Feature insight - keeing the UK paid
Tax and social security The UK has a rigid tax and social security structure. Values are deducted based on the tax code of an employee. Since the introduction of RTI (real time information), data is sent to HM Revenue & Customs (HMRC) each payroll run to provide up-to- date records of earnings levels. Submissions must be made by the date set date or fines can be levied. Deductions are then credited to HMRC by 22nd of the following month. Following the end of the financial year: each employee must receive by 31 May a P60 certificate, outlining earnings for the year; and any P11D returns must be submitted to HMRC with content copied to employees by 6 June. The amount of class 1A National Insurance contributions due is reported in a P11D(b) return to HMRC by 6 June, and payment made to HMRC by 22 July. To those reading their P60 certificate or P11D return it is hard to imagine what had gone into the preparing and issuing of them, but for those in the payroll department they are the final points of a highly challenging process that must happen, regardless, to keep employees in the UK paid and a business legal. n
only been one significant change to UK employee leave entitlements, and this is the introduction of shared parental leave. Until recently, a woman was entitled to 52 weeks’ leave and a man to just two, irrespective of circumstances. Now parents can share the 52 weeks as they choose, the only caveat that they must be full weeks. The payment element remains 90% of a parent’s average weekly earnings for the first six weeks, then 33 weeks at circa £145 per week (which changes annually). The remaining 13 weeks are ‘leave only’, with no payment being due. Many employers operate a company maternity scheme where payments are topped up an agreed amount. ● Annual leave – The current minimum is 5.6 weeks’ holiday a year, pro rata. The eight UK bank holidays are included. Additional days are often added, either as an attraction to join, based on length of service or as option to buy under flexible benefit programmes. Holiday pay has always been paid on the standard day rate, but recent guidance suggests if an employee consistently works as overtime this should be factored
into their holiday pay. ● Sick leave – All employees are entitled to up to 26 weeks’ statutory sick pay (SSP), provided they meet requirements including length of service and minimum earnings criteria. Many organisations have a sick scheme that ‘tops-up’ SSP for several weeks. ...a highly challenging process that must happen, regardless, to keep employees in the UK paid... ● Pension and retirement – As mentioned above, there are minimum pension requirements. These have the potential to challenge payroll teams in the event employees are in a pension scheme, but no longer pay the minimum percentage.
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| Professional in Payroll, Pensions and Reward |
Issue 53 | September 2019
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