Visit google

Google Reviews

reviews

Streamlining Client Onboarding with Advanced AML Security Checks

In today’s business world, Anti-Money Laundering (AML) security checks are essential for financial sector businesses. These checks not only protect companies from fraud and illegal activities but also keep them compliant with the law. At Norwich Accountancy, we take this responsibility seriously and have recently improved our AML and ID verification processes to simplify and secure client onboarding, making the experience more efficient and reassuring.

What are AML security checks?

AML security checks are procedures used to prevent, detect, and report money laundering activities. They involve verifying clients’ identities, monitoring transactions, and ensuring all activities comply with legal standards. These checks are important for keeping the financial system honest and preventing money from being used for illegal activities like funding terrorism or drug trafficking.

Why are AML security checks important?

The main purpose of AML security checks is to protect businesses from being used as channels for money laundering. This protection maintains the trust and stability of the financial sector. Also, compliance with AML regulations is mandatory for companies that want to operate legally and avoid hefty fines and legal repercussions. By carrying out thorough AML checks, businesses can also improve their reputation and build trust with clients and partners.

Introducing Red Flag Alert

To streamline our AML security checks, we’ve partnered with Red Flag Alert, a leading provider of advanced AML solutions. Red Flag Alert’s cutting-edge technology allows us to perform thorough checks quickly and efficiently, reducing the burden on our staff and minimising the impact on our clients. This partnership enables us to maintain a proactive stance against financial crime while making sure our onboarding process stays smooth and responsive to our clients’ needs.

How Red Flag Alert Works

Red Flag Alert’s AML security checks are fully digital and user-friendly. When a new client begins the onboarding process they’ll receive a verification SMS asking them to verify their identity via their smartphone. This process involves three simple steps:

  1. ID document capture: The client is asked to take a picture of a valid government-issued ID document. The system ensures the document is clearly visible and free from glare or blurring.
  2. Selfie video: Next, the client takes a short selfie video using their smartphone camera. This biometric likeness check confirms the person presenting the ID is the actual owner of the document.
  3. Submission and verification: The client submits the photos, and Red Flag Alert’s AI-driven system performs an in-depth analysis, cross-referencing multiple databases to verify the information.

This whole process takes no more than 90 seconds, providing a swift and hassle-free experience. Also, Red Flag Alert’s technology includes advanced features such as multi-bureau analysis and a biometric liveness check, which enhance the accuracy and reliability of the AML checks.

Benefits of Red Flag Alert security checks

By implementing Red Flag Alert’s AML security checks, we offer several key benefits to our clients:

  • Speed and efficiency: Traditional AML checks can be time-consuming, often taking days to complete. Red Flag Alert reduces this time to just minutes, allowing us to onboard clients faster and without unnecessary delays.
  • Compliance assurance: Red Flag Alert’s technology ensures our AML processes are always up-to-date with the latest regulations, reducing the risk of non-compliance.
  • Enhanced accuracy: The AI-driven system provides a high match rate, reducing the need for manual intervention and reducing errors.
  • Improved client experience: The fully digital process is convenient and easy to use, providing a seamless onboarding experience for our clients.

Staying compliant with changing regulations

The regulatory landscape is constantly evolving, with new rules and requirements introduced regularly. The UK government is particularly focused on cracking down on economic crime, corruption, and data security. As a responsible company, we’re committed to staying ahead of these changes and ensuring our AML processes are always compliant.

Ensuring AML efficiency with Red Flag Alert

AML security checks are a key part of the financial sector’s compliance framework. By partnering with Red Flag Alert, we’ve enhanced our AML processes, making them more efficient, accurate, and user-friendly. This partnership not only helps us comply with regulatory requirements but also means that our clients enjoy a smooth and secure onboarding experience. By using advanced technology and staying compliant, we can protect our business and clients from the risks associated with money laundering and other illegal activities. As regulations continue to evolve, we’re focused on keeping our operations secure and following the highest standards of compliance.

Get in touch today

At Norwich Accountancy, we understand the importance of AML security checks and are proud to offer our clients the most advanced solutions. For more information on our AML processes or to discuss any concerns, please don’t hesitate to get in touch with our team.

Related news and events

Accounting
Accounting

17 April 2024

What you need to know about the Spring Budget 2024

Accounting

5 March 2024

Springing into Energy Savings: A Dive into the Latest Trends

Accounting

10 July 2023

Class 2 National Insurance Contributions: What You Need to Know

Visit google

Google Reviews

reviews

Keeping Payroll on Track Through Business Mergers and Changes

Managing payroll during business changes like mergers or successions is important to make sure you’re following HM Revenue & Customs (HMRC) rules. Here’s a detailed guide on what businesses should think about and how to manage these transitions smoothly. It covers updating employee records, handling taxes, and meeting legal requirements to protect both employers and employees. By following these steps, businesses can manage payroll effectively during these changes, keeping things running smoothly and making sure they stay on the right side of HMRC. This proactive approach not only helps with a seamless transition but also strengthens the business to adapt better to new situations.

Understanding mergers and successions

Before addressing payroll changes during mergers or successions, it’s important to grasp their impact on operations. Here’s how these transitions influence payroll management and what businesses should consider for smooth navigation:

Mergers: When businesses merge, they typically combine their payroll systems, sometimes using a new employer reference number. This helps simplify things and makes sure they follow HMRC rules. They might also need to merge employee records and payroll systems to fit the new setup.

Successions: In a succession, when a business changes hands through a sale or insolvency, the new owner takes over payroll duties. They’ll likely get a new employer reference number. This switch involves transferring employee records and payroll responsibilities to make sure everyone gets paid correctly and meets legal requirements. They might also tweak how they handle payroll to match how the new owner wants things done, keeping everything stable and compliant during the transition.

First steps to take

If your business is going through a merger or succession, make sure to reach out to the HMRC employer helpline straight away. They can help work out if it’s a merger or succession and give advice on which employer reference to use. If you need a new reference, HMRC will sort that out for you.

Moving employees to new payrolls

Before deciding whether to use the same employer reference or a different one during a business transition, it’s important to understand how each option affects payroll operations and compliance. Here’s how you can manage these changes effectively:

Same employer reference:

  • If moving employees to a new payroll but retaining the same employer reference, continue operating PAYE as usual under that reference.

Different employer reference:

  • Transfer payroll records to the new employer reference.
  • Submit a Full Payment Submission (FPS) under the old employer reference, including year-to-date pay and tax figures.
  • Provide affected employees with details of their pay and deductions up to the transfer date.
  • Submit an FPS under the new employer reference, making sure to restart year-to-date figures from zero and include full starting details for each employee.

Managing payroll obligations

When moving employees to a new payroll under a different employer reference, it’s important to handle PAYE tax and National Insurance Credits accurately. If you’re using cumulative tax codes, continue using the pay and tax details linked to the old employer reference until the transition is finalised. This consistency means that payroll calculations stay accurate and compliant with HMRC regulations throughout the transition. It’s essential for maintaining accurate records of employees’ tax deductions and National Insurance contributions. Managing these aspects carefully helps businesses smoothly switch to new payroll systems without disrupting employee payments or tax reporting.

Submitting P11D forms

P11D forms must be submitted depending on the type of change your business has experienced:

Merger of PAYE schemes:

  • Submit two P11D forms per employee receiving company benefits:
    • One under the original PAYE reference covering up to the merger date.
    • One under the new PAYE reference covering from the merger date.

Succession:

  • If HMRC has been notified about the succession, submit one P11D form per employee under the new PAYE reference, containing information for both old and new references.
  • If HMRC hasn’t been notified, submit two P11D forms per employee:
    • One under the old PAYE reference up to the succession date.
    • One under the new PAYE reference from the succession date.

Part scheme transfer:

  • Submit two P11D forms per employee:
    • One under the old PAYE reference covering up to the transfer date.
    • One under the new PAYE reference covering from the transfer date.

Compliance and reporting

Making sure you submit FPS and P11D forms on time and with accurate information is important to meet HMRC’s rules. Stick to the deadlines and give detailed information to avoid any fines or hold-ups in processing.

Navigating payroll changes in business transitions

Handling payroll adjustments during business mergers or changes involves careful planning and following HMRC guidelines. Understanding the differences between mergers and successions, transferring employees between payrolls correctly, and fulfilling P11D obligations are key steps. This makes sure payroll operations continue smoothly and comply with tax regulations. 

By following these steps, businesses can handle payroll responsibilities effectively during mergers, successions, or other significant changes, maintaining both regulatory compliance and smooth operations.

Need some help?

Connect with our experts for personalised advice. Call us today on 01603 630882 or fill out our contact form to get tailored support for your payroll transitions.

Related news and events

Payroll
Payroll

3 April 2024

How the 2024 Paternity Leave and Pay Amendments Benefit UK Families and Employers

Payroll

19 February 2024

Salary Sacrifice Arrangements for Employers Explained

Payroll

2 February 2024

Navigating HMRC’s Latest Off-Payroll (IR35) Compliance Guidelines

Visit google

Google Reviews

reviews

How the 2024 Paternity Leave and Pay Amendments Benefit UK Families and Employers

We’ve got some exciting news to share that will make a difference to families and employers across the UK. The government has recently announced some big changes to Paternity Leave and Pay, set to come into effect from the 8th of March, 2024. These amendments aim to provide more flexibility and support for fathers and partners while also offering advantages for employers. So, let’s dive in and explore how these changes will benefit everyone involved.

Flexibility for Fathers and Partners

One of the key changes is that paternity leave no longer has to be taken in one consecutive block of one or two weeks. Instead, dads and partners now have the flexibility to split their leave into non-consecutive blocks, giving them greater control over their time off. This means they can better accommodate the changing needs of their family while still taking the time needed to bond with their new baby. Whether it’s attending doctor’s appointments, helping with childcare, or simply being there to support their partner, this new flexibility means that fathers and partners can be more present and engaged during this important time in their family’s life.

Reduced Notice Period

Another big change is the shorter notice period for taking Paternity Leave. Before, employees had to give their employers more notice. But now, dads and partners only need to give four weeks’ notice before taking leave. This makes it easier for them to decide when to take time off, helping them to better adjust to their family’s needs with less stress during a busy and emotional time.

Support for Early or Premature Births

The changes also provide support for families when babies arrive earlier than expected. If dads and partners’ babies are born prematurely or before the 6th of April, 2024, they can still receive Statutory Paternity Pay (SPP) under the new rules. This safety net means that families can access the financial support they need, offering peace of mind when things don’t go as planned.

Transitional Guidance for Employers

With changes to Paternity Leave and Pay, employers need to know what to do. Even though HMRC’s PAYE payroll software will be updated by the 6th of April, 2024, employers may face the issue of babies born before this date. They’ll need to work out how to get back any payments made for Paternity Leave under the new rules before the software is updated. This means they’ll need to plan carefully and take action to follow the rules.

Claiming Repayment

If employees take Paternity Leave before the 6th of April, 2024, employers can recoup the money they paid, whether it was one long period or two shorter ones. Also, small and medium-sized businesses that are struggling financially can ask for an advance payment to cover these costs.  Businesses can then focus on their employees’ well-being without worrying about money.

Benefits for Families and Employers

So, what does all of this mean for families and employers? It means that new parents receive an added layer of flexibility and support during a challenging period of adjustment. By being able to split Paternity Leave into separate parts and with reduced notice requirements, families can better juggle the demands of work and caring for their new arrival. This flexibility can significantly ease the stress and pressures of balancing work and family responsibilities.

For employers, these changes demonstrate a commitment to prioritising the well-being of their workforce. By providing clear guidance on navigating these changes, employers show they value their employees’ needs and are willing to support them during important life events. This can create a positive work environment and contribute to employee satisfaction and loyalty. Overall, these changes benefit both families and employers by promoting a healthier work-life balance and creating a more supportive workplace culture.

Building a More Inclusive and Supportive Society

The 2024 Paternity Leave and Pay changes benefit everyone involved. With these amendments, dads and partners gain increased flexibility in managing their time, allowing them to be more present for their families during important moments. Meanwhile, employers benefit from streamlined processes that make it easier to support their employees through big life events. This demonstrates a genuine commitment to encouraging a healthy work-life balance and ensuring families receive the support they need.

Ask an Expert

To find out more about the new Paternity Leave and Pay changes, reach out to us on 01603 630882 or fill out our online form. Our expert team will be happy to help you get the ball rolling. Let’s ensure families and employers reap the rewards of these positive updates. Start your journey to increased flexibility today.

Related news and events

Payroll
Payroll

19 February 2024

Salary Sacrifice Arrangements for Employers Explained

Payroll

2 February 2024

Navigating HMRC’s Latest Off-Payroll (IR35) Compliance Guidelines

Payroll

18 January 2024

Understanding The Latest National Insurance Contributions (NICs) Rate Cuts

Visit google

Google Reviews

reviews

Salary Sacrifice Arrangements for Employers Explained

We’re diving deep into the world of salary sacrifice arrangements. If you’ve ever wondered what they are, how they work, and what benefits they can bring to your business, you’ve come to the right place. Salary sacrifice arrangements can be a great tool to attract and retain talent, all while saving you and your employees some money. 

What is a Salary Sacrifice Arrangement?

In simple terms, it’s an agreement between you as an employer and your employees to exchange part of their cash pay for non-cash benefits. These non-cash benefits include things like childcare vouchers, pensions, or even cycle-to-work schemes. The key here is that employees willingly agree to this arrangement.

How to Set Up a Salary Sacrifice Arrangement

To set up a salary sacrifice arrangement, you’ll need to change the terms of your employee’s employment contract. This change should be made clearly, and your employee must consent to it. It’s important to note that a salary sacrifice arrangement should never drop an employee’s cash earnings below the National Minimum Wage (NMW) rate. As an employer, it’s your responsibility to ensure this doesn’t happen and to cap salary sacrifice deductions if needed.

When to Alter a Salary Sacrifice Arrangement

Life happens, and circumstances change. Sometimes, you might need to adjust a salary sacrifice arrangement due to life events like marriage, divorce, or changes brought about by unforeseen events like the COVID-19 pandemic. These changes can affect an employee’s financial situation, and salary sacrifice arrangements can be flexible enough to adapt to these circumstances. Always remember to update the employment contract when changes happen.

Exceptions and Considerations

While flexibility is great, there are some rules to follow. If employees constantly switch between cash earnings and non-cash benefits, the expected tax and National Insurance contribution advantages may not apply. But, there are exceptions to this, detailed in the Employment Income Manual 42755.

Calculating the Impact on Tax and National Insurance Contributions

One of the key aspects of salary sacrifice arrangements is understanding their impact on taxes and National Insurance contributions. This depends on the mix of cash and non-cash benefits within the arrangement. For the cash part, make sure you’re correctly operating the PAYE system through your payroll.

For non-cash benefits, you’ll need to calculate their value. If it’s a new salary sacrifice arrangement, calculate the value by using the higher amount of salary given up or the earnings charge under the usual benefit-in-kind rules. It’s worth noting that some non-cash benefits, like pension scheme contributions and workplace nurseries, are exempt from valuation and reporting.

Reporting Requirements

Reporting non-cash benefits differs from cash earnings. Generally, you’ll need to report benefits to HMRC at the end of the tax year using the end-of-year expenses and benefits online form. Plus, you can use the payrolling benefits and expenses online service to show that you’re collecting taxes and benefits through your payroll.

Consulting with HMRC

If there’s any legal uncertainty or you’re unsure about a particular salary sacrifice arrangement, you can contact HMRC’s clearance team.  Bear in mind that HMRC won’t comment on a proposed arrangement before it’s implemented. To keep HMRC happy, be prepared with evidence of the variation of terms and conditions, payslips before and after the variation (if there’s a written contract), and any other relevant documentation.

Examples of Salary Sacrifice

To make things more tangible, let’s look at a few examples. 

  • Employee A sacrifices £50 of their £350 weekly salary for childcare vouchers of the same value. In this case, only £300 is subject to tax and National Insurance contributions, as childcare vouchers are exempt up to a limit of £55 per week.
  • Employee B sacrifices £100 of their £350 weekly salary for childcare vouchers. Here, £295 is subject to tax and National Insurance contributions, and £45 is reported as a non-cash benefit at the end of the tax year.
  • Employee C receives a £5,000 bonus and decides to sacrifice the full amount for an employer contribution to a registered pension scheme. In this case, no employment income tax or National Insurance contributions are charged to the employee, and the total amount goes into the pension fund.

Other Considerations

Remember, salary sacrifice can affect various aspects of your employees’ financial lives. This includes earnings-related payments, benefits, contribution-based benefits, statutory payments, and workplace pension schemes. Always communicate any changes clearly to your employees so they understand the impact on their finances.

Unlocking mutual benefits

Salary sacrifice arrangements can be a win-win for both employers and employees. They offer flexibility, potential tax benefits, and the chance to provide valuable non-cash benefits to your team. It’s important to navigate these arrangements carefully, following legal guidelines and ensuring employees’ cash earnings stay above the National Minimum Wage. With the right approach and communication, salary sacrifice arrangements can be a valuable tool in your organisation’s toolkit. 

Get expert guidance 

If you want to explore the benefits of salary sacrifice arrangements for your business and discuss your options, get in touch today by calling us on 01603 630882. You can also fill out our online form to get started. Let’s improve your employee benefits and financial flexibility together.

Related news and events

Payroll
Payroll

3 April 2024

How the 2024 Paternity Leave and Pay Amendments Benefit UK Families and Employers

Payroll

2 February 2024

Navigating HMRC’s Latest Off-Payroll (IR35) Compliance Guidelines

Payroll

18 January 2024

Understanding The Latest National Insurance Contributions (NICs) Rate Cuts

Visit google

Google Reviews

reviews

Navigating HMRC’s Latest Off-Payroll (IR35) Compliance Guidelines

If you find dealing with tax laws overwhelming, especially with all the changes happening, you’re not alone. Therefore, we’re committed to making tax matters more manageable for you. The introduction and reform of the off-payroll working rules, commonly known as IR35, have added a layer of challenges to the mix. Luckily, HMRC’s Guidelines for Compliance (GfC) aim to help you understand and implement these rules. To help you, this blog explores the essentials of these guidelines. We’ll also share some insights to ensure your business remains compliant while keeping things running smoothly.

Understanding the Scope and Purpose of IR35

IR35 can sound like a mouthful, but it’s all about ensuring workers who provide their services through intermediaries like personal service companies or partnerships pay the correct taxes and National Insurance contributions. These rules mainly affect medium and large-sized clients in the private and public sectors.

Who Should Be Concerned?

If you’re a client or employer operating these off-payroll working rules, or you hire workers through personal service companies, limited companies, or partnerships, this concerns you. It’s also relevant for agencies in the supply chain and professional bodies advising clients on these rules.

Why Comply?

Compliance is more than just following the rules. It’s about understanding the legislation to make sure your business stays on the right side of the law and runs efficiently and ethically.

Three Key Components of the Guidelines

  1. Preparing and Making Status Determinations: One of the big things with IR35 is correctly identifying and classifying workers. The guidelines stress the importance of preparing for and making accurate status determinations for off-payroll workers. This means figuring out if a worker should be considered employed or self-employed for tax purposes, based on their situation.
  1. Collaboration in the Supply Chain: Working together is important for compliance. All entities in the supply chain need to share information and understand their responsibilities, especially when it comes to identifying workers covered by the off-payroll working rules.
  1. Systems and Processes for Compliance: The guidelines offer examples of systems and processes that can help you avoid errors when determining a worker’s status. This includes understanding different scenarios and organisational structures that may fall under IR35.

Practical Steps for Compliance

  • Use these guidelines alongside existing off-payroll working guidance to get the full picture.
  • Tailor your approach to your organisation’s unique situation and scale in off-payroll working engagements.
  • By following these guidelines diligently, your organisation can significantly reduce the risk of errors and, consequently, the likelihood of incurring penalties.

Understanding Your Responsibilities

  • For Medium and Large-Sized Clients: If you’re in this category, you’re responsible for determining the employment status for tax purposes of workers who provide services through intermediaries.
  • Issuing Status Determination Statements: When a worker falls under the IR35 rules, you must clearly communicate this decision via a status determination statement, giving clear reasons for your determination.
  • Handling Taxes and Contributions: If a worker is considered employed for tax purposes under IR35, you’ll need to handle the deduction of Income Tax and employee National Insurance contributions. Also, you’ll have to pay employer National Insurance contributions and, if applicable, the Apprenticeship Levy.

New Policy Change: Opportunity to Pause Settlement

There’s some good news, as, from the 6th of April, 2024, HMRC will let organisations with open compliance checks under IR35 offset taxes already paid by workers or intermediaries against what’s owed. This applies to Income Tax and National Insurance contributions assessed since the 6th of April, 2017, for off-payroll working errors.

Implications for Your Organisation

You can consider pausing the settlement of your open compliance check until after the 6th of April, 2024, under specific conditions. This includes acknowledging an error and agreeing on the gross liability. Providing HMRC with the necessary information is important.

Proceeding with Compliance Checks

HMRC will keep doing compliance checks as usual, but you can opt to pause the settlement. However, it’s advisable to make a payment on account to avoid accruing statutory interest.

Achieving Ethical Compliance with HMRC’s Off-Payroll Rules

Navigating HMRC’s off-payroll working rules might seem daunting, but it’s all about understanding the law, having a solid plan, and doing business responsibly. By following these guidelines, your organisation not only complies with the law but also sets an example of ethical business conduct. Remember, compliance isn’t just a legal obligation; it’s a mark of a forward-thinking and responsible business.

Seek Guidance 

If you’re ready to take the first step toward seamless compliance and ethical business practices, embrace HMRC’s off-payroll working rules today. Still have questions? Reach out to us on 01603 630882 for help or advice. 

Related news and events

Payroll
Payroll

3 April 2024

How the 2024 Paternity Leave and Pay Amendments Benefit UK Families and Employers

Payroll

19 February 2024

Salary Sacrifice Arrangements for Employers Explained

Payroll

18 January 2024

Understanding The Latest National Insurance Contributions (NICs) Rate Cuts

Visit google

Google Reviews

reviews

How Can Employers Get Tax Relief on Employee Pension Contributions

Employers play an important role in the financial security of their employees for later in life through pension contributions. Not only do these contributions help in building a robust retirement fund for employees, but they also offer employers valuable tax relief opportunities. Let’s look at how, as an employer, you can get tax relief on your employee pension contributions. 

Understanding the Two Main Methods

The UK tax system provides two primary methods for getting tax relief on employee pension contributions:

1. Net Pay Arrangement (NPA): In this approach, employers deduct pension contributions before applying PAYE (Pay As You Earn). This method is straightforward for employees, as they receive tax relief at their marginal rate of income tax without needing to take any extra steps. For employees, this translates into immediate tax relief, effectively lowering their taxable income.

2. Relief at Source (RAS): Differing from NPA, this method involves deducting contributions after PAYE. The pension scheme provider then claims back the basic rate tax relief from HMRC, adding this amount to the individual’s pension pot. However, for higher or additional rate taxpayers a further claim must be made to HMRC to receive the full tax relief due. This can be done through their tax code or a Self-Assessment tax return.

Which Method to Choose?

The choice of tax relief method is determined by the employer, not the individual employee. For all new registered pension schemes set up since April 2006, Relief at Source has been the default method. Employers, however, have the flexibility to choose the Net Pay Arrangement for new pension schemes, provided certain regulatory conditions are met. Once a scheme is registered, its form of tax relief remains fixed​​.

Salary Sacrifice Schemes

Many businesses choose the salary sacrifice arrangement linked to pension contributions. Under this arrangement, the employee agrees to a reduction in their salary in exchange for the employer making a higher pension contribution. This method effectively mirrors the Net Pay Arrangement in terms of tax relief. The good news is It can lead to savings on National Insurance contributions for both the employer and the employee.

However, it does require employers to be diligent in their reporting. If a salary sacrifice contribution is reported incorrectly as an employee contribution, it could lead to the pension scheme provider wrongly claiming tax relief from HMRC. The legal responsibility for any overclaimed relief falls on the pension scheme provider, emphasising accurate and careful reporting by employers​​.

Compliance and Reporting Obligations

To benefit from tax relief, employers must ensure their pension contributions satisfy several conditions. These include being paid within the accounting period and being wholly and exclusively for the business. What’s more, the amount of tax relief on substantial contributions may be distributed over several tax years, depending on the size of the contribution and the employer’s financial situation.

Employers are required to accurately report both their own and their employees’ pension contributions. Incorrect reporting can lead to compliance issues and potential penalties, highlighting how important good record-keeping and reporting practices are.

Maximising Tax Relief Benefits

For employers, understanding and properly managing pension contributions can lead to a sizeable tax relief. This relief can significantly reduce the overall cost of providing a pension scheme. Employers should consider the following strategies:

  • Choosing the Right Pension Scheme: Choose a pension scheme that aligns with your payroll system and is suitable for your employees’ tax situations.
  • Leveraging Salary Sacrifice Arrangements: Use salary sacrifice schemes to maximise tax and National Insurance savings.
  • Staying Informed: Keep up to date with changes in tax legislation and pension regulations to ensure you remain compliant and can make the most of the tax relief opportunities available. 

Final Thoughts

For employers, providing a pension scheme is a big part of employee benefits, offering a way for employees to plan for the future. By understanding the methods of Net Pay Arrangement and Relief at Source and sticking to reporting and compliance requirements, you can leverage tax relief opportunities and make sure you don’t pay more tax than you need to. 

At Norwich Accountancy, we’re here to help SMEs like yours make the most out of pension schemes and tax benefits. Tax rules can be tricky, especially with constant changes, but we’re here to guide you. Need help? We’re all about keeping things simple and helping you get every tax relief benefit you’re entitled to.

Related news and events

Payroll
Payroll

3 April 2024

How the 2024 Paternity Leave and Pay Amendments Benefit UK Families and Employers

Payroll

19 February 2024

Salary Sacrifice Arrangements for Employers Explained

Payroll

2 February 2024

Navigating HMRC’s Latest Off-Payroll (IR35) Compliance Guidelines

Visit google

Google Reviews

reviews

Guidance on Rates and Thresholds for Employers from 2023 to 2024

Understanding tax codes, National Insurance contributions, and statutory payments is a crucial element in your role as an employer. It’s also vital to know the updated thresholds and rates set by HMRC to ensure accurate payroll management and tax compliance. To help, we’ve collated seven of the essential rates and thresholds for the 2023-2024 financial year.

1. Income Tax

The personal allowance, the amount of income you don’t have to pay tax on, remains a key figure.

  • Personal Allowance: £12,570
  • Basic rate (20%): For incomes over the personal allowance up to £37,700
  • Higher rate (40%): For incomes over £37,771 up to £125,140
  • Additional rate (45%): For incomes over £125,140

2. National Insurance Contributions (NICs)

You can only make National Insurance deductions on earnings above the lower earnings limit.

NICs thresholds:

  • Lower Earnings Limit: £123 per week.
  • Primary Threshold: £242 per week.
  • Secondary Threshold (ST): £175 per week.
  • Upper Earnings Limit (UEL): £967 per week.

Find the employee contribution rates here

Employer NIC 

You pay secondary contributions (employer’s National Insurance) to HMRC as part of your PAYE bill. 

  • Class 1: For employees earning above the Secondary Threshold, the rate remains at 13.8%.

3. Statutory Payments

Statutory Sick Pay (SSP):

The same SSP rate applies to all employees. However, the amount you pay depends on the number of ‘qualifying days’ they work each week.  Calculate your employee’s statutory sick pay here.

Statutory Maternity Pay (SMP), Paternity, Adoption, and Shared Parental Pay:

  • First 6 weeks: 90% of the employee’s average weekly earnings.
  • Remaining weeks: £172.48 or 90% of the employee’s average weekly earnings, whichever is lower.

4. Student Loan Deductions

If your employees’ earnings are above the earnings threshold, you must record their student loan and postgraduate loan deductions in your payroll software. It will automatically calculate and deduct repayments from their pay. There are several plans for student loan repayments:

  • Student loan plan threshold 1: £22,015 annually, threshold 2: £27,295 annually or threshold 4: £27,660 annually. Deduction rate: 9% on earnings above the threshold.
  • Postgraduate loan plan threshold: £21,000 annually. Deduction rate: 6% on earnings above the threshold.

5. Pension Contributions

Automatic enrolment obliges employers to enrol all workers into a qualifying workplace pension, provided that they ordinarily work in Great Britain and satisfy the age and earnings criteria.

Auto-enrolment thresholds:

  • Qualifying earnings band:
    • Lower level: £6,240 annually.
    • Upper level: £50,270 annually.

Minimum contribution rates:

  • Total minimum: 8% of qualifying earnings.
    • Employer’s minimum contribution: 3%.
    • Employee’s contribution: 5%.

6. Apprenticeship Levy

Employers with an annual pay bill of over £3 million are liable to pay.

  • Rate: 0.5% of the total pay bill.
  • Allowance: £15,000 annual allowance to offset against the levy payment.

7. Minimum Wage

The National Minimum Wage is the minimum pay per hour almost all workers are entitled to by law. 

From 1 April 2023, the minimum wages are:

  • Aged 23 and above (national living wage rate: £10.42
  • Aged 21 to 22: £10.18
  • Aged 18 to 20: £7.49
  • Aged under 18 (but above compulsory school leaving age) £5.28
  • Apprentices aged 19 and over but in the first year of their apprenticeship: £5.28

How Can I Find Out More?  

The government website should have the most up-to-date rates and thresholds. 

Find out detailed information on all the above and more here.

Understanding the details needn’t be daunting. If you ever feel lost, remember: Your business is our business, and we’re always here to lend a friendly ear and a helping hand. 

*All figures are correct at October 2023 and subject to change

Related news and events

Payroll
Payroll

3 April 2024

How the 2024 Paternity Leave and Pay Amendments Benefit UK Families and Employers

Payroll

19 February 2024

Salary Sacrifice Arrangements for Employers Explained

Payroll

2 February 2024

Navigating HMRC’s Latest Off-Payroll (IR35) Compliance Guidelines

Visit google

Google Reviews

reviews

An Employers Guide to Statutory Maternity Pay

As employers, understanding the complexities of Statutory Maternity Pay (SMP) is crucial not just for compliance, but also for supporting the well-being of your employees. In the UK, maternity rights have long been at the forefront, and the recent introduction of the Protection from Redundancy (Pregnancy and Family Leave) Act 2023 has further highlighted why it’s so important. This guide aims to help you navigate the basics of SMP and provide insight into the new 2023 Act.

What is Statutory Maternity Pay (SMP)?

SMP is a weekly payment that eligible pregnant employees can claim when they take time off to have a baby. It’s a legal requirement for employers to provide this to qualified employees.

SMP is divided into two parts: ordinary maternity leave, followed by additional maternity leave. Each lasts 26 weeks, meaning eligible employees can take up to 52 weeks of maternity leave. By law, employees must take at least two weeks after the birth (or four weeks if they’re a factory worker)

Who’s eligible for SMP?

While all employees with a contract are entitled to Statutory Maternity Leave, to be eligible for SMP, an employee must:

  • be on your payroll in the ‘qualifying week’ – the 15th week before the expected week of childbirth
  • give you the correct notice
  • provide proof they’re pregnant
  • have been continuously employed by you for at least 26 weeks up to any day in the qualifying week
  • earn at least £123 a week (gross) in an 8-week ‘relevant period’

Some employment types,  like agency workers, directors and educational workers, have different rules for entitlement. Find out more here.

How much is SMP?

SMP is paid for up to 39 weeks:

  • For the first six weeks: 90% of the employee’s average weekly earnings (AWE) before tax.
  • For the next 33 weeks: £172.48* or 90% of their AWE (whichever is lower).

How do I calculate SMP?

Calculating SMP can be tricky, especially if the employee’s earnings are not consistent. The key is to calculate the Average Weekly Earnings. This generally involves working out the gross earnings over a specific 8-week period leading up to the 15th week before the baby is due.

If in doubt, use the Gov.UK’s maternity, adoption and paternity calculator for employers. Find the calculator here.

How and when to pay SMP?

SMP should be paid in the same way and at the same time as you would pay salaries, i.e., monthly or weekly. It’s subject to tax and National Insurance in the same way as wages.

Can I reclaim SMP?

Yes, you can usually reclaim 92% of SMP payments. If you qualify for Small Employers’ Relief you can reclaim 103%. Your business qualifies for this relief if the total SMP you paid in the tax year is less than £45,000.

The Protection from Redundancy (Pregnancy and Family Leave) Act 2023

The introduction of the 2023 Act has made waves in the realm of employment rights. Here’s what you need to know:

Purpose of the Act

The Act primarily aims to bolster protections for pregnant employees and those on family-related leave (like maternity or paternity leave) from redundancy. It stems from a recognition that these employees often face vulnerabilities in the workplace and aims to create a safer, more supportive environment.

Key Provisions

Though we’re still waiting for the regulations to bring the full proposals into effect, the Act’s core principle is clear: employers cannot make employees redundant during their pregnancy, maternity leave, or during a six-month protective period after the end of their maternity leave, unless in exceptional circumstances.

Implications for Employers

  1. Review Redundancy Protocols: Ensure your redundancy procedures comply with the new law. Redundancies involving pregnant or new mothers should be treated with extreme caution and sound justification.
  2. Training: Make sure your HR and management teams are fully briefed on the new legislation to prevent inadvertent breaches.
  3. Document Decisions: Always document decision-making processes, especially when it concerns redundancies. In any disputes, having a clear paper trail will be invaluable.
  4. Open Communication: Keep lines of communication open with your employees. Clear understanding and transparency can prevent misunderstandings and foster trust.

Informed and in the know

Navigating the world of Statutory Maternity Pay and the new 2023 Act might seem daunting. But with a clear understanding and proactive approach, it’s entirely manageable. If you’re unsure how the maternity law changes will affect you or your business, or if you’ve any further questions, it’s a good idea to speak to an employment law specialist. As always, promoting a supportive and understanding workplace culture will go a long way in ensuring the well-being of your employees and the smooth operation of your business.

Stay tuned for more updates on the regulations of the 2023 Act, and for any further assistance or accounting needs, don’t hesitate to get in touch.

*figures are subject to annual changes. For current figures, take a look here

Related news and events

Payroll
Payroll

3 April 2024

How the 2024 Paternity Leave and Pay Amendments Benefit UK Families and Employers

Payroll

19 February 2024

Salary Sacrifice Arrangements for Employers Explained

Payroll

2 February 2024

Navigating HMRC’s Latest Off-Payroll (IR35) Compliance Guidelines

Visit google

Google Reviews

reviews

A Guide to the New Employment Laws in 2023

The UK’s employment law landscape is constantly evolving, and 2023 so far has been no exception. New laws and regulations regarding employment aiming to protect workers’ rights, promote diversity and offer better working conditions have been passed with some coming into effect in 2023 and others in 2024. So, what are the main changes, and how could they affect you?

Key changes to UK employment laws

Here are five of the notable changes you should be aware of:

  1. Increased flexibility for employees

The pandemic changed how we work, and the government responded by introducing a framework around remote working and requiring employers to discuss and document remote work policies. 

With effect from 1 April 2023, employees now have the right to request flexible working from day one of employment. This removes the existing 26-week qualifying period. Employers will also be required to respond to a flexible working request within 2 months and consult with employees before rejecting it if that’s the decision.

  1. Enhanced protection for pregnant women and new parents. 

The Protection from Redundancy (Pregnancy and Family Leave) Bill 2023 came into force on 24th July 2023, and the regulations needed to bring the proposals into effect are working their way through Parliament. 

Whilst we don’t know yet when the government will make the changes they’ve talked about, the Act will enhance redundancy protection for pregnant workers and working parents returning to the workplace after family-related leave. The Bill will include the right to be offered a suitable alternative vacancy and to be consulted on any redundancy plans.

  1. New rights for carers. 

The Carers’ Leave Act 2024 was passed on 24th May 2023 and gives employees the right to take unpaid time off work to provide or arrange for the care of a dependant with a long-term care need. The Bill introduces a statutory entitlement of five days of unpaid leave per calendar year which will be available to eligible employees from the first day of their employment. The Act is expected to come into force in 2024 and will be a significant step forward for carers who currently have very few legal rights in the workplace.

  1. Increased pay for statutory leave. 

From 2 April 2023, the statutory rate of pay for maternity, paternity, adoption, shared parental and parental bereavement leave increased from £156.66 to £172.48 per week. This is a welcome increase for employees taking statutory leave and helps to ensure they’re not financially worse off when on leave.

  1. Update of statutory redundancy pay calculations.

New limits on employment statutory redundancy pay came into effect on the 6th of April. The result means that employers that dismiss employees for redundancy must pay those with two years’ service an amount based on the employee’s weekly pay, length of service and age. 

Informed and in the know

Whilst there are other changes to the UK’s employment laws going through Parliament, these five are important ones to be aware of. It’s in your best interest to know what they mean to make sure you know what you’re entitled to as an employee or what you need to comply with as an employer. 

If you’re unsure how the new employment law changes will affect you or your business, or if you’ve any further questions, it’s a good idea to speak to an employment law specialist. And with some of these changes impacting pay and salaries, we can help give you peace of mind when it comes to payroll.

Related news and events

Payroll
Payroll

3 April 2024

How the 2024 Paternity Leave and Pay Amendments Benefit UK Families and Employers

Payroll

19 February 2024

Salary Sacrifice Arrangements for Employers Explained

Payroll

2 February 2024

Navigating HMRC’s Latest Off-Payroll (IR35) Compliance Guidelines

Visit google

Google Reviews

reviews

Understanding the P11D and What to Include to Meet the July Deadline

Tax and filling in forms go hand in hand. If you’re an employer and your employees receive taxable benefits in kind, then you need to know about the P11D as it must be completed by the 6th of July each year.

The important P11D sections to complete

There are different sections in the P11D form to complete in full. The most important sections include:

  • Section 1: employee details. This section includes the employee’s name, address and National Insurance number.
  • Section 2: benefits in kind. This section lists all the benefits the employee has received during the tax year.
  • Section 3: calculation of taxable benefits. This section calculates the amount of tax due on the employee’s benefits.
  • Section 4: employer’s declaration. This section must be signed by the employer to confirm the information on the P11D is correct.

If you’re an employer, you must complete the P11D form correctly and on time. If not, you could be hit with a fine from the HMRC.

Tips for completing the P11D

Here are our top tips for completing the P11D form:

  • Start early. Don’t wait until the last minute to complete the P11D form. Give yourself plenty of time to gather all the information you need.
  • Use the right version. There are different versions of the P11D form depending on the type of business. So, make sure that you use the right version for your business.
  • Check your work. Once you’ve filled in the P11D form, check it then check it again.
  • Submit the form on time. Always submit the P11D form to HMRC by the 6th of July each year to avoid penalties.

P11D extra tips

  • Keep good records. Keep all the information needed to complete the P11D form, such as receipts, invoices and contracts.
  • Use a payroll software program. This helps you calculate the tax due on your employees’ benefits.
  • Get help from a professional. If you’re unsure how to complete the P11D form, always get help from a qualified accountant or tax adviser.
  • We’re here to help make sure you file your P11D right the first time, on time. So before the deadline rolls around again next year, get in touch to find out more.

Related news and events

Payroll
Payroll

3 April 2024

How the 2024 Paternity Leave and Pay Amendments Benefit UK Families and Employers

Payroll

19 February 2024

Salary Sacrifice Arrangements for Employers Explained

Payroll

2 February 2024

Navigating HMRC’s Latest Off-Payroll (IR35) Compliance Guidelines