now affects the smallest of employers
• Re-enrolment continues.

Agents and charity payrolls

• Payroll: and what’s coming next!
• 2017 and beyond -
• Salary sacrifice restrictions
• New pensions tax relief models
• Post graduate study loans start to be repaid
• Will it mean a “Plan 3”?
• Is it any wonder that even accounting

practices are outsourcing their payroll services.

Agents and charity payrolls

• Automatic enrolment for pensions
• Commenced in October 2012
• Started with very largest employers
• By the summer of 2015 some 40k employers

had “staged”

• From then about 40k stage per month, rising

to 50k a month by June 2016

• Then to 60k a month from then on.

Agents and charity payrolls

• Automatic enrolment for pensions
• Mixed experiences
• Very few enforcements by TPR
• Concentrated on persistent offenders, and
• Employers who will not cooperate
• Main offence is failure to certify compliance
• So far, some re-enrollers failed to re-certify.

Agents and charity payrolls

Agents and charity payrolls

• Automatic enrolment for pensions
• TPR research shows that 70% of small and

micro employers will turn to their accountant

• r payroll provider for the necessary advice

and guidance.

• Pensions and financial advice experts claim

that employers are selecting a pension provider without carrying out proper due diligence.

Agents and charity payrolls

• Automatic enrolment for pensions
• All new employers have a staging date which

is the same as the employment start up date.

Agents and charity payrolls

• Employer duties
• Ascertain the “staging date”
• Identify all workers
• Categorise the workers
• Assess qualifying earnings
• Complete all statutory notifications
• Meet all automatic enrolment duties
• Comply with all “opt-out” and “opt-in” duties
• Submit the required declaration of compliance
• Keep all required records.

Agents and charity payrolls

• Employer duties
• Ascertain the “staging date”
• Set by TPR based on PAYE size in 2012
• Remaining employers informed in March 2015
• Agents need that staging date
• Don’t take the employers word for it
• Check it on the TPR website!

Agents and charity payrolls

• Employer duties
• Identify all workers
• Easy? – well not necessarily
• Definition goes beyond “employee”
• Could capture temps and contractors
• Needs a thorough status check to make sure
• Access to payment records?
• Agents can only go by what they are told.

Agents and charity payrolls

• Categorise the workers as Eligible, Non-

eligible and Entitled

• Eligible is over 22 years old and not reached state

pension age, working or ordinarily working in the UK, and with qualifying earnings at or exceeding the earnings trigger of £10,000 a year

• Non eligible is 16 years old or over and less than 75,

working or ordinarily working in the UK, and with qualifying earnings at or exceed the lower earnings level but below the earnings trigger of £10,000 a year, or

• 16 years old or over and under 22, working or ordinarily

working in the UK, and with qualifying earnings at or above the earnings trigger.

Agents and charity payrolls

• Categorise the workers
• Entitled is 16 years old or over and less than 75, working
• r ordinarily working in the UK, and with qualifying

earnings below the lower earnings level of £112 a week

• Qualifying earnings?
• Generally this is the value which is liable for

National Insurance Contributions

• Payable in the period!
• May be necessary to clarify this in contracts.

Agents and charity payrolls

• Employer duties
• Complete all statutory notifications
• Whatever category the worker is –
• Employer needs to tell them,
• Clearly and well before the enrolment date
• If it is at staging –
• It can be a general notice, otherwise
• It’s an individual letter.

Agents and charity payrolls

• Employer duties
• Meet all automatic enrolment duties
• Mass enrolment on staging date, and identify all

subsequent enrolment dates

• Affects staff reaching 22, increased earnings and

new starters

• Operate postponement in accordance with rules
• Inform staff what is happening and when
• Offer “opt-out” but don’t get involved in it
• Offer “opt-in” where appropriate.

Agents and charity payrolls

• Employer duties
• Comply with all “opt-out” and “opt-in” duties
• Liaise with provider over “opt-out” process
• Entrant must go to provider or other independent
• They decide if “opt-out” is successful
• Employer advised to remove them and repay
• Know “opt-in” rules
• If non-eligible entitled to employer contribution
• If entitled, not entitled to employer contribution.

Agents and charity payrolls

• Employer duties
• Upon staging
• Submit the required declaration of compliance
• Must be received within 4 months of staging
• Must contain scheme details and numbers
• Must re-declare upon re-enrolment
• Keep all required records
• Specific rules, but practically if it looks like it
• ught to be kept then it ought to be kept.

Agents and charity payrolls

• Employer duties
• Make all contributions deductions
• No requirement for deduction authority
• Law provides authority, but if employee “opt-out”

successfully then authority to deduct ceases

• Pay deductions over by 22nd of month following

month of deduction

• Pay over by 19th if not electronically
• Supply contribution report as required.

Agents and charity payrolls

• What do agents need?
• Practicing licence up to date
• Appropriate insurance/s
• Appropriate supervisor under POCA2003
• Or default supervisor (HMRC)
• Reporting officer
• Consider
• CIPPs Payroll Assurance Scheme.

Agents and charity payrolls

• Client administration
• Full terms of engagement
• Complete understanding of the service/s
• Know the client, and know them well
• Understand any unique requirements.

Agents and charity payrolls

• For automatic enrolment
• Have skills, knowledge and experience
• Licence forbids practice to provide a service

for which it does not possess the right skills

• Clarity of AE service provision
• Get trained, clients will ask and will select

provider who knows the rules.

Agents and charity payrolls

• Penalties and reviews of compliance

activity

– Fixed penalty – Escalating penalties

Size of PAYE scheme Penalty 1–4 workers £50 per day 5–49 workers £500 per day 50–249 workers £2,500 per day 250–499 workers £5,000 per day 500+ workers £10,000 per day

Agents and charity payrolls

• Penalties and reviews of compliance

activity

– Third parties – Prohibited recruitment conduct

Size of PAYE scheme Penalty 1–4 workers £1,000 5–49 workers £1,500 50–249 workers £2,500 250+ workers £5,000

Agents and charity payrolls

Agents and charity payrolls

Thank you for listening Question time