As an outsourced payroll bureau, we understand that navigating the intricacies of payroll can be a daunting task for many businesses.
Each tax year brings its own set of challenges, and our expertise allows us to efficiently address the most pressing concerns that employees and employers face.
In this article, we identify the top three payroll queries that have emerged for us so far this year, we share insights into the practical advice we have offered in response and, in doing so, demonstrate the value and peace of mind that comes with outsourcing your payroll function.
Why has my tax code changed, and what does it mean?
Queries from employees about tax code changes are extremely common, as evidenced in The Chartered Institute of Payroll Professionals’ (CIPP) 2024 Payslip Statistics Survey Report, with 25% of respondents citing this as the most frequent query they receive.
Your tax code can be amended for any number of reasons, but is typically based on the information HMRC receives from your employer about your income.
Benefits, i.e., a company car, an underpayment of tax in the previous tax year, or income from other employment can all have an impact on the tax code that you are issued.
HMRC do not supply employers or payroll bureaus with the breakdown of an individual’s tax code; they simply communicate what tax code needs to be applied to the payroll in any given month. We must apply only this code.
For a better understanding of what makes up your tax code, you can register for an online account with HMRC, but they will also notify you of any changes to your code via a P2 notice in the post.
As an employee, if you think that the information HMRC has about your income could be incorrect, you will need to speak to HMRC directly.
Why have I been re-enrolled into a pension?
Current legislation states that employers must periodically put certain staff who have left a pension scheme by opting out, back into it.
This process, which is designed to encourage people to save for retirement, is called re-enrolment, and must happen every three years.
You will be assessed as eligible and automatically re-enrolled into a pension scheme if you are:
- aged between 22 and up to State Pension Age,
- and earn over £10,000 a year, or £833 a month, or £192 a week.
You retain the same rights as you had in respect of the last enrolment, and you can opt out should you wish to do so.
There is a one-month timeframe during which you can opt out of the scheme you have been re-enrolled into, and receive a refund of the contributions paid in during this time.
You can also choose to leave the scheme at a later date, but if you leave the scheme after the opt out period has ended you will not be entitled to a refund.
Why has the employment allowance stopped?
The Employment Allowance allows employers to reduce their National Insurance liability by up to £5,000 in each tax year.
If you have found that your Employment Allowance has stopped, it could be that you have reached the £5,000 limit for the year.
It may also be worth considering whether your payroll has been affected by other changes in circumstances – for example, your employers NI liability may have exceeded the £100,000 threshold for eligibility, you may have become part of a group of companies whose collective liability exceeds this, or you have become part of a group where another of the companies is already claiming the allowance.
GH Payscheme: Outsource your payroll for practical support
Being able to address payroll queries efficiently and with confidence is crucial for the smooth operation of any business.
By partnering with an experienced outsourced payroll bureau, you can alleviate the stress of managing these complexities and ensure compliance with the latest regulations.
We are committed to empowering you to focus on your core business activities, knowing that your payroll is in capable hands.
If you are ready to enhance your payroll processes and to benefit from professional support, contact us to discuss your requirements.
