Posted by Lee Hellingsworth on February 9, 2017
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.