RTI. Auto-enrolment to pension schemes. An increase to the minimum wage.
There have been a few changes in the news recently. The important ones for employers are the changes to national minimum wage, the introduction of RTI reporting, and the introduction of automatic enrollment of workers to pension schemes.
National Minimum Wage
From 1st October 2012 the minimum wage rates are:
- £6.19 an hour for workers aged 21 and over (an increase of 11p)
- £4.98 an hour for workers aged 18-20
- £3.68 an hour for workers aged below 18 who are no longer of compulsory school age
- £2.65 per hour for apprentices under 19, and 19 or over in their first year of apprenticeship
Payroll changes – RTI
HM Revenue and Customs (HMRC) is changing the way employers report tax and national insurance (NIC) liability. Currently, you (or your payroll provider), calculate tax and NIC on a regular basis. You pay your employees their net wage or salary. You then pay the tax and NIC to HMRC monthly or quarterly. At the end of the tax year, a P35 report is filed with HMRC. The P35 confirms the amounts of tax each employee has paid, and the total tax and NIC deducted and paid to HMRC by the employer.
Under the new system – RTI (real time information) employers send a report to HMRC when every payroll run is completed. Each report will contain employees’ personal and payment details. So there will no longer be a year-end return to file. HMRC will no longer require P46s and P45s to be filed, but you will still need the same information from starters and must give P45 information to leavers.
To prepare for the change you’ll need to make sure your software can file RTI reports, and check that all of your employee details are accurate. If you use a payroll provider, or bureau, they should handle the change for you.
The payroll software that we use is fully compliant with the new regime, so clients can expect to see little difference in the work they need to do.
More information is on HM Revenue and Customs website, or please contact us for help with your payroll.
Pension Auto-enrolment
The introduction of compulsory pension schemes for jobholders has been in the news recently. Currently only large companies must make sure all eligible workers are enrolled onto a qualifying pension scheme. It will be extended to all employers by 2017.
Employers will have to deduct a proportion of the jobholder’s pay, and make an additional employer contribution.
The dates from which employers must start (the staging date), depend on the number of employees you have and your PAYE reference. More information what you need to do, when you’ll need to do it, and what you must not do, can be found on the Pensions Regulator website:
When the time comes to set up your scheme, please talk to an independent financial advisor to find the most cost effective scheme for you and your workers. If you would like help in finding a good financial advisor please contact us.