Shipleys LLP

Chartered Accountants and Professional Business Advisers

Payroll update

How four recent payroll developments could affect your business

There have been some interesting recent developments we’d like to let you know about. From an increasing shift to flexible working and the ‘gig economy’, to changes in the rules on voluntary overtime. We’ve pulled together some of the important information for you here, along with some hints and tips to make sure you stay on top of it all.

Changing status: employment rights in the ‘gig economy’

The combination of technology and changing attitudes are transforming the modern workplace. Recent figures suggest that the number of people who work for themselves has gone up over 45% since 2000. That’s 4.8 million people – or one in seven workers.

So what does it mean for me?

The way businesses interact and engage with this workforce has led to confusion about the employment status of workers. It’s also led to high profile (and potentially expensive) legal cases for gig economy trailblazers like Uber and Deliveroo.

Your responsibilities can change depending on the status of your employee. And a person who is self-employed or a ‘worker’ will have different legal rights to somebody who’s considered your employee.

As a result of the lack of clarity, leading workplace experts ACAS have issued new guidance to help companies understand the modern employment status minefield.

The key points

In a nutshell, there are three main types of employment status:

  1. Employee
  2. Worker
  3. Self-employed

Each of them will have different rights. And you’ll have different responsibilities for each. For example, employees have the most employment rights. So if a right applies to a worker, then it will apply to an employee. Workers are also entitled to things like the national minimum wage and paid annual leave.

Self-employed staff will in general still have protection for their health and safety on your premises. They’ll also have specific rights and responsibilities laid out in the terms of their contract with you.

You can see the new ACAS guidance right here. And if you’d like to have a chat about employment status and how it affects your business just get in touch. We’d be happy to have a chat.

Auto Enrolment. Pensions Regulator spot checks continue

The Pensions Regulator (TPR) is taking a dim view of employers who are failing to take their Auto Enrolment responsibilities seriously.

TPR began a series of spot checks in February this year to identify London-based businesses who hadn’t taken the necessary steps to be compliant. In June, the spot checks began in Greater Manchester. The TPR will continue their inspections throughout the summer and autumn in various cities around the UK. And beware – they’ll only give your company a few days advance warning.

How do I stay compliant?

Auto Enrolment is not an optional extra. It’s the law. Failure to comply can mean severe penalties and fines. Latest TPR figures indicate they’ve issued over 4,500 fixed penalty and 1000 escalating penalty notices in the first three months of 2017.

Most businesses have been ready, however. And you can be, too. If you’re concerned about you AE responsibilities or would like a chat about what you need to do after receiving your staging date, then we can help. Get in touch on +44 (0)1483 423607.

Voluntary overtime and holiday pay. Rule change ahead?

If you employ staff who perform out of hours duties, a ruling in a recent tribunal might be affect you.

The Employment Appeal Tribunal (EAT) has upheld a ruling that voluntary overtime has to be a factor when calculating holiday pay for your staff. This applies to workers who sign up for additional standby or ‘on-call’ duties in addition to their regular responsibilities. A member of staff who voluntarily looks after your 24-hour response telephone line, for example.

In this recent case (Dudley Metropolitan Borough Council v Willetts) the employer had argued that overtime payments weren’t classed as normal remuneration because they weren’t linked to specific tasks under the contract of employment.

But the EAT disagreed on the basis that excluding these payments from holiday allowances would lead to a financial disadvantage for the employee. And that this could lead to staff reluctant to take annual leave.

The council asserted that overtime payments were not ‘normal remuneration’ because they weren’t linked to the performance of tasks in the employment contract. However, the EAT rejected this argument because excluding these payments from holiday pay would result in a financial disadvantage.

How could this affect me?

As an employer, you may need to consider your voluntary overtime arrangements. If members of your team regularly work voluntary overtime then you may need to factor those payments into your holiday pay calculations.

Want more info? We’re happy to have a chat about the changes and how they may affect you. Give us a call on +44 (0)1483 423607 or drop us a line.

HMRC to push on with PAYE penalties for late filing

After a review of their risk-based approach to late filing PAYE penalties, the HMRC have confirmed they’ll continue with this approach in FY 2017-18.

This means that you’ll still have a period of three days after the deadline to submit your filing. However, if you persistently file after the statutory date, but within this three day period, HMRC will actively monitor your activity. They may then consider you for a penalty after the fact. And if you pay your fines late? Same rules apply. Persistent non-payers will be more likely to suffer increasing late payment penalties.

Time to get your PAYE filing ducks in a row? We can help. if you’d like to have a chat about making PAYE compliance easier just get in touch. We’d be happy to have a chat.

Shipleys payroll services. Taking the pain away

Payroll rules have become increasingly complicated over the last few years. So we know that keeping on top of all the current rules can be time-consuming. And that investing in the right systems can be expensive.

That’s why we offer flexible, scalable payroll services for our clients. Whatever you need. From making the calculations to running your entire payroll process. We help take your payroll headache away.

If you’d like to have a no obligation chat about how we could help you contact our payroll expert Jackie Boyton on +44 (0)1483 423607. Or you can find more information and all our contact details right here.

Specific advice should be obtained before taking action, or refraining from taking action, on any of the subjects covered above.  If you would like advice or further information, please speak to your usual Shipleys contact.

Need more help? Please contact us at payroll@shipleys.com or +44 (0)1483 423607