PIXIE PAYROLL Blog

I’ve been to quite a few networking events recently where I’ve been asked how I came to own my own payroll bureau, so I thought it might be interesting to write this blog post about the journey and the qualifications I’ve gathered along the way.

My original plan was to become a legal secretary and after my time at Helston Community College, I went to Cornwall College and completed the ILEX Legal Secretarial course there. I was all set to go to Plymouth University to complete my legal secretary qualifications when I found out I was pregnant with my first son, so my plans had to change a bit.

Thanks to what was then called ‘New Deal’, I started to learn about payroll – although then it was all about paper P11s and manual tax tables – and found I really enjoyed it and had the knack for it. I also realised that I’d found something that I could work around my son that would also help to build a good life for us. As well as the in-house training, I started doing bookkeeping courses and at one point I held down 3 jobs at once. It was tough but worth it and I always made sure I kept the weekends clear so we could have some good quality family time.

After the bookkeeping course, I began taking the Association of Accounting Technicians (AAT) diplomas and I now have the Level 2 Foundation Diploma, Level 3 Advanced Diploma and Level 4 Professional Diploma. These diplomas covered all aspects of accounting including bookkeeping, financial administration, costing principles and evaluating financial performance. There was also a focus on ethical practices for accountants. I also have Level 3 & 4 specific payroll qualifications and I’m now a member of AAT and an AAT Licenced Accountant. I wish I could go back now and tell the 17 year old me that I would be able to pass all those exams!

Being an AAT member is very important to me as I think it gives my clients confidence that I consistently adhere to the high standards the association sets. It also means that I am always fully up to date with any new payroll legislation and will be able to help clients with any queries they may have. The AAT is also a great source of information and updates on accounting and finance in general which is really helpful for me and, believe it or not, sometimes even very interesting!

So, what’s next for me and Pixie Payroll Services? I want to go on welcoming new payroll clients to the business but as well, I’m thinking of branching out to more general bookkeeping and accounts preparation. That might mean I have to go back to studying and more exams, but I know that will be worthwhile and fulfilling for me and for us all as a family.

What will the new tax year bring?

As we reach the beginning of the 2019/2020 tax year, we’ve been advising some of our clients on the payroll changes due to be introduced on 6th April, so we thought it might be useful to write a blog about them.

Wage rates increasing

Both the National Minimum Wage and the National Living Wage are increasing. Currently all over 25s are paid the National Living Wage of £7.83 per hour but this will increase to £8.21 from April 2019. Other age bands are increasing as well – the full table of amounts can be found here.

New tax & National Insurance thresholds

Taxation thresholds will also increase from 6th April with the personal allowance (the amount you can earn without paying tax) increasing to £12,500. The basic rate of taxation remains 20% but the threshold increases to £50,000 before higher rate tax needs to be paid. These figures only apply in England, Wales & Northern Ireland; if you are in Scotland the rates are different.

National Insurance thresholds are also increasing with no NI due if your employees are earning less that £166 a week or £8,632pa. The upper threshold is increasing to £50,000 or £962 a week.

Tax and National Insurance calculations can be complicated and specific to each individual employee so although these figures are a guide, they may not apply to every employee. Get in touch if you need some specific advice on tax codes, tax and national insurance rates.

Auto Enrolment

There will be some changes to pension auto enrolment on 6th April. Overall, the total minimum contribution rate is increasing to 8% (up from 5%) so each employee will be adding more to their pension pot. The contribution rate for employers is increasing to 3% and for the employee 5%. It is the responsibility of all employers to administer their auto enrolment scheme correctly, so ensure you are prepared for these increases. As an expert in auto enrolment, I can help with any queries you have.

Statutory pay

There are various types of statutory pay including sick pay, maternity pay, paternity pay and adoption pay. These are increasing from April 2019 in line with the consumer price index so although the amounts are relatively modest, it will be important to have the correct rates to hand when calculating an employee’s pay. Full details on all the new rates can be found here.

Student loan thresholds

The amount an employee earns before they have to start repaying their student loan is also set to increase in April. Those with a Plan 1 loan will have to earn £18,935 before making repayments whereas those more recent graduates on Plan 2 can earn £25,725. The good news is that payroll software will calculate the repayment amounts automatically if they are due.

Payslips

From April 2019, all workers will be entitled to receive an itemised payslip which should include details on the number of hours someone has worked, if that would vary the amount of pay they receive.

This might seem like there is a lot of new information to digest and new calculations to be made. But the good news is that any payroll professional like me should be all set up and ready for the changes, so it will be seamless. If you do have any queries about the new tax year and how that might impact your payroll, just give me a call on 01326 336364 or email me: kellie@pixiepayroll.co.uk 

From 6th April 2019 the pension contribution rates are set to increase.

The employer rate increases from 2% to 3% and the employee rate increases from 3% to 5% making the total contribution 8%.

If you need any help with Auto Enrolment then please do not hesitate to get in touch.