Management Accounts

Are your payroll systems and Auto-Enrolment duties streamlined?

With over 200,000 small organisations using HMRC Basic PAYE Tools (BPT), it has become one of the most recognised payroll systems for many employers across the UK. But recent legislation over pension Auto Enrolment (AE) is likely to challenge the traditional system. Prior to now, BPT users have not had access to software functionality that supports them in carrying out their mandatory AE contribution duties. This has resulted in many business owners calculating their employees’ contributions manually, which is time-consuming and can potentially lead to non-compliance errors.

As a result, the Pensions Regulator has released an AE toolkit to assist users of BPT to calculate the contributions of their staff. However, the toolkit does present limitations and potential problems for small businesses.

The AE toolkit does not support multiple-pay frequencies or variable contribution levels. It automatically assumes that the legal minimum entitlement is being used and crucially, it will only support a maximum of 15 employees. The biggest limitation many businesses will face, is that the AE toolkit requires all entitled workers to be placed in an AE scheme on the same basis and this will greatly reduce the flexibility of the toolkit.

The Basic PAYE Tools also fail to produce documented payslips and, following AE legislation, it is now compulsory for employers to show an employee’s pension deductions and contributions on their payslip. The Pensions Regulator heavily encourages employers to use a system that can both integrate an employer’s duties and streamline the AE process together effectively, but unfortunately many systems do not currently provide this

So, if you are concerned about your current payroll system, get in touch today. We have the tools and expertise to manage both your payroll and Auto-Enrolment system efficiently.