Upcoming payroll changes may trip up unwary employers

Upcoming payroll changes may trip up unwary employers

Business owners are being reminded to take sufficient measures to prepare their businesses for the upcoming changes to legislation regarding payroll, which will come into force on the 6 April 2019.

The changes to the legislation are being introduced in a bid to improve the transparency around workers’ pay and how it is calculated by employers.

The move is part of a wide initiative by HMRC, to crack down on National Minimum Wage (NMW) payroll failings and auto-enrolment pension contribution errors.

In particular, it aims to shine a spotlight on company bosses who wrongly define workers as ‘self-employed’.

The new legislation will require employers to provide payslips to all workers, not just employees.

Crucially, payslips will need to be fully itemised, with a clear breakdown of hours where the pay varies by the amount of time worked.

The HMRC guidance allows these hours to be shown either as a single total of all such hours in the pay period, or alternatively broken down into separate figures for different types of work or different rates of pay. However, it should be clear in which pay period these hours were worked.

Payslips can be provided as printed or written documents or submitted to the employee electronically, providing it is received on or before their payday.

Ahead of the deadline, experts are urging businesses to act to ensure a smooth transition, as it is believed that many employers will need to completely revise their current payroll processes to ensure they comply with the new rules.

For more information on the new rules relating to payroll and itemised payslips, please contact us.