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:

Year No of changes Key change examples
1996 4 P46 forms, £5k beneficial loan threshold
1997 5 PAYE settlement agreements
1998 6 New travel expense rules
1999 18 Class 1 NIC reforms, National Minimum Wage, new CIS scheme
2000 16 Share incentive plans, EMIs, student loan deductions
2001 10 Stakeholder pensions, internet filing
2002 11 Company cars taxed on C02 levels, mileage allowance
2003 27 1% employee NIC rate on earnings over UEL, ITEPA 2003, Working Time and Flexible working rules
2004 18 PAYE Regulations 2003 come into force, Conduct of Employment Regulations
2005 23 New share scheme returns, merger of Inland Revenue and Customs & Excise
2006 23 ECJ makes rolled-up holiday schemes unlawful, age discrimination measures
2007 22 New CIS scheme, van benefit changes, Managed Service Companies PAYE and NIC rules
2008 21 Low emissions car benefit, migrant worker checks
2009 23 Higher rate tax threshold aligned with UEL, tips not allowed to be offset against NMW
2010 14 Personal allowance restricted for earnings over £100k
2011 25 Mandatory online filing of in-year forms
2012 27 PAYE RTI submissions start, lifetime allowance for pension tax relief, pensions auto-enrolment starts
2013 18 RTI becomes mandatory, Statutory Residence Test
2014 19 Pension allowances restricted, Employment Allowance starts
2015 12 Married Couples Allowance transferrable
2016 5 Single tier pension, Secondary NICs abolished for under 25 apprentices, contracting out abolished, Payrolling of benefits
2017 2 Apprenticeship 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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