The ever-growing complexity of dealing with payroll can best be illustrated by taking a brief look at what has happened over the last twenty years.

The payroll function has morphed into a monster of red tape and confusing regulation. Is it time to let the professionals deal with it for you?

Gone are days when you could sit down with a set of tax office paper tax tables and work out with paper pen and calculator the tax and National Insurance to deduct from wages. The growth in the use of software and payroll bureaus has been driven by the desire of business owners to reduce their exposure to the annual rise in the administrative burden of PAYE.

Without listing every change, if we can look back at the development of PAYE and NIC over the last two decades we can see the following key changes:

YearNo of changesKey change examples
19964P46 forms, £5k beneficial loan threshold
19975PAYE settlement agreements
19986New travel expense rules
199918Class 1 NIC reforms, National Minimum Wage, new CIS scheme
200016Share incentive plans, EMIs, student loan deductions
200110Stakeholder pensions, internet filing
200211Company cars taxed on C02 levels, mileage allowance
2003271% employee NIC rate on earnings over UEL, ITEPA 2003, Working Time and Flexible working rules
200418PAYE Regulations 2003 come into force, Conduct of Employment Regulations
200523New share scheme returns, merger of Inland Revenue and Customs & Excise
200623ECJ makes rolled-up holiday schemes unlawful, age discrimination measures
200722New CIS scheme, van benefit changes, Managed Service Companies PAYE and NIC rules
200821Low emissions car benefit, migrant worker checks
200923Higher rate tax threshold aligned with UEL, tips not allowed to be offset against NMW
201014Personal allowance restricted for earnings over £100k
201125Mandatory online filing of in-year forms
201227PAYE RTI submissions start, lifetime allowance for pension tax relief, pensions auto-enrolment starts
201318RTI becomes mandatory, Statutory Residence Test
201419Pension allowances restricted, Employment Allowance starts
201512Married Couples Allowance transferrable
20165Single tier pension, Secondary NICs abolished for under 25 apprentices, contracting out abolished, Payrolling of benefits
20172Apprenticeship Levy, gender pay gap reporting

Each year the payroll function becomes ever more complex, with more and more employers deciding to place this administrative burden in the hands of professionals such as ourselves. If you would like to discuss how we can help you, please contact our Payroll Team.

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