Payroll duties – make sure you don’t fall foul of HMRC rules

Are you struggling to keep on top of your payroll duties? If so you’re not alone.

A case that recently made headlines involved a law firm, which found itself in hot water after breaching Statutory Maternity Pay (SMP) rules.

The case, which was brought before an Employment Tribunal by HMRC on behalf of the wronged employee, was all the more embarrassing given the fact that the law firm in question is a specialist in employment law.

The case centred around two specific regulations within the Statutory Maternity Pay: (General) Regulations 1986 which relate to the definition of ‘employee’ and the evidence of confinement.

The practice had claimed that the individual in question was on unpaid work experience until August 2015 so did not have the required 26 weeks’ service and earnings to receive SMP.

However, both the employee and HMRC argued that she had the relevant service, earnings, and had met the evidence conditions. The tribunal found in favour of the employee and HMRC, deciding that SMP was due.

The rules that relate to payroll and auto-enrolment are forever changing and April has been a particularly busy month, in terms of new payroll and pension rules.

From 6 April 2018, minimum auto-enrolment pension contributions have increased. Employers are now required to make minimum contributions of 2 per cent, while workers need to pay in a minimum of 3 per cent of their pay.

From 1 April 2018, the rates for the National Minimum Wage (NMW) and National Living Wage (NLW) both increased, along with Statutory Maternity Pay, Statutory Paternity Pay and Statutory Adoption Pay.

Failures to pay the NMW or NLW, or make the correct level of contributions to workplace pensions both attract substantial fines.

On top of this, if your firm is named and shamed by HMRC for not complying with the rules, you could face serious damage to your reputation.

We understand that payroll can be a time-consuming and stressful task. Our team are able to sort out all your payroll and auto-enrolment obligations – leaving you to do what you do best, running a successful law firm.

To find out how we can help you with your payroll and auto enrolment duties, please contact us.