How To Stay Ahead Of Payroll Legislation
Staying ahead of payroll legislation is complex – fact. In recent years, the payroll manager or person responsible for running payroll has had to prepare for Real-Time Information (RTI) and auto-enrolment alongside changes to the Apprentice Levy and payslips to name but a few. It’ll come as no surprise that according to the CIPP, there are at least 174 pieces of regulation affecting payroll in the UK. As a business owner, you know the importance of getting it right – after all, no-one wants disgruntled employees, or to be fined – but balancing compliance requirements with all the elements of running a successful business is a challenge. So what can you do? Lynsey Hall – Payroll Product Specialist, shares her top five tips for keeping on abreast of payroll legislation. Plus, learn how a cloud-based payroll solution can deliver payroll efficiency, compliance and peace of mind.
1. Keep your payroll software up to date
Once you are aware of the changes, you will need to update your payroll software to stay compliant. In older systems, you may need to do this manually in which case staying organised is key. Set alerts for Common Commencement Dates; most laws come into play in April or October, making them easier to look out for. Keep an electronic calendar with alerts for monthly, last day of the month and annual deadlines, and build in time to review them in advance. Even better, consider cloud-based payroll software. Unlike older, on-premise systems, these solutions are designed to update in line with the very latest payroll legislation, so you never have to upgrade again. Such solutions also include updates to NIC and Tax parameters, so your payroll manager is freed from implementing legislative changes altogether.
2. Watch out for Dynamic Tax Codes
Dynamic Tax Codes allow you to make in-year adjustments to tax and NIC, but they can be a massive headache to implement. Again, a modern payroll solution will allow you to easily download and apply any tax coding notices from HMRC, so you don’t have to worry when an employee goes into a new tax bracket half way through the year.
3. Keep audit trails
Having a modern payroll system will significantly lift the burden of data gathering and validation, but it’s good practice to implement robust audit trails regardless. Such a system makes it visible when data was added, approved or changed, and by whom. So, if there is an issue, you can easily track back to rectify the problem. From changes to tax codes to overtime and deductions: whether the query comes from an employee or HMRC, you have all the information at your fingertips.
4. Consider e-payslips and centralised document management
From April 2019, employers are legally required to provide payslips to all workers, including a breakdown where there is variation in hours worked. The likelihood is that the legal obligations around data on payslips is only going to increase. Having a modern cloud-based payroll that is set up to deliver this granular data will make it far easier to keep up with payroll legislation. In addition, it’s really important to communicate legislative changes to staff.
5. Be proactive and stay current with legislation
Whether it’s a webinar or industry conference, there are many ways to increase your knowledge and stay compliant. After all, given the complexity of legislative changes and their impact on payroll processing, it’s important you understand the requirements and their implications on business. Legal professionals, industry bodies, your payroll software provider and, of course, HMRC will be able to provide information on the latest changes. This will help you keep ahead of the game and prepare your business for change.
Just a small amount of effort is, therefore, worth its weight in gold when it comes to understanding the legislation. And that’s made easier by leveraging the best that the latest cloud-based payroll has to offer. You’ll be more efficient, less frazzled and have greater peace of mind as a result. To learn more about the business benefits of moving to a modern, cloud-based payroll system, that’s always up to date and how Access can support you request a call from one of our cloud transition specialists.
