Five key payroll trends to watch out for in 2022
2021 has been another turbulent year for payroll. But with 2022 now just around the corner, we’ll all be hoping for a more positive and productive start to the new year. To help you keep you on top of your game, we’ve gathered together the key payroll trends to be aware of in 2022.
Dive into our round-up and set the best possible planning foundations for your payroll business.
1. More businesses to be affected by IR35 in 2022
The off-payroll working rules (or IR35 rules as we all now know them) came into force in April 2021. Medium and large employers are now legally required to check whether contractors should be classed as self-employed or as employees for tax purposes.
However, the IR35 rules mean that incorporated firms only need to apply the new rules in the tax year following two years as a ‘medium-sized firm’. At present, companies move into the medium-sized category when their turnover exceeds £10.2M, so any payroll clients that have newly passed the threshold won’t need to apply the IR35 rules until two years further down the line – a brief respite from the extra admin that’s involved.
So, if your payroll client had a turnover in 2021 of anything over £10.2m, the company will only need to begin applying the IR35 tax rules from the start of the new tax year on 6 April 2022.
2. PAYE compliance checks by HMRC a possibility
The changes to IR35 that came in last year transferred the liability from contractors to fee-payers. But although the buck now stops with the fee-paying companies when it comes to the employee test, it’s still possible that HMRC will investigate personal service companies (PSCs) to ensure that IR35 compliance is being met.
Reports of PAYE compliance checks being carried out by HMRC may be a slippery slope towards more aggressive checks into IR35 compliance. If HMRC believes that there is intentional abuse of the new IR35 rules, then investigations are more than likely to take place.
Find out how BrightPay can help you with your IR35 obligations.
3. Using automation to overcome the payroll skills shortages
The UK skills shortage is costing the UK’s under-staffed organisations £6.3 billion in extra spending. Many businesses are being forced to raise salaries, invest in training and bring in temporary staff to cope with the shortfall of skilled and unskilled workers.
The payroll sector is facing the same challenges, with many payroll bureaus, accounting firms and professional services providers finding it hard to recruit quality talent. So, how can your bureau cope with this lack of available staff? One way to overcome the skills shortage, in the short term, is to look at automating as many of your internal payroll processes as possible.
Smart use of automation will reduce the admin workload for your existing staff, allowing them to focus on higher-value, client-facing tasks in more detail and volume. Automate the syncing of your payroll journals, batch process multiple payrolls and automatically sync client entry of payroll details with your main payroll file.
4. Making the most of the lessons learned in 2020 and 2021
The past two years have been a turbulent and challenging time for payroll. But, having risen to the challenge, what we’ve seen is payroll providers being innovative, smart and proactive when it comes to getting their bureaus and accounting firms back to work.
Making use of online software tools has made a huge difference, allowing payroll teams to function at a distance while still remaining productive. Having systems in place for clients to enter their own payroll information, has also been a game-changer. Our BrightPay Connect software has been massively popular, allowing BrightPay users to offer online employee service hubs, client dashboards and cloud-based back-ups of all payroll information.
We’d love to see the payroll industry continuing to make use of these innovative solutions, creating a more up-to-date digital style of payroll that’s fit for 2022 and beyond.
5. A fully online version of BrightPay...coming soon
Having seen the difference that remote working and cloud platforms have made in 2021, we know that many of you will be eager for BrightPay to become a fully cloud payroll platform.
So, we’re overjoyed to announce that a fully online version of BrightPay is currently in development and being worked on as we speak. Customer feedback has told us that ‘BrightPay in the cloud’ is on most payroll providers’ wishlists for 2022, so we’re incredibly keen to get our new online version completed, tested and available to customers as soon as possible. And, as the icing on the cake, we’ll also be announcing some new names to our growing list of accounting software integrations. It really is all your Christmases at once!
We’ll be sure to update you on the planned release date for our online version. In the meantime, why not sign up to our regular news emails and be the first to know when updates are available.
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