Are You Prepared For The Payroll Changes Coming In 2022?

What Is Payroll?

Payroll is a term used for lists of employees in a company and details how much each employee is paid. However, these days it is used for referencing employee wages and recording how much money employees have made over a specific time frame. If you are looking to start up your own payroll in US then please see here.

fPayroll is vital in any company where people have been employed to perform a role. Payroll is required to:

– Work out how much employees should be paid

– Work out how much NIC and tax need to be deducted from the gross pay of employees

– Report the pay details of employees to HMRC

– And the most important role is to pay employees on time

If you are busy registering your business (as an employer), the UK government website offers a guide on how to get started.

Employee Hours

If your employees are paid by the hour, you will need a system that monitors how many hours they are working, to ensure you are paying them the right amount.

For salary employees, you can also choose a system that monitors when they are working to make sure they are fulfilling their hours as stated in their contract.

Sick days will also need to be recorded for each of your employees according to the policy of your company, and any overtime that an employee has worked.

Working From Home and How To Claim Tax Relief (From April 2022)

According to the “emergency COVID-19 restrictions“, the Government gave instructions to businesses to allow their employees to ” try and work from home where and if possible”. This included legal requirements to self-isolate when an employee or one of their close contacts tested positive for Covid, meaning that for the tax years 2020 to 2021 and 2021 to 2022 millions of individuals across the UK became eligible to claim tax relief for any additional “household costs” that they incurred when they worked from home.

The rules surrounding eligibility for this tax relief have remained unchanged. However, when the pandemic restrictions are lifted, most people will no longer be able to claim or be eligible from April 2022.

Employees are offered the opportunity to use online services to claim tax relief if they work from home. This was a microservice introduced to assist with making claims processes faster. This will remain as it is for the 2022 to 2023 tax year. HMRC expects these levels of claims to start returning to something near to the pre-pandemic levels.

Employers still have the choice to reimburse their employees for any “reasonable” added household expenses if the employee incurred any of these while carrying out any of their employment duties at home.

When an employer has chosen to make payments to employees, the employee is prohibited from claiming from HMRC through their online service. However, if the payments from the employer are below £6 per week, the employee will be able to claim for the difference, if all the other requirements for eligibility have been met.

Employers can pay £6 per week NI and tax free, for a monthly pay frequency (up to £26 per month).

HMRC has also updated the guidance relating to claiming tax relief when an employee works from home. These updates include:

– Making the criteria for eligibility clearer

– Helping employees to better understand what they can and what they cannot claim for

Employment Income Manual Guidance For Hybrid Working

With many offices in workplaces now becoming hot desks and meeting spaces, HMRC recognises that there has been an increase in how many employers now provide hybrid-working arrangements.

As a result, they have provided updates to the guidance that covers the Employment Income Manual so that it reflects this. No changes have been made to relevant policies or legislation.

HMRC has introduced signposting pages (new) to accommodate travel expenses. The goal behind this was to improve navigation across existing guidance as well as highlight the pages most applicable to people that work under these hybrid-working arrangements.

HMRC has also amended the guidance relating to tax treatments of some of the homeworking equipment and costs, and homeworking deductions, to provide more confidence of HMRC’s view when it comes to applying such rules so that they also match up to hybrid-working arrangements.