DPD Offers Sick Pay And Holiday Pay In New Driver Contract

Payroll Services BirminghamFollowing the death of a DPD driver the BBC has reported that DPD is the first parcel carrier to recognise the need to improve the way they work and offer drivers new contracts. The carrier had been under scrutiny after work pressures were blamed for the death.

DPD’s Chief Executive said that while their self-employed franchise scheme had benefited thousands of drivers over the past 20 years, it hadn’t moved with the times and needed updating.

DPD is reportedly offering 6,000 drivers the choice of remaining self-employed or moving to the new contract, and the company is paying for advisers to help drivers make their decision.

The Government appointed former Labour policy adviser Matthew Taylor to look at what has been termed the ‘gig economy’ and published their response to the Taylor review on Modern Working Practices in February 2018. Key among the response was “For the first time, the government will be accountable for good quality work as well as quantity of jobs – a key ambition of the UK’s Industrial Strategy.”

For advice on sick pay, holiday pay and all matters related to Payroll please get in touch and one of our helpful advisers at Payroll Masters Birmingham Head Office will be only too pleased to help you.

Government Urged To Help Low Paid Workers As Auto Enrolment Costs Them More Than Other Workers

auto enrolment BirminghamThe Low Incomes Tax Reform Group (LITRG) has highlighted inequalities with Auto Enrolment depending upon what type of scheme you are enrolled in and if you are low paid. Especially in light of the increase in contributions employees will be required to make from this month (April 2018).

LITG Chair, Anne Fairpo said “The increase in contribution rates makes auto enrolment a much bigger consideration for the lowest paid. The fact that many people on low incomes cannot obtain tax relief is a huge disincentive – it makes auto enrolment effectively 20% more expensive for them.”

Workers affected are squeezed by:

  1. Earning over £10,000 (which is needed to trigger auto enrolment)
  2. Earning below the income tax threshold (which is currently £11,500)
  3. Earning at or near the minimum wage, meaning they can’t salary sacrifice to save 12% National Insurance

There are broadly speaking two kinds of auto enrolment scheme a ‘net pay’ scheme or a ‘relief at source’ scheme. On a ‘net pay’ scheme you cannot claim tax relief.  On a ‘relief at source’ scheme you can!

The LITRG are suggesting that HMRC could see from PAYE real-time data if pensions contributions have been made into a ‘net pay’ scheme (so no tax relief has been claimed), and the Government could pay the tax relief they have missed out on into their pension. This would mean the individuals wouldn’t lose out.

If you’ve got a question about any aspect of payroll or auto enrolment and pensions reporting contact one of our experienced team.  Payroll Masters office is in Birmingham but we work with clients right across the UK. We are always just a phone call away.

New Auto Enrolment Levels Now In Force

Payroll BirminghamFor employees who have opted-in to an Auto Enrolment pension they and their employers will be paying into them at higher levels from this month.

April 2018 sees the contribution rates rise from 1% paid by the employee and 1% paid by the employer to 3% paid by the employee and 2% paid by the employer. These are the minimum contribution levels.

This increase has led to concerns that there could be a sharp rise in people opting-out of their auto enrolment pensions as the increase impacts their take-home pay. But this is not the whole story.  The auto enrolment pension levels are due to rise again in April 2019.  The total minimum contribution will be 8%, with 5% contributed from employees and 3% coming from employers.

Nine million workers have been paying the minimum into their pension and to date the drop-out rates have been less than expected at 10% of employees eligible for auto enrolment opting-out. However, the government is predicting the rate of opting-out to increase from the current figure of 10% to 22% after April 2018, and 27.5% after April 2019.

Former Pensions Minister, Sir Steve Webb thinks that people will take the increase in contributions “in their stride” as their overall take-home income rises. The national living wage will rise by 4.4% also in April 2018.

If you’ve got a question about any aspect of payroll or need help on HR, including shared parental leave, contact one of our experienced team at Payroll Masters based in Birmingham. We are just a phone call away.