Are You Ready For The Changes to Payroll Coming in 2022?
What Is Payroll?
Payroll is a term used to refer to a list of employees within an organisation and how much to be paid, but today it is more popularly used to refer to employee wages as well as making a record of how much money an employee has made over time. If you are looking for the best provider of global EOR around check out TopSource Worldwide.
Payroll is important in any business where people are employed to work. It is needed to do the following:
– Calculate the amount of money that employees need to be paid
– Calculate the amount of tax and NIC that should be deducted from employees’ gross pay
– Report the pay details of employees to HMRC
– To pay employees.
If you are in the process of registering yourself as an employer, the UK government website has a detailed guide on how to get started.
If you pay employees on an hourly rate, you will need to have a system in place for monitoring the hours that they work to make sure that they are paid the correct amount.
If your employees are on a salary, however, you may choose to monitor when they are working to make sure that they adhere to their contracted hours. You will also have to log each employee’s sick days depending on your company policy, along with any overtime worked by employees.
Working from Home: How to Claim Tax Relief Starting April 2022
The Government instructions to work from home wherever possible, as part of the COVID-19 restrictions, which includes the legal right to self-isolate if you or a close contact tested positive for COVID meant that in the tax years 2020 to 2021 as well as 2021 to 2020, millions of people throughout the UK were eligible to claim relief on the additional household costs associated with working from home.
The rules around the eligibility of the tax relief are still unchanged. However, since the pandemic restrictions have been lifted, most people will no longer be eligible to claim from April 2022 moving forward.
Employees can use the online service to claim tax relief for working from home. The microservice was introduced with the aim of helping to speed up the claims process. It remains in place for the 2022 to 2023 tax year. HMRC expects claim levels to return to something close to the pre-pandemic levels.
Employers still have the option of reimbursing employees for reasonable additional household expenses incurred by the said employees while carrying out work-related duties at home under the home working arrangements.
If employers choose to make a payment to employees, the said employees are not eligible to claim from HMRC via the online service. This is unless the employer payments are less than £6 a week. In this case, employees are eligible to claim the difference, but only if the rest of the eligibility requirements have been met.
Employees may pay £6 per week tax and NI free, but for monthly pay frequencies, it can be as much as £26 each month.
HMRC has updated its guidance on the claiming of tax relief for people working from home to:
– Make the criteria for eligibility clearer
– Help people have a better understanding of what can and what cannot be claimed.
Hybrid Working: Employment Income Manual Guidance
Now that so many workplace offices are being transformed into hot desks and meeting spaces, HMRC has recognised an increase in the number of employers that offer hybrid working arrangements and has consequently updated guidance within the Employment Income Manual to reflect this. No changes have been made to the relevant policies or legislation.
New signposting pages for travel-related expenses have been introduced by the HMRC. This is aimed at enhancing navigation across the existing guidance as well as highlighting pages that are best suited to people working under hybrid working arrangements.
HMRC has also introduced amendments to guidance on the tax treatment of certain homeworking equipment and costs, along with the homeworking deduction, to provide clarity on the HMRC’s view on how such rules are applied under hybrid working arrangements.