Now that the new financial year is upon us, we’re busy with the many payroll tasks that need to be carried out at this time.
April is always a hectic month for employers’ payroll departments, and it’s no wonder that many firms outsource the work to companies such as AMR, who can dedicate their time and expertise to the jobs in hand.
This year there are significant changes to auto enrolment pension rates, as well as increases in personal tax allowances. Year-end returns must be prepared by 19th April, and of course there are P60s to send out to employees before the 31st May deadline.
So here’s a rundown on the tasks in hand and what they mean . . .
Increases in minimum contributions for automatic enrolment pensions
The auto enrolment minimum pension contribution was initially 2%, of which at least 1% was paid by the employer. From 6th April 2018 this increases to 5% of qualifying earnings,
of which at least 2% must be paid by employers. (This isn’t the final rise – in April 2019 the minimum contribution will be 8%, with at least 3% from the employer.) On behalf of our clients, we ensure that these new figures are accurately reflected in employees’ payslips and company accounts. Non-compliance could result in hefty fines, so it’s vital to get this right as the new tax year begins. Changes to personal tax allowancesA personal allowance is the amount you’re able to earn before paying any tax at all. For 2018-19, this will rise from £11,500 to £11,850. The higher rate tax threshold – the point at which tax is paid at 40% rather than the basic rate of 20% – rises from £45,000 to £46,350. The additional tax rate of 45% remains the same, kicking in when income reaches £150,000. Payroll software will update certain figures automatically, but humans are needed for many changes! Here at AMR our thorough processes are checked and double checked to ensure that employees are paying the correct amount of tax for 2018-19. Preparing P60sEmployers must give a P60 to all employees who are working for their business on the last day of the tax year (5th April). The P60 summarises total pay and deductions over the previous tax year. It’s a useful piece of paperwork that employees should keep safe, as it could be needed for various reasons including filing a self-assessment tax return, applying for a mortgage or tax credits, or claiming a tax refund. Getting P60s out to employees on time is a legal requirement but it can be time consuming. Many firms find it more cost effective to contract out payroll duties such as these. Here at AMR, we work alongside your in-house team to provide a seamless service that will keep your payroll accounting on track. Year-end Full Payment Submission (FPS)Companies must send their employee payment details to HMRC by 19th April. The FPS contains details of all payments made to employees, income and NI contributions paid, details of any starters or leavers from the pay run, and employee information such as name, NI number and tax code. This obligation must be fulfilled, and penalties can be incurred for late filing. If your company needs help managing payroll, please don’t hesitate to contact us to arrange an informal, no-obligation meeting. We’d be delighted to give you a payroll quote, tailored exactly to the needs of your business.
