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Accountants – Would an auto enrolment pre-assessment tool be useful?
Auto Enrolment is now in full swing and starting to affect small and micro employers. Many of these employers do not understand auto enrolment and do not want any ongoing involvement with the process. A key concern for small and micro employers is how much auto enrolment will actually cost their business.
With auto enrolment, employers are faced with additional ongoing costs, including the employer contributions each pay period. What is the easiest and most accurate way for an employer, or a bureau on their behalf, to calculate these costs?
BrightPay have developed a pre-assessment tool, which enables users to automatically prepare a pre-assessment report. This report is useful to send to clients 6 months in advance of their staging date, giving the employer a preview of what auto enrolment will look like when they reach their staging date.
The pre-assessment tool uses employee details from the current pay period to provide an estimate of what auto enrolment might look like at the time of staging. The report will include details of each employee’s auto enrolment worker category, along with their pensionable pay, qualifying earnings, employee contributions and employer contributions. Watch BrightPay’s Pre-Assessment video.
PDF Example: Pre-assessment Report
The amounts are subject to change, depending on non-eligible or entitled workers choosing to join the scheme and fluctuations in employee pay.
The report can be exported to PDF and also includes some general information about employee assessment, including definitions of worker categories, qualifying earnings and minimum contribution rates.
This is an ideal document to send to clients in advance of their staging date, giving them an idea of how much auto enrolment will cost them at each pay period thus allowing them to plan accordingly. For example, the report may show that the employer has no eligible jobholders, and so is not required to set up a pension scheme.
BrightPay will also allow you to create a post-assessment report. After staging, the assessment report will give you a snapshot of what auto enrolment looked like on the staging date, highlighting the assessment date, the employee worker categories and postponed employees.
PDF Example: Post-assessment Report
Video: You can see how BrightPay’s pre-assessment tool works here.
BrightPay Payroll and Auto Enrolment Software
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Alterledger moved to Legal House
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Be Prepared to Help Clients with Auto Enrolment
1.8 million small and micro employers are due to reach their staging date within the next three years. It is expected that 78% of these will seek advice from accountants, bookkeepers or payroll bureaus.
Are you prepared to help your clients with their new obligations? Auto enrolment provides a great opportunity to bureaus to increase profitability by offering additional services to clients. Even if you do not wish to offer auto enrolment services, clients may still turn to you for advice and counsel. It is important to know the basics of auto enrolment so that you can point them in the right direction.
When it comes to auto enrolment, payroll bureaus can avail of a number of online resources to upskill and self-educate. The most popular online resource used is the Pensions Regulator’s website, which has various sections for employers, advisers and individuals.
Another resource that can be used is BrightPay’s free auto enrolment webinars.These webinars are specifically designed for bureaus to make it easier to help payroll clients with their new obligations.
BrightPay have a number of auto enrolment webinars scheduled for the remainder of this year, featuring various guest speaker, including Steve Pipe, Mike Foster, Darren Critten, AE in a Box, Trust Pensions, and Creative Auto Enrolment.
Upcoming Webinars
29 October @ 2.30 pm
● Auto Enrolment – Are your Clients Ready?
● Steve Pipe – How to price so you can earn more and work less
● Register here
2 November @ 11.00 am
● Auto Enrolment: 7 Steps to Profit with BrightPay
● Darren Critten – Auto Enrolment – Collaboration is the key to success!
● Register here
17 November @ 11.00 am
● Auto Enrolment – Five Steps to Bureau Success
● Trust Pensions – How to choose a quality scheme and not get lost trying to navigate the auto-enrolment jungle.
● Register here
To find out more about upcoming webinars here.
BrightPay is at the forefront when it comes to auto enrolment. As well as the webinar series, bureaus can also make use of BrightPay’s free auto enrolment guides. BrightPay’s most recent guide, Bureaus are missing out on making a profit from AE, highlights practical steps that will ensure auto enrolment will be a smooth and profitable process. You can download it here.
BrightPay is an integrated payroll and auto enrolment software solution that will allow you to streamline your client’s auto enrolment duties. New customers can now get 50% off a BrightPay bureau licence when you switch from a different payroll software provider.
BrightPay’s bureau licence (normally £199 + VAT per tax year) includes unlimited employers, unlimited employees, auto enrolment functionality and free phone and email support. Now you can get this for £99.50 + VAT with no hidden costs.
You can book a demo of BrightPay to see just how easily auto enrolment can be. You can also download a 60 day free trial with full functionality.
*Offer applies to new customers who switch from a different payroll software provider to a BrightPay 2015/16 bureau licence for the first year subscription only. This does not work in conjunction with any other offer.
The Pensions Regulator introduces Auto Enrolment Toolkit for Basic PAYE Tools users
The Pensions Regulator estimates that 1.8 million small and micro employers will reach their staging date within the next two years. These employers include an estimated 200,000 HMRC Basic PAYE Tools (BPT) users.
To date, BPT users have not had access to software functionality that can help them carry out their auto enrolment duties. Assessing the workforce and calculating contributions manually could lead to errors, burden and non-compliance.
Although free and low cost software is available to support auto enrolment, a high volume of BPT users are unlikely to switch to commercial software as many are concerned that they will be persuaded to buy additional products and services. Whilst there is no legal obligation to have software in place, it is evident that it improves employer compliance.
Auto Enrolment Toolkit
The Pensions Regulator are working to release an auto enrolment toolkit by November 2015. As it is a government provided tool, some BPT users may assume that it is the most appropriate solution to use.
However, even though the tool will help BPT users with auto enrolment, it will not provide auto enrolment functionality. The toolkit is intended to be in the format of a downloadable excel spreadsheet that will:
● indicate who should be automatically enrolled into a pension scheme
● provide an employer/employee contribution value (where applicable)
Although the tool will assess the workforce and calculate contributions, the scope of the tool will be very limited. What it will not do:
● It will not support multiple pay frequencies.
● It will not support variable contribution levels.
● It will use a tax-based pay reference period only.
● It will assume that the legal minimum entitlement is being used.
● It will calculate contributions based on banded qualifying earnings only.
● It will only support up to 15 workers.
● It will only support entitled workers if they are placed in an auto enrolment scheme on the same basis as other employees.
● It will not have postponement functionality.
● It will not have the ability to support re-enrolment.
You can find a full breakdown of the limitations here.
The auto enrolment toolkit will reduce the risk of both initial and ongoing non-compliance among BPT users. However, will it actually make the auto enrolment process easier?
Integrated Software
The Pensions Regulator encourages employers to use an integrated payroll and auto enrolment solution that will simplify and streamline auto enrolment. An integrated system, such as BrightPay, will allow you to save time and reduce workload.
There is now a 50% discount for new customers who purchase a BrightPay 2015/16 standard licence when you switch from HMRC Basic PAYE Tools. A standard licence (normally £89 + VAT per tax year) includes unlimited employees, auto enrolment functionality and free support. Now you can get this for just £44.50 + VAT per tax year.
BrightPay also has a free licence for micro employers with up to three employees, including support and auto enrolment functionality.
You can now book a demo to see how BrightPay handles auto enrolment. The one-on-one online demo is done through an online screen sharing site and lasts approx. 20 minutes. Alternatively, you can download a 60 day free trial to try it out for yourself.
* Offer applies to new customers who switch to BrightPay from HMRC Basic tools or another payroll software provider for the first year subscription only. This offer applies to BrightPay 2015/16 employer licences only and cannot be used in conjunction with any other offer.
Written by Rachel Hynes for BrightPay Payroll and Auto Enrolment Software
New Childcare Vouchers from Autumn 2015
Childcare vouchers to be withdrawn for new employees
The existing benefits available in the form of childcare vouchers to employees will be withdrawn to new entrants in the Autumn of 2015. The current scheme saves National Insurance contributions for both employers and employees. Employees also save income tax.
English: British National Insurance stamp. (Photo credit: Wikipedia)
New scheme to start in Autumn 2015
The new scheme for childcare vouchers will not be as good for many employees who currently benefit from the current scheme, but where both parents work and are self employed, they can get the government to pay £2,000 towards registered childcare.
How do I set up childcare vouchers?
Childcare vouchers are set up through your payroll scheme and must be available to all eligible employees to receive the tax benefit.
Alterledger can help
For more information on saving employer’s national insurance and preparing for changes to childcare vouchers, contact Alterledger or visit the website alterledger.com.
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Free Webinar for Employers
Free Webinar: The Essential Guide to Auto Enrolment for Employers
For employers auto enrolment is here to stay!!
If you are an employer who does not have payroll software or use the HMRC Basic PAYE tools to process your company’s payroll then this webinar is for you. This free webinar will take you through the main administration employer duties of auto enrolment including: an auto enrolment overview, staging, employee assessment, enrolment, postponement, opt in & opt outs, employee letters, reporting, choosing payroll software and processing auto enrolment in house or outsource it.
This webinar is specifically designed to help employers understand the processes involved in completing their automatic enrolment duties. Each and every employer with at least one member of staff has new obligations to carry out.
The webinar is ideal for employers who process their payroll in-house or are considering outsourcing it to a payroll professional. The session will help you understand what is involved for you and your business.
Places are limited.
For more information visit our website
Who cares what you think?
Are testimonials worth anything?
Many websites include “testimonials” from “customers”, but do they have any worth? If you want to attract new business it is good to be able to publish positive feedback, which helps demonstrate the value that other customers find in your service. The problem is that if reviews are obviously edited and self-selected they are not obviously representative of the views of your customers. Single line reviews taken out of context can be particularly misleading!
Use external review sites
One of the best-known review sites is tripadvisor. The greatest strength of these reviews is that hotels and restaurants etc have no control over the reviews. They have the opportunity to respond to criticism, but can’t cherry-pick the best reviews to give a false impression. The Pensions Regulator website is keen to point out that “private sector organisations we link to are not endorsed by Government and are provided for information only”; however it is worth noting that they include a link to VouchedFor on their advice page for individuals and in their guide to finding an advisor for Pension Auto Enrolment.
VouchedFor
If you are looking for a hotel you would probably prefer to check tripadvisor rather than lot of different websites for reviews. VouchedFor works along similar lines to tripadvisor, but for Accountants, Financial Advisors and Solicitors. Professionals who have a listing on the site must confirm that they recognise the name / email address of any reviewer before the review is posted online. Just like tripadvisor the professionals can’t read the review until is online so they can’t edit out any negative feedback and poor scores.
Tim Alter appeared in the guide in The Sunday Telegraph on March 29th. You can also read all his great client reviews on his VouchedFor profile!
Auto Enrolment
Many small businesses will need professional advice to help them set up a pension scheme to comply with Auto Enrolment regulations. If you are an employer and still need to prepare for your staging date, you can use an Accountant or Financial Adviser to guide you through the process. For help with setting up your payroll and preparing for your staging date, please contact Alterledger.
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Letters for under 21s
Changes for employees under 21
From 6th April 2015 employer national insurance contributions will be abolished for under 21s. If you employ anyone over 16 and under 21 years old you will need to use one of the new letters for under 21s in the national insurance category setting of your payroll software.
English: British National Insurance stamp. (Photo credit: Wikipedia)
Secondary contribution rates
This table shows how much employers pay towards employees’ National Insurance for tax year 2014 to 2015. The contribution rate calculated by your payroll software is set by the category letter.
| Category letter | £111 to £153
a week |
£153.01 to £770
a week |
£770.01 to £805
a week |
From £805.01
a week |
|---|---|---|---|---|
| A | 0% | 13.8% | 13.8% | 13.8% |
| B | 0% | 13.8% | 13.8% | 13.8% |
| C | 0% | 13.8% | 13.8% | 13.8% |
| D | 3.4% rebate | 10.4% | 13.8% | 13.8% |
| E | 3.4% rebate | 10.4% | 13.8% | 13.8% |
| J | 0% | 13.8% | 13.8% | 13.8% |
| L | 3.4% rebate | 10.4% | 13.8% | 13.8% |
National insurance categories
Most employees will have a category letter of A or D depending on whether or not they are in a contracted-out workplace pension scheme. There are categories for mariners and deep-sea fisherman; the more common categories are shown below:
Employees in a contracted-out workplace pension scheme
| Category letter | Employee group |
|---|---|
| D | All employees apart from those in groups E, C and L in this table |
| E | Married women and widows entitled to pay reduced National Insurance |
| C | Employees over the State Pension age |
| L | Employees who can defer National Insurance because they’re already paying it in another job |
Employees not in contracted-out pension schemes
| Category letter | Employee group |
|---|---|
| A | All employees apart from those in groups B, C and J in this table |
| B | Married women and widows entitled to pay reduced National Insurance |
| C | Employees over the State Pension age |
| J | Employees who can defer National Insurance because they’re already paying it in another job |
Employees in a money-purchase contracted-out scheme
This kind of scheme ended in April 2012 but some employees might still be part of one.
| Category letter | Employee group |
|---|---|
| F | Tax years before 2012 to 2013 only: all employees apart from the ones in groups G, C and S in this table |
| G | Tax years before 2012 to 2013 only: married women and widows entitled to pay reduced National Insurance |
| C | Employees over the State Pension age |
| S | Tax years before 2012 to 2013 only: employees who can defer National Insurance because they’re already paying it in another job |
How to claim zero rate of employer contributions
You should already have proof of age for all your employees. A copy of a passport, driving licence or birth certificate will be required to show that your employee qualifies for the new zero rate of employer’s contribution. The seven new categories are valid from 6th April and must be applied from the first salary payment after 5th April 2015 to benefit from the new zero contribution rate for employers.
What does this have to do with Auto Enrolment?
You need to have proof of age for all your employees aged under 21 to claim the zero contribution rate for employer’s National Insurance. By the time of your staging date you must assess all your workers, based on their earnings and age. To help you prepare for Pension Auto Enrolment you can make sure that all your employee records are up to date and that your payroll software has the full details for all workers including their date of birth. This is a good opportunity to clean up all your employee data.
Alterledger can help
For more information on saving employer’s national insurance and preparing for Pension Auto Enrolment, contact Alterledger or visit the website alterledger.com.
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What a difference a day makes
How about three extra days?
HMRC has relaxed the rules on “Real Time Information” for payroll reporting. UK employers are required to send electronic reports to HMRC with each payment of wages to employees. HMRC are now saying that you can submit your RTI report up to three days after the payment date without incurring a penalty.
Any employer who has received an in-year late filing penalty for the period 6 October 2014 to 5 January 2015 and filed within three days, should appeal online by completing the “Other” box and add “Return filed within 3 days”.
Outsource your payroll
Despite the relaxation provided by three extra days, the burden on employers is only likely to increase over the coming months. Auto enrolment is being rolled out to all UK employers over the next couple of years. With the new payroll year about to start on 6th April, now is a good time to consider using a payroll bureau – or at least checking that your current systems will deal effectively with auto enrolment pensions. For more information please and see how Alterledger can help please click here.
Business Accountant 