FAQ hub.
Welcome to the YPM Client FAQ hub.
Here you will find answers to our most frequently asked questions covering a range of subjects.
.png)
Tax codes & real time information.
Why if HMRC do RTI (Real time Information) does it take so long for payments to show/clear on my Government Gateway?
Although HMRC call it real time information that is because we have to report it to HMRC as RTI. HMRC only update there system the 12th of every month.
What is RTI
RTI stands for Real Time Information, this is sent by us every month using the payroll software to let HMRC know who has been paid what, if there are any leavers or new starters.
Tax Codes What Are they?
Tax codes are issued by HMRC to each employee, these can change each year and during the year.
Why do they change and who changes them?
HMRC will issue new tax codes if circumstance change for the employee. These can include but are not limited to: You have more than one income stream from a additional job and/or pension. State Pension amount changes Your on-job benefits have changed You started claiming marriage allowance
My employees tax code has changed can you phone HMRC for me?
As payroll specialist or employer we cannot speak to HMRC about a tax code change due to data protection. Only the employee can speak to HMRC directly regarding a tax code change.
Statutory paternity pay.
Statutory Paternity Pay (SPP)
Eligibility:
Employees must be – Father; husband or partner of the mother; child`s adopter; intended parent Have been continuously employed by you for at least 26 weeks before (any day) on the qualifying week. Earn £123 (Gross) per week in any 8 week relevant period.
SPP What is the employee Entitled too
SSP can be either 1 or 2 weeks consecutive weeks leave after the baby is born. SPP is £184.03 a week or 90% of their average weekly earnings
SPP What is the cost to the employer
The company can claim 92% of the of the statutory amount If the company claims small Employers Relief the company can claim 103% back. When claiming this will reduce your PAYE liability.
Statutory maternity pay.
What happens if your PAYE liability is lower then the maternity pay:
You can apply to HMRC for an advance which you can apply up to 4 weeks before the first payment.
SMP What are the employers cost
The company can claim 92% of the of the statutory amount If the company claims small Employers Relief the company can claim 103% back. When claiming this will reduce your PAYE liability.
SMP Eligibility:
Be on your payroll in the qualifying week which is the 15th week before the expected week of childbirth Have been continuously employed by you for at least 26 weeks before (any day) on the qualifying week. Earn £123 (Gross) per week in any 8 week relevant period.
SMP What is the employee Entitled too
They will get SMP for 39 weeks but eligible employees can take up to 52 weeks with the last 13 weeks being unpaid. The first 6 weeks they will get 90% of their average weekly earnings. For the remaining 33 weeks they will get £184.03 or 90% of the average weekly earnings whichever is lower.
Employment allowance & SER.
What Is Employment Allowance?
Employment Allowance is a benefit given by the government to help employers reduce their annual employers NI liability.
How much is it worth?
If eligible for Small Employers' Relief: You can reclaim 103% of statutory payments. This includes the full amount of statutory payments plus an additional 3% compensation for related employer costs.
If you haven’t claimed EA but think you are eligible can you do backdated claims?
If you believe you were eligible but haven’t claimed you can claim for the previous 4 tax years back to 2018 to 2019 when introduced.
Employment allowance was: £4000 – 2020/2022 £3000 – 2019/2020
Who can Claim it
Employment Allowance can be claimed if:
Your Class 1 NI liabilities were less then £100,000 in the previous year
If you are part of a group or connected companies the total combined Class 1 NI for all companies must be less than £100,000.
If only one Director and no employees are on the payroll you cannot claim, but if two directors with a minimum of £1047.50 per month then EA can be claimed.
What is Small Employers Relief?
Small employers Relief to reclaim a higher percentage of certain statutory payments, such as Statutory Maternity Pay (SMP), Statutory Adoption Pay (SAP), and Statutory Paternity Pay (SPP), from HMRC. It is designed to provide financial support to smaller businesses by reducing the cost of statutory payments.
Who can claim it?
How much is it worth?
If your business doesn’t qualify for Small Employers Relief do you still claim back SMP
If your business doesn’t qualify for SER: You can still reclaim 92% of the statutory payment costs.
Leavers.
How long will the employee have access to their own employee portal once marked as a leaver?
Employees have access the brightpay employee portal for 12 months after leaving the company.
If the employee has a company email address please provide us with a personal one which we can get treansfered over.
How is the P45 issued?
The P45 will be issued at the same time as the payslips, and will be sent via the employee portal.
What information do I need to tell you?
Last Day of Employment
Any Holidays owed by the company to employee
Any Holidays owed by the employee to the company
Any other additions or deductions due on last payslips
Person email address for Brightpay portal access
When do I need to tell you I have a leaver?
As soon as you know we can mark the employee as a leaver. This makes sure we issue the P45 in the correct month.
Starters.
How will the employee receive their payslips?
Each employee will receive an invite into Brightpay connect portal. This is where they will receive any pension letters, payslips, P60`s and P45`s.
What happens when I have a new starter and enrolment into pension?
If as an employer you use postponement we will send a letter via the portal explaining that they are in the postponement period and advise them the auto enrolment date. If as an employer you don’t use postponement we will asses if the employee meets the criteria for auto enrolment. If they do we will enrol the employee and send out a enrolment letter with information on how to opt out if the employee chooses. If as an employer you don’t use postponement we will asses if the employee meets the criteria for auto enrolment. If they dont we will send out a letter explaining that they don’t meet the criteria but if they wish to opt in and how they do that.
What happens if I have a student loan and what are each plan?
Plan 1 – You lived in Northern Ireland when you started your course: You lived in England or Wales and stated your course before 1st September 2012
Plan 2 – You lived in England or Wales and stated your course on or after 1st September 2012 Plan 4 – You lived in Scotland and applied through the Students Award Agency Scotland when you started your course
Postgraduate loan – You lived in England and started your postgraduate master`s course on or after 1st August 2016 You lived in Wales and started your postgraduate master`s course on or after 1st August 2017 You lived in England or Wales and started your postgraduate doctoral course on or after 1st August 2018
What are the options for the starter declaration?
Statement A This is my first job since 6th April and since the 6th April I have not received payments from any of the following: • Jobseeker`s Allowance • Employment and support Allowance • Incapacity Benefit Statement B Since the 6th April I have had another job but I do not have a P45. And/or since the 6th April I have received payments from any of the following: • Jobseeker`s Allowance • Employment and support Allowance • Incapacity Benefit Statement C I have another job and/or I am in receipt of state workplace or private pension.
What is the HMRC starter declaration?
When a new starter starts we either need a starter declaration or P45 this will make sure the employee is on the correct tax code.
What do I need to do if I have a new starter?
On the 10th of the month in your ‘Get ready for payroll email’ you will find the link to the google new stater form. Which we ask either the employee or employer to fill out.
Pensions.
What is postponement and who can use it?
You can choose to postpone automation enrolment into the pension for up to a maximum of 3 Months. You can use it if staff are in a probationary period but you must send a letter to inform staff that they are in a postponement period and on x date they will be assed to see if they meet the criteria for auto enrolment.
What are the different contribution models and what do they mean?
There are three different contribution models:
Qualifying Earnings:
Earnings between the lower and upper limits:
Weekly: £120 - £967
Fortnightly: £240 - £1934
Four-Weekly: £480 - £3867
Monthly: £520 - £4189
Pension contributions apply to income within these limits and include salary, wages, commission, bonuses, overtime, SSP, SMP/SPP/SAP.
Minimum contributions: Employee – 5%, Employer – 3%, Total – 8%
Basic Earnings:
Pension taken on pay without protected earnings, includes basic pay, holiday pay, SSP, SMP/SPP/SAP.
Does not include bonuses, commission, overtime.
Minimum contributions: Employee – 5%, Employer – 3%, Total – 8%
Total Earnings:
Pension taken on pay without protected earnings, includes salary, wages, commission, bonuses, overtime, SSP, SMP/SPP/SAP.
Minimum contributions: Employee – 5%, Employer – 3%, Total – 8%
What scheme do each of the main workplace pension providers use?
Relief at Source: NEST, The People’s Pension, True Potential
Net Pay Arrangements: Smart Pension, Now Pension, Creative Pension Trust
What is the difference between a net pay arrangement and relief at source?
Net Pay:
Pension contributions are deducted before tax and NI, with the full 5% taken from gross pay.
Relief at Source:
Contributions are deducted after tax and NI, with 4% taken from net pay and the pension scheme requesting the additional 1% from HMRC.
What is the difference between opting out and ceasing membership?
Opting out:
Employees can opt out within a specified window and receive a refund of contributions. Employers will also recieve there contribution back.
Ceasing membership:
Employees can stop participating in the scheme at any time, but will not receive a refund of contributions made to date, which will remain in their pension fund.
What if an employee doesn’t want to be part of the pension scheme?
Employees meeting the auto-enrollment criteria must be enrolled but can opt out. They must be given a letter explaining how to opt out which we send on the portal. If they opt out within one month, they will receive a refund of their contributions.
What is the minimum amount that employees and employers have to contribute?
As of June 2024, the minimum contributions are:
Employee: 5%
Employer: 3%
Both employees and employers can choose to increase there contributions into the pension this can be done as a percentage or a set amount each month as long as the minium amount is always reached.
If either the employee or employer choose to increase their amount this does not effect the other amount.
What is the difference between opting in and the right to join?
Opting in:
Employees choose to join the scheme, and employers must make minimum contributions.
Right to join:
Employees can join the scheme, but employers are not required to make contributions unless they choose to.
Does everyone have to be enrolled?
Employees must be enrolled if they meet the following criteria: Employees must be enrolled if they meet the following criteria:
Classified as a worker
Aged between 22 and 74 years old
Earning more than £833 a month (£192 a week)
Employees falling into these categories can choose to opt in or have the right to join a pension:
Opt in: Aged 16-21 or over 74, earning above £833 a month (£192 a week)
Right to join: Aged 16-74, earning £6,240 or less per year
What is a workplace pension and why do I need one?
Under the Pensions Act 2008, all UK employers must enroll eligible employees into a workplace pension scheme and contribute to it. This process, known as 'automatic enrolment', is mandatory for any employer with at least one employee, except for those with payrolls consisting only of directors.