Helping HMRC Basic PAYE Tools Users with Auto Enrolment
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For the recording of the live webinar visit https://www.brightpau.co.uk/pages/on-demand/ The Regulator is urging payroll advisors and bureaus to help their clients get ready for their AE journey. It is expected that an increased number of small and micro employers will leave their AE duties until it’s too late or may even completely ignore them altogether. This webinar will take you through what you need to know about using HMRC’s Basic PAYE Tools and how you can help these users with auto enrolment. Additionally, according to research conducted by The Pensions Regulator (TPR), 49%, almost half of accountants asked did not know that new employers would have AE duties.
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Helping HMRC Basic PAYE Tools Users with Auto Enrolment
- 1. - The webinar will begin shortly… Helping Basic PAYE Tools Users with Auto Enrolment What you need to know about choosing a workplace pension scheme (BrightPay) (Aviva)
- 2. - Helping Basic PAYE Tools Users with Auto Enrolment By Paul Byrne Managing Director at BrightPay
- 3. - What you need to know about choosing a workplace pension scheme By Andrew Oldacre National Business Solutions Relationship Manager at Aviva
- 4. - CPD Accredited Attendees entitled to 1.5 CPD points Q&A Session Questions Tab or #BPWebinars Q&A CPD On Demand This session is being recorded REC
- 5. - Helping Basic PAYE Tools Users with Auto Enrolment
- 6. Paul Byrne – My Background • Accountancy Practice for 20 Years • Payroll software development • Expanded into the UK – BrightPay & Bright Contracts • Introduced BrightPay Connect • 100,000+ employers use our products
- 7. Webinar Agenda AE Compliance - Outline of employer duties HMRC's Basic PAYE Tools for Auto Enrolment The Pensions Regulator's Auto Enrolment Toolkit Importance of Payroll and Pension Integration New Employers and their AE Obligations How to help Basic PAYE Tools clients with AE BrightPay Demos for Basic PAYE Tools users
- 8. - Auto Enrolment Compliance: Outline of Employer Duties
- 9. Auto Enrolment Introduction • Auto enrolment – all employers in the UK must automatically enrol workers into a pension scheme • It is automatic for the employees but not for the employer • A number of duties that need to be completed to comply with AE
- 10. Auto Enrolment Duties Automatically enrol all eligible jobholders Communicate to workers Allow workers to opt-in and join the scheme Make deductions Manage opt- outs and issue refunds Complete declaration of compliance Automatically re-enrol eligible jobholders Keep records Maintain payments of contributions
- 11. Auto Enrolment Duties • These duties are ongoing and do not cease after staging • The responsibility for compliance rests with the employer • Small & micro employers are more likely to leave things to the last minute expected to turn to their accountant, bookkeeper or payroll bureau78%
- 12. - HMRC’s Basic PAYE Tools for Auto Enrolment
- 13. HMRC Basic PAYE Tools • Basic PAYE Tools does not cater for auto enrolment • Software is not a legal requirement but it does make processing AE much easier • Manually processing AE could be very time consuming and costly • TPR encourages employers to use payroll software
- 14. HMRC Basic PAYE Tools • Manually assessing the workforce & calculating contributions increases workload & risk of human error • Errors can consume additional time and staff resources to identify and correct • Using a manual system may seem like you are saving, but it represents a false economy
- 15. HMRC Basic PAYE Tools • TPR has released an AE Toolkit to help Basic PAYE Tools users with auto enrolment • A downloadable excel spreadsheet • The tool will indicate who needs to be automatically enrolled & provide contribution values
- 16. - The Pensions Regulator's Auto Enrolment Toolkit
- 17. TPR’s AE Toolkit Multiple pay frequencies Variable contribution levels Pay reference period Legal minimum entitlement Pensionable earnings Entitled workers Postponement Re-enrolment AE communications Pension submissions Payslips Up to 15 employees
- 18. TPR’s AE Toolkit • Adds to the already manual and time consuming process • Manual data entry will lead to increased risk of error and non-compliance Will the Pensions Regulator’s AE Toolkit actually help Basic PAYE Tools users?
- 19. - Importance of Payroll and Pension Integration
- 20. Payroll / Pension Integration • Some pension providers have released APIs to automate data file submission • Payroll and pension systems are directly linked • Eliminates the need to save data files and manually log in to the pension provider to upload the file • Enrolment and contribution files can be uploaded instantly
- 21. Payroll / Pension Integration • Useful for payroll bureaus – reduce time & workload • BrightPay – direct integration with Aviva, NEST and Smart Pension (others coming soon) • Further NEST integration – approve payments, validate groups, validate payment sources
- 22. - New Employers & their Auto Enrolment Obligations
- 23. Auto Enrolment for New Employers • From 1st October, new employers will have immediate auto enrolment duties • Duties start date: First date that an employee commences employment of accountants didn’t know that new employees would have AE duties49%
- 24. Auto Enrolment for New Employers • Inform TPR of the auto enrolment point of contact • Assess all staff to determine whether or not they need to be automatically enrolled • Communicate with ALL employees – not just those who have been enrolled • Complete the declaration of compliance within 5 months
- 25. - After 1st October this year, when will new employers have auto enrolment responsibilities? a) The employer will receive a staging date from TPR b) As soon as the first employee commences employment c) At the start of the next tax year
- 26. - After 1st October this year, when will new employers have auto enrolment responsibilities? a) The employer will receive a staging date from TPR b) As soon as the first employee commences employment c) At the start of the next tax year
- 27. - How to Help Basic PAYE Tools Users with Auto Enrolment?
- 28. Helping Basic PAYE Tools Clients Should you offer to handle their payroll for them? Should you advise them on how to best continue to process their own payroll in-house?
- 29. Helping Basic PAYE Tools Clients • Not all clients present a business opportunity for you • Outline what is involved in AE and let them decide how much they want to take on • Communicate the limitations of processing AE with Basic PAYE Tools
- 30. Helping Basic PAYE Tools Clients • AE does not have to be a burden for these small employers • Basic PAYE Tools users who have decided to use payroll software have saved time and effort • Payroll software enables the AE process to be easy and automated
- 31. Helping Basic PAYE Tools Clients • BrightPay – an ideal solution for micro clients to allow them to easily process payroll and AE in-house • Users do not need an in-depth knowledge of AE • Basic PAYE Tools import facility – import employer & employee data in less than one minute
- 32. Helping Basic PAYE Tools Clients Free Licence: 3 or less employees, AE functionality, free email support Standard Licence: £99 + VAT per tax year Unlimited employees, AE functionality, CIS, free phone & email support
- 33. Helping Basic PAYE Tools Clients • Offering AE as a service to clients? • Let payroll clients know what services you are willing to offer and your fees for doing so Free Guide: How to increase charges for AE without losing clients
- 34. Helping Basic PAYE Tools Clients • An integrated system will simplify and streamline AE and allow users to reduce their workload • Make sure that there are no limitation to the number of employers and employees • Pension scheme integration will offer further time-saving advantages
- 35. - Auto Enrolment Demo for HMRC Basic PAYE Tools Users
- 36. - Bureau Licence
- 37. - Upcoming Webinars: • 5th October @ 11.00 am: New Employers & their Auto Enrolment Obligations • 10th October @ 11.00 am: The Future of Auto Enrolment www.brightpay.co.uk/events
Notes de l'éditeur
- Welcome Sound test Volume
- First up today we have Paul Byrne, who is the managing director here at BrightPay. Paul is also a charted accountant having previously spent over 20 years running his own practice. Today, Paul will discuss Helping Basic PAYE Tools Users with Auto Enrolment
- Today we are also delighted to welcome our guest speaker – Andrew Oldacre who is here from Aviva. Today Andrew will present What you need to know about choosing a workplace pension scheme
- Today’s webinar is CPD accredited and you can benefit from 1.5 CPD points. If you would like a CPD certificate, please fill in the survey at the end of today’s webinar and we will send out the CPD certificates within the next few days. Q&A Recording & Slides
- Hi Everyone and thank you for joining us today. Just a small bit about myself before we start off
- My background is as a practising accountant. I started my own practice back in the 80s and eventually grew it to a 3 partner practice with 10 staff. While in practice, I provided payroll bureau services for about 30 clients so I have some idea what it is like in the front line. In 1992, I got into payroll software development - A large part of my reasoning for this was make better software than what I was using at the time. Eventually, I began working in software development full time. About 5 years ago, we introduced BrightPay and Bright Contracts in both the UK and Ireland. Last year, we released our most recent product, BrightPay Connect, which is an add-on to BrightPay payroll. This is an automatic cloud backup and self service portal for bureaus, their clients and their clients employees. I’ll give you a quick look at this later. Today, over 100,000 employers across the UK and Ireland use our products, a figure that we are improving on every year.
- So, here is the agenda for my slot today which I hope you will find useful and give you plenty of food for thought. When talking I will often refer to Auto Enrolment or Automatic Enrolment simply as AE and HMRC Basic PAYE Tools as BPT.
- So we will start off by outlining the employer duties required for AE compliance…
- Workplace pension’s reform in the UK means that every employer must automatically enrol workers into a pension scheme. This is called ‘Automatic Enrolment’. Auto enrolment is automatic for the employees but not for the employer. There are now a number of duties that employers need to undertake to comply with auto enrolment. Even if there are no eligible jobholders, certain steps need to be followed.
- To summarise the legal duties of auto enrolment, employers must complete the following duties: The employer must: - automatically enrol all eligible jobholders into an auto enrolment scheme, i.e. those who are above the earnings threshold and between 22 and state pension age. communicate to all workers providing timely and appropriate information allow non-eligible jobholders to opt-in and entitled workers to join a pension scheme make deductions manage opt-outs within the opt-out period and promptly refund contributions complete the declaration of compliance with the regulator to give details such as the number of eligible jobholders enrolled. automatically re-enrol and notify eligible jobholders who opted out of the scheme and did not join another scheme, every three years, and complete a re-declaration of compliance keep records of what they have done to comply with auto enrolment maintain payment of employee & employer contributions to the pension scheme
- It is important to remember that these duties are ongoing and do not cease once the initial staging process has taken place. Ultimately, the responsibility for complying with auto enrolment rests with the employer. If an employer fails to comply, the Pensions Regulator (TPR) will take action. Research by The Pensions Regulator shows that most employers want to do the right thing by their staff when it comes to auto enrolment. However, small employers are more likely to leave things to the last minute. As a result, there has been an increase in the number of compliance notices issued in recent months. It is expected that 78% of employers will turn to their accountant, bookkeeper or payroll bureau for AE advice and counsel. TPR is urging payroll advisors and bureaus to help their clients get ready for their AE journey.
- One of the most at-risk groups for non-compliance with auto enrolment is BPT users.
- These users are left at a disadvantage as BPT does not cater for auto enrolment. It is not a legal requirement to use software to process auto enrolment. However manually processing auto enrolment could end up being very time consuming and costly. The Pensions Regulator actively encourages employers to use payroll software that can assist users with AE tasks.
- Assessing the workforce and calculating contributions manually will lead to an additional workload. Manual data entry also introduces the possibility of human error. We all know that errors occur frequently when it comes to dealing with numbers and manually entering data into a computer. Anyone who lacks concentration or a knowledge of AE rules and regulations may have an additional risk of errors. Errors can also consume additional time and staff resources to identify and correct. With such important information to enter, users will make mistakes that can have consequences. The reality is that although using a manual system may seem like you are saving, it does represents a false economy for your business.
- Over 700,000 million small and micro employers are due to reach their staging date this year and many of these are BPT users. The Pensions Regulator has released a basic AE Toolkit to help these users with processing auto enrolment. The auto enrolment toolkit is in the form of a downloadable excel spreadsheet, where the employer will input employee information, including name, date of birth, qualifying earnings for the pay reference period and if the employee has previously opted in or out. The tool will then indicate who needs to be automatically enrolled into a pension scheme and provide employer and employee contribution values.
- As the toolkit is provided by the Pensions Regulator, many BPT users may assume that it will be the most appropriate solution to use for auto enrolment. However, there are many limitations to the software which reduce the scope of the tool. As mentioned previously, after manual data entry, the tool will indicate who needs to be automatically enrolled and the contribution values, but there are many of the mandatory AE duties not cater for.
- So you will see on the screen are some of the limitations of the Pensions Regulator’s auto enrolment toolkit: TPR’s AE Toolkit does not support multiple pay frequencies. If you have some of your employees being paid monthly and some paid weekly you will need to set up additional versions of the tool. Also in relation to auto enrolment, the tool does not support variable contribution levels and uses a tax-based pay reference period only. It assumes that the legal minimum deduction and contribution entitlements are being used, and so will be difficult to use if an employee is paying over the minimum threshold. The spreadsheet calculates contributions based on banded qualifying earnings only. If a user uses an alternative contribution arrangement, the tool will not be suitable for them. The toolkit only calculates contributions for entitled workers on the same basis as an eligible jobholder. For an entitled worker you do not need to pay an employer contribution, however, using the tool you will need to pay an employer contribution. Postponement cannot be used with TPRs AE toolkit, nor does it have the ability to support the re-enrolment process. It does not have any communications built into it. You will have to download the recommended templates from the Pension Providers website, which is a very manual task. The toolkit does not assist in creating enrolment and contribution files to send to the various pension providers. With regards to payslips, you cannot produce payslips with pension contributions, which is one of the legal requirements of AE And finally, the tool will only support up to 15 workers.
- There are some workarounds that you can do to get around some of the limitations, for example, you can create two versions of the tool for different pay frequencies. However, this is just adding to the already cumbersome and time consuming AE task each pay period. The question remains whether this tool will only add to current worries and stresses about auto enrolment or will it actually help HMRC users. While HMRC users want an easy to use and innovative solution, this AE tool is far from seamless and requires a lot of manual effort. As mentioned previously, manual data entry will lead to increased risk of error and non-compliance.
- Another important factor to consider to help reduce the workload and the risk of non-compliance is payroll and pension integration.
- Certain payroll providers have made real head way in terms of automation. Others have done little to change or update the functionality of their payroll programme. This direct integration allows payroll software and various pension providers to communicate or talk directly to each other, which is a similar concept to RTI. This pension integration means that users no longer need to save the data file to their PC and then log into the pension provider web portal to upload the data. Instead, data can be sent directly to the applicable pension providers at the click of a button from within the payroll software.
- This method of sending information between two systems will be of particular interest to bureaus who could have a large number of payroll clients. This integration will enable bureaus to reduce errors and reduce the time spent submitting their client’s files to the pension provider. Good quality payroll software technology will automate this repetitive and time-consuming payroll task. BrightPay has introduced this direct integration with Aviva, NEST and Smart Pension. Other leading pension providers are due to release similar API tools in the coming months to help speed up the data submission process for customers. BrightPay have further APIs with NEST to validate groups and payment sources, and approve contribution payments from within the software. This integration further streamlines the setup and ongoing tasks involved when using NEST as your pension provider.
- Since the rollout of auto enrolment began in 2012, all employers have had a staging date which kick-starts their employer responsibilities. However, from 1st October 2017, employers who become an employer for the first time will immediately have AE duties to complete for any staff they employ.
- If your client becomes a new employer after the 1st October, they will not have a staging date. Instead they will have a duties start date. Your client should be ready to comply with their legal auto enrolment duties as soon as the first new employee begins employment. Worryingly, according to research conducted by The Pensions Regulator (TPR), almost half of accountants did not know that new employers would have AE duties.
- Where your client is a new employer and about to employ someone for the first time, they will need to complete certain tasks in preparation for auto enrolment. Once they have registered as an employer with HMRC. As a second step, you or your client will need to inform TPR of the chosen point of contact for auto enrolment. On the duties start date, similar to a staging date, all staff must be assessed to see if they meet the criteria to be put into a pension scheme. Any eligible employees must be automatically enrolled into a qualifying auto enrolment pension scheme where the employer must also make contributions to the pension pot. All employees must receive communications informing them of how auto enrolment will affect them and what their rights are. Employers must also complete the declaration of compliance within 5 months of the duties start date, regardless of whether or not postponement is used.
- So just to make sure you are all paying attention we have a quick poll… After 1st October this year, when will new employers have auto enrolment responsibilities? The employer will receive a staging date from TPR As soon as the first employee commences employment At the start of the next tax year (Wait 30 seconds. Answer on next screen.)
- OK so most people got that question right – 95%. So the answer was B – the employer has duties to complete immediately once the first employee has started their employment.
- So the question remains – what is the best way to help clients using BPT to process Auto Enrolment…
- The big decision facing accountants with regard to clients who use BPT will be: Do you offer to handle their payroll for them? or Do you advise them on how to best continue to process their own payroll?
- It is important to determine whether or not you wish to offer payroll services to these clients or merely offer advice on how they should proceed… Not all clients using BPT present a business opportunity for you. These employers will typically be very cost conscious and may present too much of a challenge for accountants attempting to achieve commercially viable fees. You can still see them right by giving them correct and timely advice, and this will stand to you in the long run. It is important that you outline exactly what is involved in auto enrolment and then let them choose how much work and responsibility they want to take on. Make sure that they know exactly what they are getting into - communicate how difficult it will be to process auto enrolment with Basic PAYE Tools.
- Auto enrolment does not have to be a burden for these small employers. Fortunately, BPT users are not limited to using this tool. Let them know that there are a number of free or low cost options that will be immeasurably better than using BPT. BPT users who have decided to use payroll software have saved considerable time and effort. Automation has allowed these users to simply enter their staging date and the software automates the AE process, from staging to pension file submission.
- BrightPay is a software solution that will allow your non-payroll clients to process payroll and auto enrolment in-house. With BrightPay, users do not need an in-depth knowledge of AE – the software will automate many employer duties for you and alert you when an action needs to be performed. BrightPay has a BPT import facility which will allow users to import employer details into BrightPay in less than one minute.
- BrightPay is free for micro employers with three or less employees, including auto enrolment functionality and email support. For clients with more than three employees, BrightPay’s standard licence is just £99 + VAT per tax year, which allows users to process payroll for an unlimited number of employees, including auto enrolment functionality and free phone and email support. By recommending BrightPay, you can build a better relationship with the clients while helping with their auto enrolment duties. Should your client need help with their payroll or auto enrolment process, they can simply contact BrightPay’s customer support team.
- If on the other hand you are offering auto enrolment services to these clients, it is important to let them know what services you are willing to offer and your fees for doing so. For more information about auto enrolment fees, you can download our guide “How to increase charges for AE without losing clients”. This guide outlines 3 simple but effective pricing plans that allow bureaus to offer AE as a chargeable and profitable service. We will include a link to this in our follow up email.
- Whether your client processes auto enrolment in-house or outsources the service to you, it is important to have the correct software tools in place. The Pensions Regulator encourages employers and bureaus to use payroll software that can cater for and automate auto enrolment duties. An integrated system, such as BrightPay, will simplify and streamline auto enrolment, allowing users to reduce the workload and administrative burden on the business significantly. If you are processing auto enrolment for a number of clients, make sure that your chosen software has no limitation to the number of employers and employees. Some software providers charge users per employer or per employee. As mentioned earlier, pension scheme integration is another feature to look out for which will offer further time-saving advantages. It would be advisable to check that your current payroll system is compatible with your chosen pension scheme. BrightPay is compatible with 18 different pension providers, including API integration with Aviva, NEST and Smart Pension.
- So because we have Aviva on as a guest speaker today, I am going to show you a quick demo of how BrightPay and Aviva work together to make the auto enrolment process as seamless as possible. So I would now like to hand you over to ??? for a quick demo showing you just how easy auto enrolment can be with BrightPay. In this example we are assuming that the employer (or you on their behalf) has already registered with Aviva.
- So just to finish up our part of today’s webinar, if you wish to offer auto enrolment as a service to clients, BrightPay’s bureau licence includes unlimited employers, unlimited employees, full functionality for auto enrolment, RTI, CIS, P11ds, payrolling of benefits all for just £229 + VAT per tax year. Some of our newest features also include a payroll journal export to accounting packages, batch processing of RTI submissions, and much more. Obviously today’s demo was just a very quick overview of auto enrolment but if you would like an online demo of the software let us know – these demos take place on a daily basis and last approximately 30 minutes. So that’s it for our part of today’s webinar. Before I hand you over to Andrew I would just like to say if you do have any questions about today’s webinar or about the software feel free to type them into the questions bar and we will try to get through as many questions at the end of the webinar. And I will now hand you over to Andrew Oldacre from Aviva, who will present “What you need to know about choosing a workplace pension scheme”
- Thanks for that Andrew, that was very interesting. Just while everyone is sending through their questions, I would just like to say that our next two webinars are on 5th of October where we will have John Hale from NEST as a guest speaker, and then on 10th October we will have Henry Tapper joining us from Pension Playpen.