Keeping on top of payroll poses a huge challenge for businesses of all shapes and sizes.
The legislation governing tax and National Insurance Contributions (NICs) is forever changing, as are the rules relating to the National Living Wage (NLW) and auto-enrolment pensions.
All of these changes need to be carefully followed and taken into account when administering your payroll.
From 6 April 2018, businesses need to be aware of important changes to minimum auto-enrolment pension contributions. Up until 6 April, employers needed to contribute one per cent of pay into the pensions of any members of staff enrolled in a workplace pension scheme. However, from this date onwards, employers need to contribute two per cent.
Auto-enrolment pension changes are but one of the many things employers need to keep up to speed with when it comes to administering their payroll – and April is always a particularly busy time for changes.
From the beginning month, employers also need to make sure they have updated their payroll so that they are paying their employees the correct National Minimum Wage (NMW) and National Living Wage (NLW).
As of 1 April 2018, the NLW for people aged over 25 is £7.83. The NMW – which affects workers aged under 25 – has also changed and it is important that employers are aware of this.
Payroll is not an area where employers can afford to let things slip, as they could face dire consequences if they fall foul of the rules.
Failures to pay the NMW or NLW, or make the correct level of contributions to workplace pensions, for example, both attract substantial penalties.
On top of this, firms found not to be paying the NLW can also face reputational damage – as HM Revenue & Customs (HMRC) has recently begun ‘naming and shaming’ non-compliant businesses.
Payroll is a time-consuming task and a considerable source of stress for business owners and managers. Due to this, busy businesses are advised to consider the benefits of appointing expert accountants to assist with their payroll and auto-enrolment obligations.
Grunberg & Co can help to ensure that your business is always on top of its payroll and auto-enrolment obligations. For more information about how we can help, please contact us.