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Payroll news for employers June 2016

The payroll services team at Clayton & Brewill chartered accountants in Nottingham bring you the latest payroll news for June 2016, including changes to student loan deductions, email alerts from HMRC, and a reminder to plan ahead to get your auto-enrolment pension scheme of choice.

Changes to student loan deductions

For employees with outstanding student loans, there are now two categories of student loan deductions.

In April 2016, a new threshold was introduced for a new type of student loan deduction named Plan Type 2. This new Plan Type 2 threshold is in addition to the existing threshold which is now named Plan Type 1.

It will be important to get the Plan correct from day one of employment as if the wrong Plan is applied it could result in a higher Student Loan deduction.

If a new employee is repaying a student loan you will need to ask which plan type the employee is repaying under; the P45 will only indicate whether a new employee is already repaying a student loan and not the Plan type.

Julie Braithwaite commented:

“As well as asking for the P45, employers should ask every new employee if they have a Student Loan they need to repay and clarify the Plan type.

“The onus is on the student to declare (or find out) the correct one for them. They can find out which plan they are on by contacting the Student Loans Company.”

Have you registered for email alerts from HMRC?

As HMRC moves down the digital road, the days of paper mailings and reminders are numbered. We would encourage all employers to register to receive email alerts so that you are aware of the latest coding changes and other important information.

Register here (you’ll need your PAYE reference handy): http://www.hmrc.gov.uk/gds/payerti/forms-updates/forms-publications/register.htm

Auto-enrolment – don’t ignore your letter from The Pension Regulator!

The Pension Regulator continues to send out letters on a regular basis, informing employers of their ‘staging date’ for the new workplace pension requirements. We are increasingly seeing the problems that can arise from leaving planning till the last minute, particularly if you want to have a choice of pension scheme.

Many of the larger providers are refusing to accept companies at the last minute, plus the schemes can cost a fortune to set up.

Our pension auto-enrolment pages are full of tips and advice and you can find them by clicking here. Alternately, if you’d rather have somebody talk you through the process and your obligations please do get in touch – you can call our auto-enrolment experts on 0115 950 3044 or click here to send us an email.

Sarah Pownall commented:

“If you’ve received a letter from The Pension Regulator or are aware that your staging date is approaching, please do not ignore it! There’s lots you can do – and that we can help you with – to make it a relatively smooth process. If you are unsure of your Staging date, please check this using the Pensions Regulator website. All you will need is the following link and your PAYE reference number. http://www.thepensionsregulator.gov.uk/employers/staging-date.aspx

“Once you know your staging date, a good first step is to assess your workforce so you know which category each employee falls into, how much both your business and employees will be expected to contribute (there are required minimum rates that are set to increase over the coming years) and who is in and out of the scheme. Talk to your fellow directors and discuss the sort of pension scheme you would like to have. You may also need to review your payroll software to ensure it can cope.

“Workplace pensions are now compulsory for employers so it makes sense to plan as much as possible so that you can mitigate the effect on your business.”

Clayton & Brewill has been working with clients on their pension auto-enrolment requirements for over two years and we are skilled at helping employers of all sizes to implement the requirements.

Find out more about your requirements and how we can help you at www.claytonandbrewill.com/payroll/pension-auto-enrolment/