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    Tag: national payroll week

    Celebrating National Payroll Week at PM+M

    Posted on by Laura Bannan

    As National Payroll Week draws to a close, we take a look at some of the exciting activities our payroll team has been involved in to celebrate all things payroll.

    We began the week by holding a payroll drop-in session where we invited people to come into the office to meet our payroll team and ask any payroll related questions they may have, including the potential implications and possible penalties that could come with getting it wrong. Thank you to those who joined us, we hope you enjoyed meeting some of the team and found the discussions beneficial.

    Our team also celebrated with a change of scenery for their team meeting, at the lovely Loom Loft Furniture & Interiors, where they were treated to a delicious breakfast.

    On Wednesday, we hosted a lunch and learn round table event in conjunction with Forbes Solicitors where a host of employment related topics were discussed, including holiday pay, National Living and National Minimum Wage, and pensions compliance.

    Our team put together some informative blogs which can be read here:
    Don’t get caught out by National Minimum Wage
    Could potential changes to workplace pensions impact your payroll?

    Finally, we launched a brand-new service, our Employment Tax Health Check service can highlight ways to improve your approach to the payments of benefits and expenses to your employees. Think you could benefit from an Employment Tax Health Check? Find out more by clicking here.

    Thank you for taking the time to find out a little more about our payroll team this National Payroll Week, if you would like further information or advice on any payroll related issues or would like to discuss how we could help you with your payroll, please contact our payroll director, Julie Mason below.

    The Construction Industry Scheme – payroll guidance

    Posted on by Helen Buchan

    The construction Industry Scheme (CIS) is a scheme set up by HMRC to collect income tax throughout the year from self-employed people working in the construction industry. Anyone who is self-employed in the building or construction trade, should be paying tax under the CIS.

    Construction companies should be deducting tax on behalf of their workers (subcontractors) and sending the money to HMRC as tax payments on the following basis:
    – 20% for workers who have registered themselves as subcontractors with HMRC
    – 30% for those who have not

    This is different from other self-employed individuals who aren’t part of the construction industry, who would normally receive their payments gross, meaning no tax is deducted.

    Who should register for CIS?

    All contractors must register for the scheme. Subcontractors do not have to register, but deductions are taken from their payments at the above higher rate if they’re not registered.

    GOV.UK explains how you can register for the CIS as a subcontractor and what information you will need to be able to register. There are different methods depending on whether or not you have already registered as self-employed and if you are working for yourself as a sole trader or through a different trading entity, such as a partnership or limited company.

    It is important to remember that registration under the CIS is in addition to registration as self-employed for Self Assessment, therefore for those new to both self-employment and the CIS, two separate registrations will be required.

    Get in touch

    If you require further information on the CIS or would like assistance with the submitting returns, our payroll team are experienced in supporting numerous clients operating within the construction industry. Get in touch via payroll@pmm.co.uk or call 01254 679131.

    A comment to note that the article does not constitute personalised advice and that advice should be sought before taking any action.

    Are you calculating holiday pay correctly for your employees?

    Posted on by Helen Buchan

    The current rules

    Current legislation states that almost all workers are legally entitled to 5.6 week of paid annual leave per year. This includes agency workers, workers with irregular hours and those on zero-hours contracts.

    As an example, for most employees who work 5 days per week, 5.6 weeks of holiday translates to a minimum of 28 days’ paid annual leave by law. Employers can choose to provide more leave than the legal minimum and if they do, they don’t have to apply the same rules that apply to the statutory leave to the extra holidays (for example, the company may have a policy that means a worker may need to be employed for a certain amount of time before they become entitled to the extra leave).

    Part-time workers are also entitled to a least 5.6 weeks of paid holiday each year, however this will amount to fewer than 28 days, and will be pro-rated based on their contracted working pattern. For instance, if an employee works 3 days per week, they must receive at least 16.8 days of annual leave each year (3 x 5.6).

    An employer can choose to include bank holidays as part of an employees’ statutory annual leave, but that being said, bank holidays do not have to be given as paid leave by law.

    Varied Pay

    It can be common for companies to employ workers with irregular hours and / or varied pay, e.g. those who work irregular shift patterns or overtime. This can make it harder to work out their holiday entitlement.

    These employees are still entitled to the statutory minimum paid leave, however their holiday pay should be calculated as the average number of weekly fixed hours they have worked in the previous 52 weeks at their hourly rate.

    If they are on zero-hours contracts, then holiday pay should be based upon their average pay from the previous 52 weeks, only including the weeks they were paid.

    If you are in a situation where your employee was not paid at all in any of the 52 weeks, you should count back to the weeks they were paid, up to a maximum of 104 weeks from the date they want to start their holiday. You should base your average on a total of 52 weeks in which the employee received payment (these 52 weeks do not need to be consecutive).

    Other Considerations

    If your employees earn regular commission or bonuses, you should include these in your calculations for holiday pay, as it should also take into consideration any additional payments that they receive on a regular basis. This is also the case for overtime, whether compulsory or voluntary, you should factor in any additional hours when calculating your employees’ average rate if the overtime is worked on a regular basis. You do not need to include voluntary overtime that is only worked very occasionally.

    Get in touch

    As it is important that employers calculate their employees’ holiday entitlement and pay correctly for each individual, the process can often be complex and time consuming. Our payroll team are here to support you with any queries you may have, please get in touch via payroll@pmm.co.uk or call 01254 679131.