To view the response go to helping users of HMRC's Basic PAYE Tools undertake automatic enrolment calculations in the document below.
The regulator consulted in April and May this year on proposals to develop a basic tool to support users of HMRC’s Basic PAYE Tools (BPT). Around 200,000 small and micro employers who use BPT are due to stage over the next two and half years.
While using software is not an automatic enrolment requirement, the regulator’s experience indicates that using appropriate software either through payroll or pension provider systems helps employers to comply with their duties.
The majority of consultation responses were supportive of our proposal, although some payroll firms and pension schemes were against the regulator developing a new tool.
There was widespread recognition that users of HMRC’s BPT will require some form of automated support for automatic enrolment. In particular, BPT users, employer bodies and a range of professional / advisory bodies expressed support for a basic tool being developed by the regulator.
While commercial payroll support is available, consultation responses from employers who used BPT suggest its existence alone will not be enough to result in a high percentage of BPT users opting to use such support. These employers are likely to attempt to assess their workforce and calculate contributions manually. This could lead to errors, additional burden on employers and non-compliance. For this reason, we believe there is a need for a tool to mitigate the compliance risk and ensure compliance remains the norm.
Executive director for automatic enrolment Charles Counsell said:
“We will continue to recommend that BPT users consider using software with integrated automatic enrolment functionality, but by developing this basic contribution calculation tool we aim to ensure that BPT users have access to the help they need to support compliance.
“The decision to develop a basic tool is recognition that significant numbers of BPT users will not seek a more integrated solution and will attempt manual calculations. This is another example of how The Pensions Regulator seeks to develop new ways to ensure we are meeting the needs of the diverse group of employers due to stage in the coming years.”
To ensure the basic tool will not have a negative impact on the existing payroll and pension market, its functionality will be limited.
It aims to mitigate the compliance risks associated with the ongoing monitoring of workforce eligibility (workforce assessment) and correct calculation of contributions. We will keep its need under review.
Employers downloading the basic tool from our website will be made aware that employers without software to help them with their ongoing duties have a range of options available:
• use commercial payroll software / services to comply with automatic enrolment duties
• use a third party (non-payroll) provider (including a pension provider that offers assessments), which will mean ensuring pensions contributions are entered into the BPT in each pay cycle
• use our tool
We will also include a link to lists provided by HMRC of payroll software most of which include automatic enrolment functionality.
The basic tool should be available to download from The Pension Regulator’s website by the end of 2015.
Helping users of HMRC's Basic PAYE Tools undertake automatic enrolment calculations, click below
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