The Autumn Budget is a few days away (22 November) and it’s useful at this point to take stock of the changes already proposed and when they are scheduled to come into force.
Statutory payments and the bookkeeper
I have outlined three changes that are either being considered or are currently before parliament. All three of these will have implications for employers and for bookkeepers.
Each proposal will need additional administration as more complex employment situations are created, with the corresponding need for accurate and meticulous record keeping.
The dilemma for the bookkeeper is whether or not to start creating new processes in readiness or whether to wait until the proposal becomes law.
Parental bereavement pay and leave
July 2017 saw the announcement of a Bill supporting statutory paid leave for employees who have suffered the death of a child. Though further details are yet to be published the current legislation allows for:
- Day one right to at least two week’s Statutory Parental Bereavement Leave.
- Entitlement to pay after 26 weeks’ continuous employment.
The definition of a child is one that is under the age of 18, and pay would be at the same rate as other statutory payments. The leave has to be taken, (currently at least 56 days).
This Bill is currently at committee stage in the House of Commons. For further updates on its progress visit the parliament website.
Shared parental leave and pay
It is the government’s intention to extend shared parental leave and pay working grandparents. The extension was due to be in place by 2018. However, timescales appear to have slipped. The government confirmed in March 2017 that it is exploring alternative ways of supporting working families.
Flexible statutory sick pay
The current SSP system is an ‘all or nothing’ system in that an employee is either fully well, or too ill to work. It is not possible under current rules to adapt to situations such as phased returns to work so the employee is not encouraged to return to work. The current green paper, entitled Improving lives: work health and disability green paper proposes reforming the SSP system so that the employer tops up the employee’s earnings during a phased return to work. Two alternative ways are proposed:
- The employer would top up the earning to the level of SSP. The amount of earning would be the same until the hours worked increased to a level where earnings exceeded the level of SSP.
- The employer would pay a pro-rated amount of SSP in relation to number of hours worked. For example, an employee working 50% of contractual hours, receives 50% of normal pay with the employer topping up the earnings by 50% of SSP lost.
The Government hopes that the proposed system will be advantageous to both employer and employee. And support the employee by enabling a return to full work hours gradually. The consultation is now closed and we await the findings and further developments.
These three proposals will have financial and manpower implications for the employer. It would be in the bookkeeper’s interest to keep up to date on developments and communicate with employers as necessary.
Real Time Information
There are changes to Real Time Information (RTI) that are of note. These will come into effect from April 2018:
- Two new fields have been added for the car and car fuel benefits as payrolling of these will be mandatory.
- Completion of the ‘Serious ill health lump sum indicator’ field is no longer optional.
- A new field for the identification of which plan a student loan falls under is added.
It was announced in the August 2017 Employer Bulletin that the three-day easement for late filing will continue to 5 April 2018.
This will be of great relief to many agents and bookkeepers who are the only enabler of payroll processing with their organisation. However, do not delay plans for training an extra person in payroll processing, or arranging cover for holidays and emergencies with another agent. Every AAT licensed bookkeeper and accountant has to have a ‘continuity of practice’ agreement in place and this would be a good time to review the services covered.
Finally, all bookkeepers who process payroll should encourage employees to use their online Personal Tax Account to inform HMRC of any change of circumstance. This will not only ensure that the employee’s personal details and tax code are correct, but will also reduce the amount of time bookkeepers spend explaining that any under or over payment of tax is between the employee and HMRC.
Keeping abreast of the recent, current and proposed changes can be time consuming and may require constant reading. With the Budget looming it is entirely possible that more change is on the way. Bookkeepers and agents can be sure of one thing: change is now the new norm.
Julie Hodgskin is a fellow member of AAT, runs a licensed accounting practice and is a technical materials author for CIPP.