What Your Payroll Team Needs To Know About GDPR

Payroll Services BirminghamAfter months of speculation on how GDPR will affect UK businesses the wait is over and the new law came into force on 25th May 2018.  Quite how the UK Information Commissioner will interpret GDPR in the “real world” is yet to be revealed, but some unequivocal facts are certain and this is what you need to know.

You need to take GDPR seriously, no matter how large or small an employer you are. Fines for non-compliance are Euro 20m or 4% of turnover.  Which for some companies and organisations could amount to staggering sums.

You need to treat the data you hold on your employees with respect and care. It needs to be safely stored and you have new obligations such as, when personal data has been lost or compromised, the data breach must be reported to the Information Commissioner within 72 hours and all employees impacted must be notified.  If this does happen, then it is likely that the payroll department will need to do the notifying as they usually are the department that holds and uses personal data regularly.

GDPR requires that your employees know what data you hold on them, and what you use it for. It requires an informed decision on the employees’ part for data to be held, processed and analysed by the payroll department. Employees can withdraw their consent for certain data to be used, although in order to carry out your duties for HMRC, for example, your legal obligation could be the basis upon which you hold and process the data.

However, you also need to know that your employees now have enhanced rights to access the data you hold on them and ask for it to be corrected or deleted. If you do not have a centralised system, and instead are working on spreadsheets and various paper documents to get this information together could be time consuming and under GDPR you have 40 days to respond to such requests.

The Chartered Institute of Payroll Professionals is running courses on GDPR, or please contact our payroll professionals at Payroll Masters’ Birmingham Head Quarters.

Are You Confident Your Minimum Wage Processes Are Correct?

Payroll Service BirminghamWhen it comes to processing payroll the demands on employers are constantly becoming more and more onerous because regulations are constantly changing.  There seems to be a new announcement every week! This means that employers have to be one step ahead so their systems and processes are in place, ready for when new aspects of payroll compliance come into force.

For example, did you know that in April next year (2019) employers will need to include the number of hours worked by an employee on their payslip? However, this is only for hours they are being paid and only in situations where the employee’s pay varies as a result of the time worked.

There is also a consultation going on right-now on how to increase transparency in the UK labour market which is in response to the Taylor review. The review recommended that all workers should get a payslip, and the consultation is looking at how this can be implemented.

It seems that every piece of legislation has nuances and circumstances in which something either applies or doesn’t dependent upon the exact situation. This is truly a difficult path for non-payroll experts to follow.

Payroll Masters clients have real peace of mind that their payroll function is completely conforming to the latest requirements of employment law. We are based in Birmingham but our services are undertaken for all kinds of employers across the UK.  From individual disabled persons employing carers through direct payments , to organisations processing large payrolls.  Please contact us  for a no obligation chat about your needs.

Can You Correctly Answer This Question On Taxation of Employee Expenses?

Payroll Services BirminghamWe are members of the Chartered Institute of Payroll Professionals. Earlier this year they posted this question on their website:

“If your employee has a meeting away from their normal workplace and they pass their workplace en route to the meeting, do they claim the mileage from home to the meeting or just from their workplace to the meeting?”

77% of respondents said they claim from the workplace to the meeting

21% of respondents said they claim the whole journey from home to the meeting

2% of respondents said you cannot claim at all

What would you have said? Who is correct?

The answer is – it depends. But the 2% were definitely wrong!

Your employee can claim mileage, but what they do on the way to the meeting determines whether they can claim from home to the meeting or just from their normal workplace to the meeting.

HMRC’s policy used to be that if the employee drove past their normal place of work they could only claim for the mileage from the workplace to the meeting. This policy has changed.

Here are 3 scenarios:

Scenario 1

The employee goes straight from home, doesn’t call in at the normal workplace and goes directly to the meeting.

They can claim mileage for the whole of the journey

Scenario 2

The employee pops into the normal workplace to collect some papers. They don’t do anything else and then go straight to the meeting.

They can claim mileage for the whole journey because what they did in the workplace is classed as ‘incidental’ by HMRC.

Scenario 3

The employee stops off at their normal workplace on the way to the meeting and has a short meeting with a colleague on a project.

They can only claim the mileage for the journey from the normal workplace to the meeting because what they did in the office is classed as ‘substantive’ by HMRC.

This survey resulted in 956 responses. One of which flagged up that the HMRC’s own EMI (Employment Income Manual) didn’t correspond to the guidance in the 490 Employee Travel – tax and NICs guide.  The CIPP has been assured that HMRC will look into this conflicting advice!

Payroll Masters is a premier outsourced payroll solution provider. We are based in Birmingham and we are experts in all matters concerning payroll.  So if you are ever in doubt, please contact us  we will be delighted to help.

Is It Ever Ok Not To Inform Or Consult On Redundancies?

Payroll experts birminghamCast your mind back to the Keeping Kids Company closure in August 2015. At the time it was a big media story because the charity had received a lot of government funding, then everything unravelled very quickly and the charity closed down.

KKC was taken to an employment tribunal accused of failing to inform and consult with their employees on pending possible redundancies. The charity offered the defence of ‘special circumstances’ sighting the events of August 2015 which lead to the closure and 20+ redundancies.

However, in June 2015 KKC applied for emergency government funding with a business plan to restructure the business whereby half of its staff might be made redundant within a few months.

The Employment Appeals Tribunal ruled that ‘special circumstances’ that occurred in August 2015 was not sufficient grounds for defence and that the duty to inform and consult with employees should have happened in June on the publication of their business plan.

Often employment tribunals rule in favour of employees because the employer failed to follow the correct procedure. Which is what happened in this case.  Clearly KKC was aware that redundancies were likely but they didn’t inform or consult with their employees.

Payroll and HR matters are very closely intertwined, and at Payroll Masters we understand when and how HR issues can impact on the processing of wages and salaries. For more complex HR matters we have tried and trusted partnerships with HR Service providers for commercial businesses and public sector organisations, and specialist HR Services for individuals employing people using Direct Payments.  Contact our Birmingham head office team or visit our HR Services page for more information.

Senior Staff And Directors To Be Prosecuted By The Pensions Regulator

Outsourced Payroll BirminghamThe Pensions Regulator is prosecuting the directors and some senior individuals at a Derbyshire based national recruitment firm.

This is the first time the TPR has launched prosecutions for computer misuse. The firm called Workchain Ltd, and formally known as Smart Recruitment UK Ltd, is accused of using employees personal details to log into their workplace pension scheme and terminate their employees membership of the scheme.  Employees can opt out of the scheme, but they are required to do this themselves.

The defendants, who have all been publicly named, have been summoned to Derby Magistrates Court on 7th June 2018.  If convicted for computer misuse in a magistrates’ court the maximum sentence is six months’ imprisonment and/or an unlimited fine.  Or two years’ imprisonment and/or and unlimited fine if committed to the Crown Court.

We are based in Birmingham, but support clients right across the UK on all their Payroll matters including pension administration services for Auto Enrolment. If you have a question, please contact us .

MPs To Examine If HMRC Deals Equally Fairly With Big Business and Small Businesses

Payroll Services BirminghamWe’ve all seen the headlines about businesses like Apple, Starbucks and Gap allegedly earning millions of pounds of profit in the UK but paying little Corporation Tax. It now seems that MP’s are going to look into this and whether HMRC adhere to their own internal governance processes to ensure that all tax disputes are dealt with fairly and in even-handed manner.

The Treasury Sub-Committee will study the steps HMRC has taken to address public concerns about the actions of some businesses and individuals who seem to be determined not to pay their fair share of tax. This scrutiny will also look into agreements reached that are outside of HMRC’s formal enquiry process.

Our head office is in Birmingham, but we have clients all over the UK who rely on us for help and advice on all matters related to Payroll including personal tax so please get in touch .

Do You Understand The Rights Of Your Agency Workers?

No one can deny that the use of agency workers is part of the fabric of employment in the UK. The current figure is 865,000 agency workers and this is expected to rise to 1 million by 2020 according to data from an ONS Labour Force Survey.

Payroll BirminghamAs a business using agency workers you need to understand that when an agency worker is on assignment with you they are temporarily under the supervision or direction of the hiring organisation, that means your organisation, but they are still employed by their agency.

We tend to use the word ‘agency’ as a catch-all term but the term ‘agency’ can apply to temporary work agencies, recruitment agencies, staffing companies and entertainment and/or modelling agencies.

As an organisation using personnel from agencies you need to understand their rights and your responsibilities to provide a good and productive working environment.

Did you know an agency worker can have one of three main types of employment status which means they have different rights?  They can be an employee, a worker or self-employed.

Workers have employment rights such as paid holiday and the National Minimum Wage, but they normally have few responsibilities to the agency and can normally decline work offered to them.  An agency worker who is classed as an employee is usually employed under a contract of service.  They have additional rights such as getting paid if work isn’t available, but they have more obligations to the agency than people classed as workers.  Such as they might have to accept work offered to them and be available for a minimum amount of hours each week.

Agency workers who are genuinely self-employed are often referred to as contractors.  They don’t have any employment rights, but have even fewer commitments to the agency, such as they can send someone in their place to do the agency work.

As a business, organisation, school or college using agency workers it is prudent for you to know workers employment status with their agency and how this could impact upon you and your reason for needing agency staff.

Our head office is in Birmingham, but we have clients all over the UK who rely on us for help and advice on all matters related to Payroll and HR please get in touch.

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.