All I want for Christmas is clarity on legislation.........

11th Dec 2019
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You get to look at the world through slightly skewed eyes when you are a payroll software developer.

This General Election has potentially been called at the worst time for payroll software; especially as it was coming off the back of an abruptly truncated parliamentary session and a Queen’s Speech only delivered on 14 October 2019.

Now, I’m not expecting great swathes of pre-Christmas sympathy, however it does have a serious knock-on to the end of financial year releases which you are all anticipating in April.

Because of the sudden conclusion of the last 2 parliamentary sessions, government did not have the usual time to “tidy up” and expedite the last requirements to finalise legislative changes that were close to becoming law.  And there is no certainty that these will ever come back onto the legislative agenda.

We are also now in the scenario where the Welsh Budget for next year is likely to go ahead pre-Christmas - as a published draft - on 16 December, with a follow up statement in January 2020.

The Scottish Budget - originally planned for this Thursday - has now been postponed until 2020, but quite probably won’t be available until after the UK Budget as without that, the Scottish Parliament will not have all of the information required to know their incomes from the UK as calculated under the Barnett Formula.

And nobody knows when the UK Budget will be - if the Conservative Party wins a majority then they have said this will be after they have delivered Brexit (so sometime in February 2020 given the 31 January self-imposed deadline to deliver Brexit).  If Labour win power then it could be earlier.  If we end up with a hung parliament then who knows?

Why does this matter?  Well, as it stands, on 6 April 2020 all tax allowances, rates for NI and statutory payments will remain as at 2019/20 levels - so no worries, we will still get taxed in 2020.

But on a practical level, assuming that new levels are set in UK and devolved Budgets next year, then software developers throughout the UK will have to be making last minute adjustments to rates.  And even worse, it is unlikely that a Finance Act would be passed by the UK Parliament until June or July 2020, with the new levels backdated to April; so any changes in April would be subject to details of the Finance Bill not being amended during its parliamentary passage.

There will quite possibly be some desktop payroll softwares that are struggling to get new levels/rates in place for April release dates - especially in respect of Scotland, where last minute changes are possible as, in the Scottish Parliament, the SNP require the support of the Greens to get their Budgets through as they don’t have a working majority).

But even more significant will be which of the legislative changes slated for April 2020 will be pushed through and which ones will be postponed.

To date, we know that the 52 week average holiday pay changes are going to take place in April and the same applies to the Employment Allowance changes.

However, we still need some final legislation to get the IR35 (Off Payroll) and Statutory Bereavement Leave changes through and some clarification on the final calculation for company car benefits.

These are broadly changes that have cross party support and have been known about for a long time, so the question may be whether they have the priority of parliament to get through in time for April rather than whether they will take affect at all.   But there has been a lot of focus on the IR35 changes should the legislation ultimately not passed - industry has not had the opportunity to wait on political process and has had to press ahead regardless.

These are also obviously larger development areas to build for software teams and equally a lot of work to prepare for in terms of advising clients. 

The outcome of the General Election is not far away.  Regardless of political affiliation/preference, software developers will be waking up on Friday morning and hoping for certainty and stability as quickly as possible.  If not, then we will all be hoping that Santa leaves us a crystal ball in our Christmas stockings.

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Christmas is a great time to start the process of changing your payroll software.  Moving to a cloud-based software means that legislative changes can be delivered right up until the last minute as there are no pre-determined deadlines for release dates.

So, why not try out KeyPay for FREE at keypay.co.uk and get a head start prior to April.