PAYE Update Workshop
Introduction 5 April 2009 – Year end What’s New 2009-10 Miscellaneous Outsourcing payroll
PAYE Update Workshop
File on-line - and claim £75 Check your stationary levels Keep up to date Important dates to remember
PAYE Update Workshop
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
PAYE Update Workshop
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
PAYE Update Workshop
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?
PAYE Update Workshop
PAYE Update Workshop
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.
PAYE Update Workshop
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
PAYE Update Workshop
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%
(Earnings above UAP up to UEL) 11.0% 12.8%
(Earnings above UEL) 1.0% 12.8%
Contracted-out Money Purchase (COMP) or COMP Stakeholder
(Earnings above (ET up to UAP) 9.4% 11.4%
(Earnings above UAP up to UEL) 11.0% 12.8%
(Earnings above UEL) 1.0% 12.8%
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%
PAYE Update Workshop
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
PAYE Update Workshop
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:
PAYE Update Workshop
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.
PAYE Update Workshop
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.
PAYE Update Workshop
Definitions of term used:
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.
PAYE Update Workshop
Definitions of term used:
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.
PAYE Update Workshop
Definitions of term used:
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
PAYE Update Workshop
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
PAYE Update Workshop
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!
PAYE Update Workshop
Doing PAYE online all year round - PENALTIES
PAYE Update Workshop
Holiday Pay Redundancy Pay National Minimum Wage Changes to Maternity Benefit NI changes for Women E-payslips
PAYE Update Workshop
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
PAYE Update Workshop
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
PAYE Update Workshop
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
PAYE Update Workshop
For women whose EWC is on or after 5 October 2009, the position is different
For employers, additional costs
Changes to maternity benefits
PAYE Update Workshop
During OML, a woman is entitled to all the benefits of her contract other than pay including:
Changes to maternity benefits
PAYE Update Workshop
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).
Changes to maternity benefits
PAYE Update Workshop
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
PAYE Update Workshop
PAYE Update Workshop
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
PAYE Update Workshop
Everyone’s talking about E-payslips
PAYE Update Workshop
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
PAYE Update Workshop
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
PAYE Update Workshop
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.
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
PAYE Update Workshop
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
PAYE Update Workshop
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
PAYE Update Workshop
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
PAYE Update Workshop
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
PAYE Update Workshop
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
PAYE Update Workshop
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
PAYE Update Workshop
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
PAYE Update Workshop
Any questions?
PAYE Update Workshop
Tim Chapman MIPP
Payroll Manager, Simpkins Edwards
Mary-Jane Campbell
Partner, Simpkins Edwards
T: 01392 211233 F: 01392 413173