An Accountant’s Master Guide to Combat Payroll in 2021
It’s payroll time of the year!
CJRS, furlough calculations and the never-ending payroll complications. Needless to say, this payroll season is going to be really exhausting for accountants. With an inevitable need to execute payroll on time, accountants are putting their best foot forward to make sure that their clients stay compliant with the changing legislation.
So, here’s an article discussing the challenges of this year’s payroll season and a one-stop solution to overcome those challenges.
The Payroll Challenges in the New Decade
From mental health issues from being under a prolonged lockdown to changing legislations post brexit, there’s have been many problems that accountants had to deal with in the past year and unfortunately, those problems didn’t end just like 2020 ended. There are some interesting hurdles that accountants have to cross this year and a few of the significant ones are mentioned below:
Keeping Up with The Changing Regulations
Advancements in technology and changes to the payroll system are the two major changes that are influencing the accounting industry. In 2020, we all have witnessed the changing of the employment rules and regulations in response to the pandemic. The HMRC introduced the Coronavirus Job Retention Scheme and salary calculations haven’t been that easy since then.
As per the scheme, the government took the responsibility of paying a certain percentage for the hours not worked, to a maximum limit of £2,500, however, this ‘certain percentage’ kept changing throughout the year which made the accountants put extra efforts and attention in order to make sure of continued timely, compliant as well as accurate payroll.
Getting Ready for IR35 Ahead of April 2021
Originally set to be introduced in April 2020, IR35 changes the off-payroll working rules in the private sector. The reformed rules of IR35 shifts the responsibility for determining the tax status of a contractor from the employee of the organisation.
The workers are already being affected by the upcoming IR35 rules, especially the freelancers and the contractors who have been harshly affected by the pandemic and still struggling to revive their financial and overall well-being.
The Government might/might not introduce any further changes in the future but for now, what we all can do is to keep a track of all that has been happening around this tax legislation and hope that the authorities will protect the rights of the workers.
High UK Debt Spurs Talk of Tax Rises
CJRS was a highly considerate move by the HMRC. The Government paid a huge sum of money in order to support those on furlough.
However, we mustn’t forget that the money that was paid came from somewhere, public treasury or borrowed money. Now when the country is getting back to its feet, the UK Government is contemplating on reviving the money and increasing taxes could be one of the measures to achieve this goal.
Coping Up with The New Ways of Working
No one would have thought that remote-working is going to be one of the long-term impacts of the pandemic. This new way of working forced by the pandemic has brought firm-wide challenges. Accountants have come across numerous logistical and technical barriers to overcome and enable themselves to work away from the office. They have assessed and implemented new technology and software and moved to online systems to digitise the payroll processes, which earlier were carried out offline.
Even though the process got optimised and became more efficient, this phase of transition has not been a smooth one for accountants.
Taking Care of One’s Mental Health
For the professionals in accounting, the readjustments didn’t just stop at the discomfort caused by the shift to virtual working. The fluctuating cashflow, navigating job retention schemes, accessing grants and avoiding financial losses have been something keeping them at a distance from peace.
With lesser face-to-face interactions, it is difficult for firm owners to check on their employees’ mental health and gauge their state of mind. Clearly, virtual collaboration is not an ideal method to maintain team morale and ensure a healthy work–life balance.
Outsourcing: A Silver Lining Amid the Grey Clouds of The Payroll Gruntwork
As accountants navigate their way through and beyond the pandemic, outsourcing becomes an effective tool for managing their workload during the hectic payroll season. You not only get the correct calculations but also make your payroll process more transparent and efficient.
Offshore teams mostly focus on three key areas: people, processes and technology. With a qualified and trained team of payroll experts, they keep up with the changing payroll rules. They have robust processes in place that focus on maximising automation, minimising manual data entry, and seamlessly accommodating new legislation, ensuring payroll compliance.
The Future of Payroll is Now!
The benefits of outsourcing have always been known to the world, however, virtual collaboration was a “major inhibitor” in many outsourcing transactions. Now, the onset of the pandemic almost banished the idea of physical co-location of resources. Workspace relationships have changed drastically; firms are becoming increasingly comfortable hiring an offshore outsourcing team and are all set to pave their way to bigger profits and more clients.
Change is indeed the new normal and this is high time to change your processes and make the best of the given opportunities. Act now!