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UK Payroll Boosts Government Revenue

11th Sep 2023
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Mercia is one of the leading providers of training and support services to the UK accountancy...
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Research published recently by the Chartered Institute of Payroll Professionals (CIPP) has revealed that £378 billion in tax and national insurance was added to the government’s coffers in the 2022/23 tax year through payrolls.

Here, we look at the myriad of areas that payroll professionals cover, consider the latest changes to payroll and how they could affect payroll professionals.

The CIPP’s research was carried out in order to be published during National Payroll Week, which began on 4th September 2023.

What does payroll encompass?

The payroll ‘umbrella’ covers a wide range of issues, including PAYE/Real Time Information (RTI) administration development; guidance on determining employment status; holiday pay calculations; statutory payments and developments; and workplace pension issues and developments.

Payroll departments are responsible for paying salaries; making sure the correct amounts of tax and national insurance are taken; applying tax codes to payslips; administering sickness pay; processing benefits; making accurate payments on time; and a host of other duties.

‘Modern tools’ required

Separately, Iris Software Group has urged for payroll professionals to ‘be supplied with the modern tools they need’ to ensure employees are paid correctly and on time. Data published by Iris revealed that 35% of UK workers have been paid incorrectly or late. A poll of payroll professionals conducted by Iris, found that 20% have called for better integration with payroll software. An additional 46% of payroll professionals stated they must manually enter employees’ details from their payroll program and into their payroll payment provider.

Additionally, 20% of payroll professionals still rely on spreadsheets or CSV files to export employees’ payment information to their payment provider, according to Iris’ research.

Key payroll changes for 2023/24

Some key payroll changes for 2023 include anyone of State Pension age having to pay the Health and Social Care Levy from 6 April 2023, with the employee national insurance rate remaining at 0%; an increase in all statutory payments from 2 April 2023; and the student loan threshold increasing for 2023/24 for Plan One and Plan Four, but remaining the same for Plan Two.

Demands on SMEs

Not all SMEs have a dedicated payroll professional or department despite needing to meet these demands. The effective administration of PAYE, national insurance, Statutory Sick Pay, Statutory Maternity Pay and the completion of statutory forms under the RTI regime are all areas where the services of an accountant can make a difference.

Mercia Courses

The Payroll and Employment Taxes - Essential Update course reviews matters affecting the operation of payroll and the taxation of employees, including national insurance implications.

Meanwhile, the Payroll Update – Highlights course focuses on the important updates and developments for 2023/24.