Pensions: Auto Enrolment

You may well have heard about Auto Enrolment, it is on its way so I thought some basic information would be useful....

Auto Enrolment is a government scheme to encourage people to save for their retirement by automatically including them in a pension scheme unless they opt out.

There are useful resources available detailing who it will affect and how it all works from the Pensions Advisory Service and The Pensions Regulator.

For employers the main point for now is when does it start.  This is known as the staging date and varies depending on the number of employees on your payroll.  The largest businesses have already started as their staging date was 1st October 2012.  For the majority of employers with fewer than 50 employees the earliest Auto Enrolment would start is 1st June 2015 see this table for details.

Even then the contributions employers make will be small so will have little impact on your payroll costs but it is another piece of red tape for employers so worth being aware of even if it is a little way off.

Bookkeeping in the Cloud

Remember the days when you used to back-up your accounts onto a 3.5” floppy disk, ready to send to your accountant so they could prepare your accounts for the year? And how often the backup was too large so spanned 2-3 discs and more often than not data was corrupted and required you to send in another copy? Technology has advanced a lot in the last few years, and there are specific advancements that could benefit you (and save you time and money) when keeping your accounting books and records.

People of all ages are now comfortable with using the internet for all manner of uses, and the concept of the cloud – being able to locate and log in to programmes and websites from anywhere in the world, is not only understood by most people, but practiced daily. You might be reading this on your iPhone, or on your desktop PC for example. The same principles apply with your accounts software package.

The traditional problems with CD ROM (disk) based accounts software packages is ensuring that we have the same version as you are using, and in addition, the same updates to that version. If not, then it makes changing data/reviewing your records more difficult. Whilst this is not a major issue, it can cause delay, which is not ideal if you require a quick answer to a question.

Using the cloud and the new wave of accounts and bookkeeping software such as Clearbooks, Xero, QuickBooks online and others, means that with login details and user rights, we can log onto your data, whilst you are on the phone, and see exactly what entries you are referring to. This gives you immediate piece of mind, saves time when we prepare your accounts, and ensures your other returns are more accurate (i.e. VAT returns you are submitting from the programme).

Furthermore, when it comes to your year end, you need only to send in the physical documents that we require, such as bank statements, and we do not need to worry about you sending in a backup on a USB stick and making sure we can load it onto a computer in our office. We can also see data that you have entered in the current period, which often answers some of the questions we otherwise may have when preparing your accounts.

Another time saving feature is the option to import your bank transactions straight from your online banking to the software being used.  You can even have a direct bank feed set up to automatically import the data.  All you then need to do is match the bank entries to the appropriate invoice.

You never need to worry about a backup again, as all data is saved “in the cloud”. Security is very tight also, and is comparable to the levels used by the banks for their online banking.

Prices vary depending on which programme you use, but are comparable with the cost of updating your software annually for the latest version on CD Rom, as many are used to. The cost is invoiced monthly, which  is also easier for cashflow. Furthermore, as a certified training partner for Clearbooks, we are able to offer discounts to the stated prices – again please contact us for details.

It is worth noting that the online cloud programmes offer free trials, so should you wish to give it a try, let us know and we can input some opening balances and run through the programme with you. Or alternatively, you can have a go yourself on the demo data that all of the online programmes have.

We have two certified training partners of Clearbooks in the Sidmouth office, being Duncan Akers and Adrian Coombe, and they can assist you in Sage One, Xero and QuickBooks online also.

For more information contact us directly, or peruse the cloud accounting software mentioned on the following sites:

http://www.clearbooks.co.uk/
http://uk.sageone.com/

http://www.xero.com/

http://quickbooksonline.intuit.com/

Are you ready for RTI?

What is RTI?

Real Time Information, or RTI, is a new system that's being introduced by HMRC to improve the operation of Pay as You Earn (PAYE). PAYE information will be collected more regularly and more efficiently when employers submit their regular payroll submissions.

How will it affect me?

Inevitably as HMRC streamline their operations the burden of reporting will fall on the employer.  Instead of sending information once a year at Payroll Year End, you'll need to submit information electronically to HMRC for PAYE, NIC and student loans etc. every time you pay your employees.

When will it happen?

Businesses will receive a letter from HMRC in January or February 2013 informing them of their start date.  For most this date will be April 2013 with everyone switching over by October 2013 in time for the introduction of the governments new Universal Credit.

What are my options?

If you run your own payroll system, you need to get RTI-enabled software in order to send your PAYE information to HMRC online every time a payment is made. You can do this in three ways:

1. Using commercial payroll software, upgrading your existing software if necessary (your provider can advise on this).
2. Using a payroll service provider, such as an accountant or a payroll bureau, who will do it for you.
3. Using one of the free payroll software packages or HMRC’s free Basic PAYE Tools, available to those with nine or fewer employees.

What do I need to do?

Don’t leave the preparation until the last minute.  There are actions you need to take and probably additional information you need to obtain from your employees.

• Make sure all your employee information (name, date of birth, gender, address and valid National Insurance number) is accurate and up to date.
• Register for PAYE Online, if you have not done so already.
• From April 2013, you will need to include new information in your payroll records, such as hours worked. You will need to complete employee information for temporary and casual workers and employees paid below the National Insurance Lower Earnings Limit.
• You should look at how operating PAYE in real time may affect your business more widely. For instance, you may need to change some of your procedures for starters and leavers. 

What next?

Before you ‘go live’ HMRC will perform a Payroll Alignment process by asking you to supply an extract of your payroll data in order that they can update their records to match yours.  You will then be ready for your first real time submission.

How we can help….

We are RTI ready; our payroll department can guide you through the requirements ensuring a smooth transition to the new system.  If you need assistance setting up, advice on the technicalities or would like us to run your payroll for you, please contact us on 01395 516658.

Work in Progress

New website under construction.  Watch this space [WEBSITE!] ....