Payroll

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Manufacturing company saves 80% on payroll processing costs with My SMART-e

Manufacturing company saves 80% on payroll processing costs with My SMART-e 1200 630 Growth Partners

Type of business: Manufacturing company
Date onboarded: 1 March 2022 

The company had operated a lean business model, relying on outsourced providers for tasks such as payroll and pension processing, but the costs seem to be ever-increasing. They had always outsourced their payroll and pension processing to an accountancy firm to unload the burden from the head office finance team. But the costs seemed to be getting steeper and the additional charges for administering one-off tasks such as furlough payments during the pandemic, or creating P60s, led them to look at their options.

With cost in mind, they turned to Growth Partners, who were able to take on their payroll and pension processing and their compliance while reducing their costs by a huge 80%.

“Growth Partners’ service fees are so reasonable – and even better, they’re set. So, no matter how many staff we take on or the one-off bonus payments we make, the monthly fee is the same. When we totalled up how much we were being charged every month and compared it to Growth Partners’ fees, it was a no-brainer.” 

More than payroll and pensions…

What started as a cost-saving exercise for the medical manufacturer, led to greater things as Growth Partners were able to assist with their employee engagement services too. 

The all-in-one solution for payroll, pension and employee engagement services means their employees have access to their payslips and pension pot via an app as well as a range of discounts, online GP services, counselling support and much more. 

“The discounts have really boosted morale among the team – being able to give employees the opportunity to save on everyday things such as groceries and kids’ days out is effectively a tax-free pay rise, at a time when every bit helps.”

Now almost a year into their partnership with Growth Partners, the company and their employees have expressed their satisfaction with the switch. Their employees tell them how much easier it is to have 24/7 access to their pay documents via the app as opposed to email and the discounts have been a real hit.

Our CEO of Employee Services, Scott Read said: 

“Our cost-effective proposition is something we’re proud of – we don’t want to bill our customers every time they ask for help, one fee covers everything. And the employee engagement support payment we give companies can make a big difference to their bottom line. We’re adding new services all the time to ensure our all-in-one solution for payroll, pension and employee engagement can really help businesses to grow.”

Find out more about our cost-saving solution 

To find out more about our all-in-one solution for payroll, pension and employee engagement services you can arrange a demo here. Or contact us and we’ll be in touch. 

My SMART-E all-in-one solution

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  • Amrik Birdi
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Cost of living crisis – is there a way out for you and your employees?

Cost of living crisis – is there a way out for you and your employees? 1920 1280 Amrik Birdi

Whether it’s soaring inflation, rising interest rates or changes announced in the Chancellor’s 2022 Autumn Budget, the cost of living crisis is impacting us all and hitting people differently.

Employees on a low income are impacted more as a bigger proportion of their income is eaten up by inflation. Those approaching or thinking about retirement will now need their pension pot to go further, raising questions about whether they can afford to retire or if retirement is sustainable. For others, the cost of servicing debt – be it credit card payments or mortgages – is leaving them with less money each month, forcing individuals to make trade-offs between necessities and savings. 

Furthermore, numerous scholarly articles have proven financial worries can impact employee productivity, mental health, lack of focus at work and absenteeism.

Without the help, and at least some level of guidance from their employers, employees may be likely to believe there are only two possible ways out of this crisis:

  1. Increase in pay in line with inflation –  this is one option to help employees cope, but this is not always possible, and even if it is, companies are unlikely to be able to keep up with rampant inflation. 
  2. Cut back on spending – without a pay increase, employees are likely to resort to cutting back spending and savings including pension contributions, which may impact their retirement lifestyle significantly.

How to support your employees to navigate the cost of living crisis

In some (limited) circumstances, increasing staff pay or cutting spending may well be the only way out of this crisis, but in most other circumstances there are other ways employers can support their workforce to navigate through the cost of living crisis and improve their employees’ financial wellbeing. 

We outline below some of the ways to help your staff improve the way they manage their money:

  • Employee benefits and discount scheme
    Discount schemes help employees save money on the things they want and need to buy. These can really make a difference now that people are seeing increased pressure on their finances. Making purchases via the employee discount scheme can help ease the financial squeeze because of soaring inflation. A recent survey by Opinium found that 36% of UK adults say they are already cutting back on what they spend.
  • Employee Assistance Programme (EAP) 
    This can help employees cope with the pressure that everyday life brings, and prevent personal problems impacting their work performance, health and wellbeing. An EAP can offer employees a wide range of support, including online resources, counselling, and referral services if they are struggling.
  • Pension guidance and awareness
    When times are tough financially, it may be tempting to reduce or stop pension contributions without understanding the long-term implications. In fact, according to research carried out by Barnett Waddingham, 7% of people plan to reduce their workplace pension contributions to keep up with the increased cost of living. This translates to 1.05 million people. Pension is not only one of the biggest perks in the workplace, but also an important, and for many, the only source of income in retirement. Therefore, it’s more important than ever that the benefits of pensions are well communicated to help employees avoid making decisions that they will likely regret later in life.
  • Financial education
    Financial education and guidance in the workplace can make a huge difference, giving employees the opportunity to learn about budgeting, money-saving tips, debt management, retirement planning etc. This can help employees make their money stretch further. Financial guidance can also encompass signposting to external services, for example, budgeting tools are available online such as Money Helper’s budget planner.
  • Salary sacrifice schemes
    Offering employees the option to exchange part of their pre-tax salary for ‘non-cash’ benefits such as childcare vouchers, company car, cycle to work scheme or additional pension contributions, is another way to help employees ease the squeeze on their finances without adding any extra costs to the employer. In fact, like the employees, employers also save money through the scheme by paying lower National Insurance contributions on the reduced employee wages – savings which can also be allocated to other areas of the business. Offering a salary sacrifice scheme is an excellent tool for employers to attract talent to the organisation.

The cost-of-living crisis is expected to be an unwelcome guest in the UK for some time so, supporting employees to build their financial resilience and improve their financial and emotional wellbeing is especially important right now. 

For more information about how we can help you and support your employees navigate through the cost of living crisis, visit our SMART Employment page and read more about supporting your employees’ financial wellbeing, emotional wellbeing and physical wellbeing.

Amrik Birdi, Pension Consultant at Growth Partners

blankAmrik has a wealth of knowledge in pensions having joined Growth Partners from KPMG where he was responsible for advising companies and trustees on independent DC provider procurement exercises, DC investment strategy review, DC pensions strategy review, automatic enrolment compliance, and meeting ongoing governance requirements. Amrik spent three years before this as a Pensions Guidance Specialist at Pensions Wise helping members understand their pension and retirement options, empowering them to take control of their retirement journey. With a Diploma in Regulated Financial Planning and Certificate in DC Governance, combined with a Degree in Economics, Amrik is a fully qualified pensions consultant and able to offer strategic support to our clients on their options for workplace pension schemes and auto-enrolment.

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  • Amrik Birdi
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Chancellor’s Autumn Statement 2022: How does it impact pay and pensions?

Chancellor’s Autumn Statement 2022: How does it impact pay and pensions? 1920 1280 Amrik Birdi

Chancellor Jeremy Hunt’s 2022 Autumn statement focused on prioritising stability, growth and public services but what does this mean for your employees’ pay and pensions?

The chancellor announced that the tax take from his fiscal statement will increase by just 1% over the next five years, and still ensure the UK maintains the most generous tax-free allowances of any G7 country. The thresholds and allowances previously announced for the highest earners however are set to change.

The chancellor was somewhat muted on the pensions front, with the only mention being the reinstatement of the state pension ‘triple lock’.

What are the key tax changes, what is the ‘triple lock’ and how does it affect the state pension?

How will the tax changes affect employees?

It’s good news in relation to tax bands for low earners – they haven’t been reduced so the income tax personal allowance is frozen at £12,570 until April 2028. Only employees earning more than this will pay tax and, of course, they will only pay tax on anything above £12,570*

*For higher earners, the £12,570 personal allowance will be reduced by £1 for every £2 of ‘adjusted net income’ earned between £100,000 and £125,140, again frozen until 2028.

The basic rate tax band will remain the same until 2028. For higher earning employees, the threshold for the 45% additional rate tax will be cut from £150,000 to £125,140 from April 2023.

Unlike the state pension however, the tax thresholds have not been increased in line with inflation.

What is the triple lock?

Introduced in 2010 by the Conservative-Liberal Democrat coalition government, triple lock guarantees that, each year, the state pension will rise by whichever rate is the highest of either:

  • Average earnings
  • Inflation – as measured by the Consumer Prices Index (CPI), or
  • 5%

As an example, if average earnings rose by 3% and inflation rose by 5%, then the state pension would be increased by 5%.

Why was the triple lock system introduced?

The triple lock was introduced to protect pensioners against the impact of inflation on money.

If the state pension didn’t increase at least in line with inflation, then you wouldn’t be able to buy as many goods and services with your pension as you did before.

Why was the triple lock reinstated in the Autumn Budget 2022?

Following the coronavirus pandemic, average wages were rising by over 8%, and sticking with the triple lock rules would have meant the state pension would also need to rise by 8% – an unprecedented increase which the government never saw coming!

As a result, the government announced the suspension of the triple lock for the 2022-23 tax year to ensure fairness between pensioners and taxpayers.

Retention of the triple lock was a Conservative Party manifesto commitment and has been the topic of much debate over affordability recently, however, in his 2022 Autumn Statement, the Chancellor confirmed that the triple lock will be reinstated from April 2023.

This means that, for the 2023-24 tax year, the state pension will rise in line with September’s inflation rate (10.1%) a formula outlined in the state pension triple-lock guarantee. For some people, the state pension will be worth over £10,000 next year!

In conclusion, this may be good news for some employees in relation to their pay and pension but as inflation rises, so does the cost of living. As an employer, it’s important to be aware of the changes and the potential impact on employees, not only financially but emotionally too.

Employees can check their income tax with their Government Gateway ID on the GOV.UK website

Employees can see how much state pension they’ll get and when using the GOV.UK State Pension Forecast

For more information about unburdening your business from payroll and pension compliance visit our SMART Employment page and read more about supporting your employees’ financial wellbeing, emotional wellbeing and physical wellbeing.

Amrik Birdi, Pension Consultant at Growth Partners

blankAmrik has a wealth of knowledge in pensions having joined Growth Partners from KPMG where he was responsible for advising companies and trustees on independent DC provider procurement exercises, DC investment strategy review, DC pensions strategy review, automatic enrolment compliance, and meeting ongoing governance requirements. Amrik spent three years before this as a Pensions Guidance Specialist at Pensions Wise helping members understand their pension and retirement options, empowering them to take control of their retirement journey. With a Diploma in Regulated Financial Planning and Certificate in DC Governance, combined with a Degree in Economics, Amrik is a fully qualified pensions consultant and able to offer strategic support to our clients on their options for workplace pension schemes and auto-enrolment.

Businessman Writing and Using Calculator
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P6 Tax Code Notice: What employers need to know about an employee’s P6 tax form

P6 Tax Code Notice: What employers need to know about an employee’s P6 tax form 1368 912 Growth Partners

At intervals throughout the year, it may be necessary to change your employee’s tax code, and a P6 tax code notice from HMRC will usually be sent to you when it is time to do this for the individual.

These changes to United Kingdom payroll tax can occur for a variety of reasons, the main ones being:

  • An employee’s tax-free income, or personal allowance, has either increased or decreased
  • A new employee has provided you with a P46 and HMRC inform you of the correct tax code
  • You have sent new tax codes for your employees at the beginning of the tax year

 What is a P6 tax code notice?

Issued by HMRC, a P6 form provides new details of an employee’s tax code to their employer, such as previous pay and tax.

A P6 is a form issued by HM Revenue and Customs (HMRC) to employers to provide details of an employee’s tax code, previous pay, and tax.

Should you receive a P6 tax notice from HMRC, you must check and/or change the respective employee’s tax code and, if applicable, enter previous pay and tax.

How do you get a P6 from HMRC?

P6 tax code notifications are now sent online as opposed to the traditional paper form. This can help employees to keep on top of requests and ensure everything is accessible in one easy place – your HMRC gateway.

Does a P6 override a P45?

In most cases, a P6 form will actually override a P45.

For example, if you take on a new starter who joins without a P45 as they have not yet received it from their previous employer, but they fill in a new starter checklist instead, the P6 will override the P45, even if it eventually becomes available at a later date.

This is because a P6 is issued by HMRC and is therefore considered more up to date and relevant than a late P45.

Do you need help handling your employee tax code changes?

The team at Growth Partners have many years of experience helping businesses to deal with tax code notifications, ensuring all matters are dealt with quickly and efficiently.

Simply contact us today to find out more about our services and how we can help you to change your employee’s P6 tax code as per HMRC requests.

Hand Placing Payroll Lettering on Wooden Background
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13 of our most commonly asked payroll questions: answered

13 of our most commonly asked payroll questions: answered 1413 886 Growth Partners

The world of HR and payroll continually changes, leaving many business owners with a multitude of questions.

Luckily, as experts in all things payroll, we’ve answered some of our most commonly asked questions, hopefully shining a light on any issues you may be facing yourself with your own managed payroll.

  1. What form do I need to complete if we stop SSP, but the employee is still off sick?

If you stop SSP when an employee is still off sick, you should complete an SSP1 form and send it to the employee. This will help them claim employment and support allowance.

  1. What is classed as a linked period of sickness?

A linked period of sickness is when an employee has regular periods of sickness that last four or more days each, separated by less than eight weeks, which have lasted for longer than three years. In this case, SSP will stop.

  1. When can I stop paying SSP? 

The maximum amount of SSP is 28 weeks. Additionally, If an employee has had continuous series of linked sickness that has gone on for more than three years, you no longer have to pay them SSP.

  1. What should I do when an employee’s tax code is wrong?

Usually, for new employees, if they haven’t completed a new starter checklist, their tax code will be wrong.  The new starter checklist is a HMRC form which all employees should complete on their first day of employment.

  1. My employee insists they have paid too much in deductions – what do I do?

Many employees don’t fully understand the payroll legislation for both Tax and NI and when this becomes payable. It is your responsibility to explain the process to them and clearly show them that they have in fact paid the correct amount in deductions.

We provide our clients’ employees with a dedicated customer service team to help explain all pay documents and any deductions over live chat, email or phone.

  1. Why has an employee not been enrolled into the pension automatically? 

Auto-enrolment is based on age and earnings. All employees are automatically enrolled after the 3-month postponement period if they meet the qualifying criteria (age 22 and earn over £10000).

  1. How do I opt an employee out of the pension scheme?  

Under The Pensions Regulator rules, it is up to the employee to complete an opt-out form which they must get directly from the pension provider. You cannot opt an employee out on their behalf.

Please note, rules around SSP and payroll are different for some workers, so you should always refer to the latest advice on GOV.UK.

Transferring your payroll 

  1. Does a transfer of payroll providers need to take place at the start of a tax year?

No, you can transfer payroll providers at any time without any disruption to payroll.  However, depending on who you choose to outsource payroll to, it may cost you more if you choose not to transfer at the start of the tax year. This is because some payroll providers will be required to recreate your whole payroll since the start of the tax year. This will take time and therefore increase your costs.

You can outsource your payroll to Growth Partners at any time of year without disruption to payroll and without any set up costs.

  1. What is a Real Time Information Pay ID?

The RTI Pay ID captures your company’s employee reference. You enter this when you set up a new employee on your payroll. The Full Payment Submission (FPS) must be sent on or before payday and an Employers Payment Summary (EPS) must be submitted by the 19th of the following month to avoid fines from HMRC.

  1. What’s involved in transferring payroll providers?

If you transfer payroll providers at the start of the tax year, employers need to send the new payroll provider a list of all current employee data along with salary details. If you transfer providers at any other time, your payroll provider will require a lot more data from you regarding previous salary payments.

However, you can transfer payroll to Growth Partners as part of SMART Employment model at any time with minimal data.

  1. What’s involved in transferring payroll providers to a PEO model? 

When you are transferring payroll providers and the HMRC liabilities as part of the PEO model, you need to send the new payroll provider a complete list of all current employee data, along with salary details. You also need to ensure employees are set to ‘leavers’ in the old payroll and produce a P45 for each of them. The P45s are not sent out to employees – they are sent to the new payroll provider only.

  1. How long does it take to transfer payroll providers?  

Depending on the size of the business and the complexity of the payroll, it can take between one to two weeks for small to medium businesses, and up to four to six weeks for larger businesses.  Some payroll providers may require longer than this – particularly if you wish to transfer your payroll midway through a tax year.

  1. Do I need to contact HMRC if I change payroll providers?

You do not usually need to contact HMRC if you change payroll providers. However, if you wish to outsource your payroll to specialists like Growth Partners who take on the HMRC responsibilities for you, then you will need to complete a year-end submission.

The year-end submission will confirm to HMRC that you have closed your old PAYE. This is usually done via an EPS submission once you have processed your final payroll. You will also need to confirm the cessation date on the submission.

Payroll business solutions

When you’re investing time into running your successful business, it can become difficult to keep on top of everything. By outsourcing your payroll, you can reduce your costs and save essential business time, allowing you to focus on areas that are important to contributing towards your continued growth.

Contact the team at Growth Partners today to find out more about our all-in-one solution for payroll, pensions, and employee engagement services.

What are the ir35 tax changes
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What are the IR35 tax changes and how do they apply to you?

What are the IR35 tax changes and how do they apply to you? 1340 1006 Growth Partners

The rules around IR35 and off-payroll working are changing, and from 6 April 2021, the new tax changes will come into force for the private sector. In this post, we discuss what’s changing, for who, and what the options are if you think you could be affected.

What are the IR35 tax changes?

From 6 April 2021, all private sector companies employing off-payroll staff – usually referred to as contractors – may have to take them on as an employee. If the employer dictates their terms, they can no longer be treated as contractors – they must, by law, be treated as employees.

Private sector companies receiving the services of a contractor will be responsible for deciding on the workers’ employment status.

The new rules make sure that all workers, who would have been an employee if they were providing their services directly to the client, pay broadly the same tax and National Insurance contributions as employees. These rules are sometimes known as ‘IR35’. The changes are all about making sure you have consistency in how you treat employees.

Who is affected by the IR35 tax changes?

The IR35 tax changes – also known as changes to off-payroll working rules – may affect any company receiving services from a worker who isn’t on their payroll. In most cases, these are companies that work with contractors. It could also be any worker who provides their service to a company through their own limited company or another type of intermediary such as:

  • a partnership
  • a personal service company
  • an individual

The company receiving the service is responsible for determining if the changes apply to them, rather than the worker providing the service.

You can use the gov.uk employment status for tax tool to help you determine any workers’ employment status.

What are your options?

  1. Do nothing

HMRC published a statement about supporting companies through this change and explained a ‘light touch’ approach to penalties will be taken in the first 12 months, unless there is evidence of deliberate non-compliance.

  1. Take the workers on as staff

Onboard these employees the way you would any new starter and include them in everything you do for your existing staff. This means a contract of employment agreeing pay, auto-enrolment pension, sick leave entitlement and the ability to accrue holiday leave and pay.

  1. Get business support from payroll and pension experts

You can outsource these responsibilities and the compliance that comes with it to a specialist payroll and pensions expert. You can do this just for the contractors or for all your staff.

How we can help

The change is coming, and we can help.

As payroll and pensions experts, we can advise you on your situation and the options available to you. Through our services, we can help process the increase in employees you are likely to have on your payroll and look after all of their needs. This means taking on the HMRC responsibilities – leaving you to focus on growing your business.

Through our SMART Employment model, we can also provide your new employees with the same range of benefits as other employees – making it clear your company is treating the new workers the same.

If your business is affected, contact us for a chat about your options or arrange a free, no-obligation consultation.

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