FEATURE INSIGHT
Following the rules
Compliance is an important aspect of every payroll professional’s remit and the consequences of getting it wrong can be severe for organisations of all sizes, says Kavitha Sivasubramaniam, freelance writer and editor
P ayroll compliance is an integral organisation’s legal obligations are met and that employees are paid accurately and on time. Employers that flout the rules can face severe financial penalties and reputation teams themselves, it’s not just the fear of significant fines that drives them to strive for perfection. A sense of professional pride is often an important motivational factor when it comes to meeting their duties. “Every payroll professional I’ve ever met has been passionate about accuracy and being compliant, partly of course because of the responsibility they feel towards paying their employees accurately,” says Don Macarthur, former head of employer engagement at HMRC (HM Revenue & Customs) and chief Payroll Assurance Scheme (PAS) assessor at CIPP. With the legal and other compliance landscape constantly changing – and expected to change even more in future – what factors come into play for organisations that want to get it right and how can they avoid costly mistakes? part of any business operation, and the process ensures both that the damage, while internal employee relations can also suffer. For payroll
Policies, procedures and reviews First and foremost, employers must ensure they have the right policies and procedures in place to help them meet their compliance duties. After all, with so many separate compliance tasks facing an employer or bureau – many of which require teamwork or collaboration between teams – you can’t hope to succeed unless you first have the right foundations in place in terms of processes, software, team roles and relationships. ...the right policies and procedures in place to help them meet their compliance duties “Things change so you have to keep abreast of what’s going on commercially and legislatively, for example, with pensions auto-enrolment,” says Alan Fitzgerald, head of payroll at UHB (University Hospitals Birmingham) Payroll Services, which processes more than
100,000 payslips every month for the large university hospital foundation trust as well as several other NHS (National Health Service) organisations. “You have to introduce new processes and look at where you can generate efficiencies. You have to continually review processes to meet your obligations, both within your organisation and for your customers.” Internal and external audits, usually by HM Revenue & Customs (HMRC), can help to identify anything that has gone wrong, often allowing the problem to be addressed fairly quickly. “Reviews are an ongoing evaluation of everything you do,” says Karen Thomson, payroll director at Armstrong Watson, a firm of accountants, business and financial advisers. “In terms of compliance, how do you know you are compliant if you don’t review your learning and development programme or your procedures? I have always believed that if you are going to do a job you should do it right and to the best of your ability.” Getting it right Organisations that are serious about following the rules should ensure they have business, team and personal
| Professional in Payroll, Pensions and Reward | November 2017 | Issue 35 40
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