COMPLIANCE
Simon Parsons MSc FCIPPdip, director of UK compliance strategies, SD Worx and the honorary chair of the BCS (the Chartered Institute of IT) Payroll Specialist Group (PSG) has worked in payroll software development for over 35 years, and here he lays out some of the preparations, challenges and processes in updating payroll software in readiness for the new tax year
T he BCS PSG is a membership of payroll software developers, and the group regularly meets with government representatives from HM Revenue and Customs’ (HMRC’s) payroll software developers support team, often referred to as SDST. When Simon started in payroll software development, the Inland Revenue and the Department of Health and Social Security were separate. Once HMRC formed, most changes to payroll were communicated by the distribution of ‘Notes for Computer Software Developer’ . The days of these guides acting as a single combined information source on the updates required are over. Now legislative change is issued in separate communications, requiring collection and assessment, followed by: l development l testing l documentation creation l communications l distribution l implementation. Challenging times The past few years have seen significant challenges for the software community. With political challenges and unrest, plus the impact of the global pandemic, there have been significant delays in the confirmation of changes to details. The steadiness of prime ministers and chancellors hasn’t been present. The
pattern of Brexit, elections, Covid-19 and four prime ministers has resulted in delays and later notification of changes. Not all payroll software is in the cloud, some remain distributed as specific release updates, and many of the enterprise employers may have particularly tailored solutions. Tax year 2022/23 has seen three significant changes to the calculation of National Insurance contributions (NICs): the introduction and then withdrawal of significant change. The health and social care levy has gone. The recent introduction of off-payroll working rules was announced as being withdrawn, and then the withdrawal was cancelled. As a result, the software developer community actively look out and monitor the intentions of governments (including devolved), to identify change which must be captured and analysed, with impacts on employers and software assessed. Timing of The pattern of Brexit, elections, Covid-19 and four prime ministers has resulted in delays and later notification of changes
information availability is key, and this has been a challenge over recent years. Compliance with change Moving on to the areas of legal change payroll software developers focus on, there are three main elements: l those which regularly change in what may seem like a pattern l the items being introduced l the challenges of employer choices, which require configuration settings to be reviewed and potentially revised. There are several areas which must be reviewed annually. We explore these below. Income tax rates and thresholds There are changes to the tax rates and thresholds for what’s termed rUK (rest of the UK: includes England and Northern Ireland). This is often confirmed in the autumn statement, although some announcements may be made in the spring budget. April 2023 will see the reduction of the additional tax rate band, but associated announcements have indicated there may be a frozen state applied until April 2028. National Insurance rates, bands and thresholds uprating Again, we may see some type of freeze, although 2022 has been a rollercoaster of three changes and has also seen the introduction of the concept of blended
| Professional in Payroll, Pensions and Reward | February 2023 | Issue 87 32 | Professional in Payroll, Pensions and Reward
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