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We had a fantastic start to June! I’m very proud to say that the Auto-Enrolment Bureau won ‘Business of the Year’ at the 2017 Gloucestershire Women of the Year Awards. We were up against some amazing local companies, so it was a genuine surprise and a real honour to win this award. Many congratulations to all of the award winners and finalists – all women with amazing businesses.
My journey from the company’s inception in 2013 up to now has been hugely enjoyable and I’ve loved every minute. Setting up your own business equates to throwing yourself in at the commercial deep end - the challenges and demands of your business will take you well and truly out of your comfort zone but, ultimately, this gives you a huge amount of confidence in all aspects of life that perhaps you didn’t have before.
Having worked for a local actuarial and pension consultancy for nearly 20 years, I was more than ready for a change. The more I learned about workplace pensions, the more I realised that small businesses would struggle to become the pension experts that the Government expected them to be, and they might appreciate a little help.
So the Auto-Enrolment Bureau was created, and our first job was to service a handful of payrolls from a local accountancy practice. The payroll bureau has since become the backbone of the business, and we have some wonderfully appreciative and loyal clients who have been with us from the start. We employed our first payroll manager very early on so that I could focus on developing the pension side of the business, and then later on we needed further support on the pension side. Employing the right staff has been key to the success of the business.
I found that I loved networking, and this was a great way to spread the word about workplace pensions. The referral network we’ve created across Gloucestershire and the UK provides us with the vast majority of our clients today – there’s nothing like a positive introduction from someone who knows both parties.
Since 2013 we’ve helped hundreds of businesses across Gloucestershire and the UK to choose and set up their workplace pensions. For some of our clients, the ongoing pensions administration through payroll was too much for them, and so they’ve passed their payroll work to us too. Pensions and payroll now go hand in hand, so our knowledge of both has been of huge benefit on the payroll side.
Looking forwards, the workplace pension ‘capacity crunch’ will slow down later this year, although new businesses will still need help and advice, and in readiness for this we’re focusing a little more on our payroll and ongoing pension support services. We’re very proud of our payroll track record and our aim is to be the most proactive and tech smart payroll bureau in Gloucestershire!
If you’re currently running your payroll in-house but have decided to outsource, or you’re thinking of changing your payroll administrator, how can you identify a good payroll provider? Payroll is too important to chop and change too often, and of course you want to move to something better than you’ve already got!
There are some key areas you can consider before making your move, over and above just the cost. Receiving a good service is top of most people’s wish list, but how do you define a good service, or even a great service?
A good payroll bureau will have experienced staff, who you can speak to at any time of the day with your queries. They should have sufficient knowledge to be able to answer your questions about statutory pay issues, notice and holiday pay, tax and national insurance issues. A great payroll bureau will be proactive in keeping you informed about important changes, such as how to payroll benefits in kind and reminding you about national living wage changes if you pay staff minimum wages, and they will have extensive knowledge about workplace pensions.
A good payroll bureau will input the wage information you give them correctly, but a great payroll bureau will look at what’s in front of them and question it if looks odd or unexpected, because you don’t always get things right. A great payroll bureau will turn your payroll around the same day if they can.
A good payroll bureau will provide you with their standard suite of payroll reports and they will offer you e-Payslips, which are payslips that your staff can access online. A great payroll bureau will be able to produce bespoke reports in whatever format you want them in, including reports to your company year end for your accountant.
Technology comes into its own if you have a larger or more complicated payroll. A good payroll bureau will ask you to send in a wage collection spreadsheet each month and will input the figures manually. A great payroll bureau will vet the complex data each month and when they’re happy with it they’ll covert it into an import file that can be directly uploaded onto their software, reducing the risk of manual input.
All payroll bureaux should be aware of Data Protection issues and must ensure that payroll reports sent to you are securely password protected.
I’m proud to say that the Auto-Enrolment Bureau is a great payroll provider, and our aim in life is to make payroll easy for you, so please do get in touch if you’d like to make a change for the better!
The UK’s Statutory Maternity Pay policy has been under fire from the TUC recently, saying the UK underpays maternity leavers in terms of weekly pay, but if you look at the SMP package as a whole, the UK offers much more than most other countries in Europe, and far in excess of the EU directive.
So what do we offer in terms of SMP?
In terms of leave entitlement, eligible employees can take up to 52 weeks’ maternity leave. The first 26 weeks of this leave is known as ‘Ordinary Maternity Leave’, the last 26 weeks as ‘Additional Maternity Leave’. The earliest that leave can be taken is 11 weeks before the expected week of childbirth, unless the baby is born early, and employees must take at least 2 weeks after the birth (or 4 weeks if they’re a factory worker).
Then in terms of pay, SMP for eligible employees can be paid for up to 39 weeks. For the first 6 weeks pay is based upon 90% of their average weekly earnings (AWE) before tax, and the remaining 33 weeks is paid at £140.98 per week, or 90% of their AWE (whichever is lower). To calculate AWE, you need to take an average of the employee’s gross earnings over a period of eight weeks up to and including the last payday before the end of the employee’s qualifying week. The qualifying week is the 15th week before the week the baby is due.
Tax and National Insurance need to be deducted from their pay as usual. As a small employer, you can claim back 103% of the maternity pay, or as a large employer who pays more than £45,000 a year in Class 1 NI, you can claim back 92% of the SMP paid.
Not everyone is eligible for SMP – there are some qualifying criteria. Your employee must have been on the payroll in the 15th week before the expected week of childbirth, they must have given you the correct notice and have worked for you continuously for at least 26 weeks up to the first day in the qualifying 15th week. Finally, they must earn at least £113 a week in the 8 week period over which AWE are calculated.
In terms of notice, an employee must tell their employer that they are expecting a baby at least 15 weeks before the baby is due. The employee should also confirm what date they want their maternity leave to start – this can be moved but the employee should give 28 days notice before leave starts. The employer should then confirm their Statutory Maternity Leave start and end dates and the SMP due, in writing, within 28 days of notice being given. Employees can change their return to work date if they give 8 weeks’ notice.
If the employee isn’t eligible for SMP, then you must give them a Form SMP1 and explain why they are not eligible.
SMP and pension contributions can be a tricky one because your payroll software might not work out the correct employer pension contributions, so you might need to over-ride the software! Under employment law, an employer should continue to pay the same employer contributions that they were paying prior to employee going on maternity leave, so contributions must continue at their current level, even though the employee’s income has dropped, but the employee will pay contributions based upon the SMP she’s actually receiving, so her actual income.
However, once SMP stops after 39 weeks and the employee is not receiving any pay at all, both employee and employer contributions can stop (although they don’t have to). The employee will remain an active member of the pension scheme, however, because contributions are just suspended. Once the employee returns to work and pay recommences, pension contributions will start once again.
If you currently run your own payroll in house, or if you’re an accountant or book-keeper who would like to outsource your payrolls to a professional payroll and pensions bureau so that you can focus on your core business, then we would love to help – please do get in touch on 0800 160 1233 or email firstname.lastname@example.org.
The new tax year is coming up very soon, so today I wanted to highlight the changes that employers need to know about which will apply from 6th April 2017.
We’ll start with an easy one: the Personal Tax Allowance is increasing from £11,000 to £11,500 a year, so if you’re a director paying yourself just under the tax threshold then you can increase your pay to £958 a month from April. If you pay yourself just under the National Insurance threshold then your pay can increase up to £680 per month.
The Apprenticeship Levy starts this year. This levy is being introduced to help young people get into apprenticeship schemes. The new levy will only apply to companies that have a wage bill of over £3 million per annum, and the levy will be based upon 0.5% of your wage bill, although there will be an allowance of £15,000 for all employers, which means the levy will actually be 0.5% of your wage bill less £15,000.
New gender pay gap regulations are coming into force, and companies employing more than 250 people must publish the details of their gender pay gap by April 2018 using data from the 2016/17 tax year. The report will need to include median and mean information relating to employee pay and bonus pay, together with details of the number of men and women in each quartile of the organisation’s pay distribution. I’m sure the results will make interesting reading!
Benefits in Kind can now be payrolled, including company cars, so instead of completing individual P11Ds for each benefit in kind, they can be put through the payroll instead and taxed accordingly each month. A P11d(b) form must still be submitted to HMRC though – this will report the total Class 1A NI contributions due on benefits in kind. If you want to start payrolling your benefits in kind then you must declare this online to HMRC before 6th April and provide the relevant information to your payroll administrator, otherwise you’ll need to wait until next year.
From April 2018 it will be compulsory to put Benefits in Kind through the payroll, and you must apply to HMRC to do this before 6th April 2018, so it’s probably worth starting a year early and getting used to the process before next year.
The National Living Wage for those aged 25 and over is increasing to £7.50 per hour, and the National Minimum Wage will increase from April 2017 as follows:
£6.95 to £7.05 per hour for those aged 21-24
£5.55 to £5.60 per hour for those aged 18-20
£4.00 to £4.05 per hour for those aged 16-17
£3.40 to £3.50 per hour for apprentices aged under 19, or over 19 but in their first year of apprenticeship. Apprentices in their 2nd or 3rd year must be paid at the rate applicable for their age.
If any of your employees are on, or close to, the current minimum wage, you’ll need to increase their hourly rate from 1 April 2017. If April’s payroll run includes hours worked in both March and April then you’ll need to record hours worked at each rate.
Statutory payments are also increasing this year. Statutory Sick Pay is increasing to £89.35 per week and Statutory Maternity Pay is going up to £140.98 per week.
If we’re already running your payroll then we will already have been in touch with you about these changes because we’re proactive in ensuring that our clients pay the right wages to their staff, so you don’t have to worry. If you would like to outsource your payroll to our proactive team of payroll professionals, please get in touch on 0800 160 1233!
We do seem to have become the ‘go to’ company for companies that have missed their staging date, so I thought it would be useful to run through a recent case study, just I case you’ve missed yours…
A client, let’s call him Tom, called us a couple of weeks ago and confessed that his staging date was 1st August 2016, and he’d done nothing so far. He’d contacted a couple of other workplace pension companies but they weren’t interested in helping him because he’d missed his staging date, so he was quite relieved when we said of course we can help.
The first thing we advised Tom to do was call The Pensions Regulator to explain that he had missed his staging date but he was working with us to get his scheme set up in the next few days and put things right. Doing this will actually reduce the chance of a fine.
Secondly, we needed to obtain payroll reports from Tom showing his employees’ gross earnings since 1st August last year. His payroll lady emailed the reports over to us the next day and we calculated the backdated employer and employee contributions from last August until the most recent payroll run. We confirmed to Tom that he would be liable to pay all of these backdated contributions, rather than asking employees to pay theirs, but as he only had a couple employees the backdated contributions came to about £150.
We advised Tom about tax relief, postponement and the most cost effective pensionable salary and contribution combination for his business and we set up his scheme with NEST within 3 days of his initial contact with us. We also spoke to his payroll lady and gave her everything she needed to set the scheme up correctly on her payroll software, and we checked the first set of contributions calculated, just to make sure.
Tom needed to be responsible for uploading weekly pension contributions onto the NEST portal because his payroll lady wouldn’t do this for him, so we did the first contribution upload for him to save time, and then we provided him with training so that he could do this himself going forwards. We gave Tom guidance on completing his Declaration of Compliance and made sure he did this as soon as his scheme was in place.
So within a matter of days, and very little drama, Tom was compliant and up and running with his pension arrangements.
So if you need help with setting up your workplace pension please get in touch. If you’ve found this article useful please like our Fb page @autoenrolmentbureau and follow us on twitter @aebureau.
During the spot checks the Regulator will investigate any non-compliance, help employers get back on track or take enforcement action where necessary. The Regulator has made it clear that deliberate non compliance won’t be tolerated.
So if the Regulator comes calling, what can you do to ensure you’ve complied? Here are a few quick pointers:-
If you’re worried about compliance and want to get it right, please get in touch, and if you’ve found this video useful please like our Facebook page and follow us on Twitter.
Setting up your own business is a hugely exciting prospect. It gives you the opportunity to do something that you really love, you can share your knowledge and experience with others, and of course you can be your own boss!
Having a business plan is important, and part of this plan might be that you’ll be taking on employees, either immediately or at some point in the future. So in terms of payroll and pensions, what do you need to think about when you take on your first employee?
First of all, you’ll need to set up a PAYE scheme with HMRC so that you can calculate and pay your employee’s wages and report the pay, tax and national insurance due for each employee to HMRC. You can set up your PAYE scheme online on the .GOV.UK website.
Then you’ll need to appoint a payroll administrator, or you’ll need to buy some payroll software and learn how to use it – get up to speed with the law around minimum pay requirements, tax calculations and statutory pay. To keep your costs down I would recommend that you run monthly payrolls rather than weekly.
There’s an additional cost to the employer over and above the employee’s salary which you might not be aware of, and that’s the employer’s national insurance (NI) contributions, which are 13.8% of an employee’s pay over and above the current NI threshold of just over £8,000.
You’ll need to tell HMRC about the tax and national insurance due to HMRC each pay period by sending a Full Payment Submission on or before pay day, and then paying the amount due to HMRC by the 19th of the following month.
Turning to your pension responsibilities, if you’re paying your employee more than auto-enrolment trigger of £10,000 a year, then you’ll need to set up a workplace pension for them. If you started paying your staff between 1st October 2016 and 30th June 2017 then your deadline for setting up a pension scheme will be 1st January 2018, or if you starting paying staff between 1st July and 30th September 2018 then your staging date will be 1st February 2018. It’s important to note that after 30th September 2017, the ‘phasing in’ of staging dates has finished, and if you start paying staff from September 2017 onwards, then you’ll need to set up a scheme straight away, within 6 weeks of paying your first employee, which is an extremely tight deadline.
It’s a good idea to get advice when you’re setting up your business so that you know exactly what you need to do by law. We can set up your PAYE scheme for you and run your payroll, and if you need a pension scheme then we can also help you with this when the time comes. So do get in touch if you need help – call Sarah or Adele on 0800 160 1233, or fill in your details on our Get Started page and we’ll get back to you.
You actually have a couple of options – either do some fairly extensive research yourself and set up your own scheme with an online DIY solution - you’ll need to choose your scheme very carefully - or you can ask a specialist like us to do the job for you. If you don’t know anything about pensions it’s really difficult to know which route to go down, so I thought I’d just outline very briefly what you’d need to do if you do decide to DIY.
First of all you need to choose your scheme – there are well over 100 pension providers to choose from. Make sure you choose a scheme that’s approved by The Pensions Regulator or the FCA, and if you’re choosing a master trust then make sure it meets the Master Trust Assurance Framework set out by the Regulator, otherwise it could encounter serious problems when the Pensions Bill comes into force this year.
Compare scheme costs – employee charges, employer charges, contribution charges and administration charges. These can be quite hard to pin down as providers don’t always make them obvious on their website, but there will definitely be costs involved. Make sure you’re clear on what the costs are to you and your employees before you choose your scheme.
Look at investment performance and compare performance of each scheme over the last 3 years – has investment growth been slow and steady, or more risky and erratic?
You’ll need to design your scheme in terms of tax relief basis for employee contributions, postponement policy, salary and contribution combinations (which directly affect the contribution rates you’ll need to pay) and auto-enrolment pay reference periods. You’ll also need to make sure that your pension scheme integrates smoothly with your payroll software. Designing your scheme properly at the outset will save your business an awful lot of money in the long run.
It’s a good idea to provide your employees with clear and comprehensive communications about the benefits of your chosen pension provider so that they understand the value of the pension scheme you’re providing, and you’ll need to update your employment contracts and, if you have them, your staff handbooks.
It’s really important that you understand the processes behind auto-enrolment so that you know exactly who is responsible for each process. For example, who will be carrying out employee assessments each pay period, who calculates employer and employee contributions, who is responsible for producing and issuing statutory employee letters, who will be uploading a contribution file to your pension provider each week or month and who is going to deal with opt-ins, opt-outs and contribution refunds. You payroll administrator may offer to carry out these tasks on your behalf, but they may only choose to do some of this administration, in which case you need to pick up the rest.
One of the most critical things to get right is to provide your payroll administrator with clear instructions about how to administer your scheme through their payroll software. They will need to know how you’ve designed your scheme and who you’ve chosen.
If you don’t have the time to do all of this yourself, we can do it for you! We’re qualified workplace pension specialists and we’ll make sure you get it right first time. We charge a one-off fixed fee which is dependent upon the size of your business, and we’re happy to continue answering any questions you may have for the foreseeable future too, at no extra cost.
If you’d like to take the pressure off yourself and appoint a trusted, specialist company to help you instead, please give me or Adele Webb a call on 0800 160 1233, or fill in your details on our Get Started page and we’ll get back to you.
Workplace pensions – there’s no need to miss your staging date…!
Recent research by Aviva has shown that one in seven companies who set up pensions with Aviva in the last quarter of 2016 actually missed their deadline, or Staging Date, for setting up a workplace pension. By my calculations, that means on average around 15% of businesses aren’t complying with their legal duties on time and are very likely to receive a fine from The Pensions Regulator. This is just money down the drain for a small business, and so easy to avoid if confronted early on.
The Pensions Regulator is sensibly recommending that companies set up their schemes around 6 months in advance of their deadline, which is good advice, because 2017 is by far the busiest year for pension providers, with 750,000 companies being allocated a staging date. Some providers may have a long waiting list this year, and any delays in setting up your scheme may lead to a failure in meeting your deadline and a subsequent fine – no excuses.
I suspect that companies are leaving their workplace pensions on the ‘to-do’ pile until the last minute, and then they find that choosing and setting up their scheme, if done properly with thought and consideration for a good employee outcome, takes a lot longer than they thought.
But this doesn’t surprise me – I’m a small business owner myself – and I can certainly sympathise. Small businesses are often stretched to capacity, and it’s likely that the responsibility for workplace pensions will fall on the director or business owner, who tends to be the busiest of the bunch! This is where professional advisers come into their own, because they’ve done all of the research beforehand, and if they specialise in workplace pensions then their knowledge and experience will be a great timesaver.
So what if you do miss your staging date? Well, it’s a legal deadline, there’s no getting around it, so there are repercussions for your business. If you’re within 6 weeks of your staging date then you should issue statutory postponement letters straight away, set up your scheme and enrol your employees within 3 months of staging.
If your staging date was more than 6 weeks ago then you can’t apply postponement and things get a bit more complicated. You’ll need to set up your scheme straight away and work out the contributions that should have been paid into the scheme since your staging date, and it’s likely that the company will also have to pay the backdated employee contributions too.
Towards the end of last year The Pensions Regulator confirmed that there had been a staggering rise in penalties for small businesses for non compliance, with more that 20 times more businesses getting an escalating penalty notice than in earlier quarters. An escalating penalty notice imposes a daily fine of between £500 and £10,000 a day, so best to be avoided!
If you’re getting close to your staging date and haven’t had time to sort out your workplace pension, we can turn things round quickly and easily, taking the pressure off you. We’re here to make sure that you choose a quality scheme and we’ll help you to design your scheme to keep costs and administration to a minimum.
If you need help, please call Sarah or Adele on 0800 160 1233 or fill in the Get Started page on our website and we’ll get back to you straight away.
By law, an employer must keep specific records about their pension scheme and also about how their staff have been affected by auto-enrolment each pay period.
In terms of the pension scheme records, you need to keep a record of the pension provider’s name and address, their pension registration number and your employer scheme reference number. It’s also a really good idea to make a note of how you’ve designed your scheme on the same document – so your tax relief basis, your postponement policy, the employee and employer contribution rates (both now and in the future) and the pensionable salary you’ve selected. Chances are, this time next year you’ll have forgotten what you’ve set up and you’ll have nothing to refer to. If you change payroll providers, for example, they will need to know all of this detail.
And then in terms of record keeping for your staff, you need to ask your payroll administrator to produce a comprehensive auto-enrolment report as part of your standard monthly or weekly payroll reports. This report should cover key data, such as the assessment date for each employee, the postponement end date, the employees enrolment date or opt in date, and an opt out date if they’ve opted out of the scheme. Then there’s the pensionable salary used to calculate the contributions, the contribution rates, the amounts deducted from employees’ pay, and the contribution due from the employer.
You need to keep these reports, by law, for a minimum of 6 years, so do keep them safe. I think record keeping is crucial in case a former employee questions why they didn’t have a pension scheme with you, or they question their contributions – you can look at these reports and establish that the employee wasn’t eligible, or they were enrolled and opted out on a specific date.
We cover all of these record keeping requirements for you as part of our pension and payroll service. So if you need any help in designing and setting up your workplace pension, or you’d like to outsource your payroll to us, please give us a call. We’re aiming to be live on Facebook every Friday morning at 11am so if you’ve got any questions please post them in the comments section. Please like our facebook page and follow us on twitter.
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What do our customers think..?
"We wanted to embrace Auto-Enrolment to get good pensions in place for our team early. We interviewed a couple of companies to assist us, and Sarah gave a very good case for her company. We are confident that we made the right decision! From selecting the right provider, through to setting up the systems and even presenting to our staff, Sarah and her team were excellent. I don't hesitate recommending the Auto-Enrolment Bureau to anyone looking to enrol their company. My only words of advice are, do it early!"
Richard Hardstaff, Director, Polydron (UK) Ltd