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The Tax Year End is on the horizon

January 19, 2015

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Type: Latest Blogs, Payroll, Tax, Trending

As the close of the tax year approaches, this is an excellent time to ensure your payroll data is up to date and review your employee records.  For example, are their home addresses up to date? Do you have NI numbers for everyone?  What about Dates of Birth?

 

During the tax year, many employees will have moved home and omitted to inform their employer and HMRC of their new address. Consequently, following the year end process, employers are often requested to produce revised P60’s showing the correct address which can be both time-consuming and irritating.  Until the end of this tax year, it is the employees’ responsibility to inform HMRC of any change of address; however, from 6th April 2015, HMRC will update the employee records following the FPS submission made each pay frequency, but, of course, this can only be actioned if the employee has remembered to inform the employer!

 

Whilst it is not essential to have NI numbers on the employee records within payroll, it will inevitably make life easier in the long run, when dealing with contribution enquiries and for identifying employees.  Employers can perform a National Insurance number trace via Form CA6855 available on HMRC website; however, most payroll software now provides this functionality within the system.

 

A correct Date of Birth is a critical piece of employee information and payroll systems should no longer allow employees to be set up on the system without it.  It has previously been common practice, that, should a Date of Birth not be provided, then a default Date of Birth has been used in order to set up the employee record.  However, going forward, this practice should no longer be operated, especially with Auto-Enrolment now under way as the Date of Birth is a trigger for assessing an employee’s eligibility to join the scheme. The employee’s birth date is equally important in ensuring they are paid at least the National Minimum Wage.

 

On a slightly different note, banks introduced a switching service in September 2013 for their clients, whereby they will, within a space of seven days, transfer direct debits and standing orders to their new bank on their behalf under “The Current Account Switch Guarantee”.  They also offer to redirect to the new account, any incoming payments sent to the client’s old account by accident for a period of 13 months following the agreed switch date.

 

So how, does this affect payroll? It would appear that employees are failing to notify employers of the change of account for salary purposes and it is only when the 13 months come to a close and their salary does not reach their account that the problem is realised.  Although it is the employees’ responsibility to notify employers of changes of circumstances and details, surely, to avoid potential headaches and disgruntled employees, it would be beneficial to organise a procedure to ensure these circumstances do not arise, even if this is just by way of a simple comment on the employees’ payslips on a regular basis.

 

For more information, please contact Tracey Simpson.

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