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HMRC delays RTI late filing penalties

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From 6th October 2014, HMRC introduce automated penalties for late in-year filing of RTI submissions. However, there is now a respite for small employers as HMRC have delayed these new penalties for employers with fewer than 50 employees until 6th March 2015. HMRC have sent electronic messages to all employers telling them when the penalties will apply to them, based on the number of employees shown on the Revenue’s records.

In the run up to March 2015, in addition to financial penalties, HMRC have said it will examine other ways to encourage employers to comply, although it has given no indication as to what these could be. The size of the penalties depend on the number of employees in the PAYE scheme: 1 to 9 will attract £100, 10 to 49 £200, 50 to 249 £300 and 250 or nore £400. HMRC has issued a downloadable helpsheet on penalties for late filing of PAYE in RTI.

If you do submit a late RTI submission, you must now include a late reason, which your payroll software should offer you.

New National Minimum Wage Rates

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From 1st October 2014 the National Minimum Wage rates are increasing. Please ensure you review and amend the rates for your employees from this date.

The hourly rate for employees under 18 years of age increases from £3.72 to £3.79 per hour

The hourly rate for employees between 18 to 20 years of age increases from £5.03 to £5.13 per hour

The hourly rate for those employees aged 21 and over increases from £6.31 to £6.50 per hour

The hourly rate for apprentices increases from £2.68 to £2.73 per hour
The apprentice rate is for those aged 16 to 18 and those aged 19 or over who are in their first year.

Automatic Enrolment Costs

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A recent survey of employers being asked if they have encountered additional costs in respect of the new automatic enrolment responsibilities has revealed that the potential financial burden incurred could prove to be sizeable. More than 43% said they had faced additional costs with almost a quarter saying they needed additional resources. The expenses incurred by several employers was significant, with upgraded payroll software being the biggest cause of additional expenditure.

Interestingly, all the individual middleware costs identified were all higher than any of the individual payroll software costs. What the survey was unable to show was whether the payroll costs were ‘one off’ to purchase upgraded modules to the payroll software, and how these compare to annual charges by the middleware companies. It is important to note that most middleware systems still require data from a payroll system. However, additional resource costs, especially to prepare for the introduction of auto enrolment, were also significant with one employer reporting that they spent £50,000 on additional resource.

It will be interesting in a year’s time to see the comparison between the one-off costs of upgrading payroll software against the on-going cost of middleware as the survey results this time show much lower costs for payroll software compared to middleware.

Flexible Working: New Rules

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From 30th June 2014 the right to request flexible working has been extended to all employees. Until now, this right only applied to the parents of children under 17 or 18 in the case of parents of disabled children or those caring for an adult.

All employees have a statutory right to ask their employer for a change in their contractual terms and conditions of employment to work flexibly provided they have worked for their employer for 26 weeks continuously at the date the application is made. An employee can only make one request in any 12 month period. Employers might consider introducing a policy for handling requests to work flexibly, making it clear to both employee and employer what the procedure should be. Requests by employees to working flexibly should be made in writing stating 3 things:

* specifying the change the employee is seeking and the date they want the changes to happen
* what effect they think the change would have on the employer and how, in their opinion, any such effect might be dealt with
* that this application is a statutory request

Employees requests must be considered objectively and an employer can only refuse them if there are business reasons for doing so, such as if it will have a detrimental impact on performance, quality, the ability to meet customer demand or the burden of additional costs to the employer. There are however benefits to flexible working for both the employee and the employer:
* improved morale
* reduced absence levels
* increased productivity
* increased loyalty
* retention of valuable workers
* employee satisfaction
* workforce flexibility

For more guidance , here are 2 helpful guides from ACAS:

RIGHT TO REQUEST GUIDE

HANDLING A REQUEST

Holiday Entitlement

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With summer fast approaching, your staff will be booking their summer holidays and wanting to receive their holiday pay, so here are the basic facts for statutory holiday entitlement.

* Workers have the right to get paid leave; accrue holiday entitlement during sick, maternity or paternity leave; choose to take holiday at the same time as sick leave
* Most workers are legally entitled to 5.6 weeks paid holiday. Employers can include bank holidays as part of statutory annual leave.
* 5 day week workers must receive 28 days paid holiday. (5 days multiplied by 5.6 weeks)
* Part time workers are also entitled to 5.60 weeks paid holiday, but this may equate to less days per year if they work less days; working a 3 day week would equate to 16.8 days for example.
* Employees working irregular hours will need to calculate their holiday entitlement for irregular hours here
* Annual leave begins to accrue as soon as an employee starts their job. If a worker starts or leaves part way through a holiday year, their entitlement must be pro rated accordingly. Use the
holiday calculator here
* Employees who get 28 days annual leave can carry over up to a maximum of 8 days into the next holiday year.
* Shift workers or casual workers’ holiday pay should be calculated on an average of their last 12 weeks pay.
* Employers can choose to offer more leave than the legal minimum. If they do, they don’t have to apply all the rules that apply to statutory leave to the extra leave.