The changing payroll and pension horizon

The Chartered Institute of Payroll Professionals (CIPP) is the Chartered Institute for payroll and pensions professionals in the UK and is dedicated to raising the profile of payroll within businesses.
It has approximately 10,000 individuals enjoying membership benefits. Its education portfolio has been developed based on business and individual needs to ensure that is providing the most relevant training in the market. The policy and research team represents CIPP members and the payroll profession at government consultation forums in relation to the 160 pieces of legislation which impact payroll and pensions to ensure that the members know the most up to date information.
The CIPP is the only Chartered Institute for payroll professionals working in the UK alongside government department consultation forums, which allows us to advise the government about issues that will impact employers, in particular payroll departments, on behalf of our members.

We also provide all of our members, students and course delegates with the most up to date information on changing legislation.
In recent months we have seen fundamental changes such as real time information (RTI) and automatic enrolment affecting both payroll and pensions. And we are now seeing the introduction of shared parental leave legislation which will impact heavily on payroll processes.

What is on the horizon for 2015?
April has been a busy month for the payroll and pensions professional. We’ll start by looking at Shared Parental Leave, which has dominated the headlines over recent weeks and months.
Shared Parental Leave and Pay will be available for eligible couples from 5 April 2015, but, as it is not expected to be very widely taken up, not all payroll software will include the functionality to process Shared Parental Pay.

It’s important to note that payroll professionals need to plan ahead to ensure that they know how they will deal with any requests, should they receive one, if their software is not able to perform the calculations.
On a similar vein, there is an imminent change in regulations which will allow the DWP to issue a Direct Earnings Attachment, deducting at a maximum rate of 40 per, cent rather than the current maximum of 20 per cent in cases where the person has been prosecuted for the offence which gave rise to the benefit overpayment. 
Whilst the regulations came into force from 8 April 2015, the DWP will be working closely with the CIPP and the BCS that represents the payroll software industry on its implementation. Whilst Ministers would like to utilise the new regulations as soon as possible, they do recognise that without updated payroll software this would be difficult for employers to administer and it is therefore likely, that software will not be ready until April 2016.

In addition, April 2015 also saw the Employment Allowance (up to £2,000 per annum National Insurance savings) extended to carers. Staying with National Insurance savings, all those employers employing staff under the age of 21-years old will have a zero rate employer National Insurance contribution rate, up to the Upper Earnings Limit.
Those working in payroll will have also noted that April 2015 saw a revision in respect of tax codes. Previously a 50 per cent limit was placed on those codes prefixed with K, this rule now extends to all codes.
There’s also little escaping the general election of 7 May 2015. The CIPP has looked at each party election manifesto closely, to see how each of the proposals will impact on the payroll and pensions professional. It is the role of the CIPP to monitor changes in legislation and communicate the impact of these changes to members thus informing them of the latest developments.

Save the date!
It’s also fair to say that April 2016 promises to be just as busy. Payrolling of benefits, which according to PricewaterhouseCoopers will save employers £20m per year, is due to come into force from April next year, along with the recently delayed trivial benefits legislation.
The industry will be saying goodbye to the P9D from April 2016, which means the abolition of £8,500 threshold for all, except Ministers of Religion who earn at a rate of less than £8,500 per year.

Then there’s the matter of automatic enrolment. Some 135,000 companies are set to stage in January of next year prompting fears of a capacity crunch for the industry. There will be more small and medium enterprises staging, simplification rules and of course the new pension reforms for the consumer to name but a few. It promises to be an incredibly busy time. The CIPP will continue to offer advice for those yet to complete the automatic enrolment process through its Friends of Automatic Enrolment seminars. The Friends of Automatic Enrolment is the CIPP’s clarion call to all the payroll, pensions, software and advisory organisations to work better together so that employers have a better chance of handling their employer duties compliantly.
Its central aim is to be ‘a capacity crunch task force’ and is open to any organisation that wants to help prevent the failure of automatic enrolment, including employers that wish to find support and guidance on how to overcome the automatic enrolment challenges they face.

Guidance every step of the way
The CIPP offers its members access to an advisory service which is one of the most popular membership benefits. The service offers members speedy, accurate and authoritative advice on payroll and pensions topics. Further still, all calls made to the advisory service are treated in absolute confidence.
Another popular member benefit is the CIPP Payroll Assurance Scheme that has been developed to provide payroll departments with assurances. Their payroll and associated processes are fit for purpose and comply with government legislation. They have the right payroll activities in place. They have suitable processes in place for picking up and preparing for legislative changes. The Payroll Assurance Scheme will also highlight areas for development and improvement and help organisations prepare for an HMRC audit.
The CIPP is the only Chartered Institute for payroll professionals in the UK, and as such has close links with government which enables our Payroll Assurance Scheme assessors to provide up to date and informed support to organisations with regards to their PAYE processes.
Whilst the PAS is one way to ensure that payroll professionals are keep informed of changes in legislation, the CIPP News online service and its Professional in Payroll, Pensions and Reward magazine provides an informed and detailed look at some of the latest industry changes and how it will impact on the payroll and pensions professional.

The magazine features regular updates from the Policy team and it lists information about upcoming events designed to help communicate changes to those working in the payroll sector.
The CIPP hosts a series of national forums events, running in various locations across the country between May and July. The CIPP national forums – free to members – are the perfect opportunity to ensure existing knowledge is up to date with legislative developments in payroll and pensions. The forums also provides an opportunity for payroll and pensions professionals to network and learn more about other challenges facing professionals in the industry. There is also scope to find out more about how fellow professionals working in the industry are coping with changes in legislation.

Further information