Sage Blog

Over the last few months I’ve had the opportunity to talk to a number of Accountants about the changes to Real Time Information for payroll (RTI) and what it means to them.

So, what is Real Time Information?

Real Time Information (RTI) is a HMRC initiative to improve the accuracy of PAYE, reducing the need to send out corrections for overpayment or underpaying and the possibility of fraud.

Under RTI employers will be required to submit information electronically to HMRC on or before they pay their employees instead of just once a year.

What has been clear to me is that there is a clear divide between people who think RTI is a good thing and those that don’t but one thing for sure is that almost all see it as just another compliance aspect they need to deal with on top of  Self-Assessment, iXBRL, Financial and Payroll Year End for their clients.

Use RTI to strengthen your business

Some Accountants I’ve talked to are looking at RTI increasing the time and administration of running a payroll and considering whether they need to increase costs but could this be counterproductive in that you may trigger some clients to look elsewhere.

Other forward thinking Accountants are looking at RTI positively in turning around their viewpoint that payroll is a loss leader but a great client acquisition tool in their business today into an opportunity to drive more clients into their business.

Whatever you think and feel about RTI, there is one thing that I would recommend that you do; communicate with your clients, let them know RTI is coming, let them know what it means to them and tell them not to worry about it. With the support of both yourselves and Sage inspire confidence that we have RTI covered.

Get ready for RTI ahead of the crowd

I’m a typical male who always leaves things to the last minute, but if I had the chance to get RTI Ready before most other practices I would jump at the chance. Well, if you want to get your practice and your clients Payroll RTI Ready before April 2013 you can.

You and your clients have the fantastic opportunity to not only be RTI ready but also help shape how HMRC and Sage provide on-going help and support.

Register now

If you are interested simply click RTI Pilot Registration and we will be in contact soon.

In my next blog I will be talking more about Sage’s plans to make the transition into RTI as simple and seamless as possible, but in the meantime you can find more information about RTI and we are doing on our website at www.sage.co.uk/rti

Neilson Watts – Sage Payroll Expert

Our guest blog comes from mercer-elect’s Simon Griffiths. You might know Sage for our  business software, but with mercer-elect we’ve recently started helping small businesses with their pension plans. So, Simon knows a thing or two about pensions and can tell his “asset classes” from his “fiduciary”. Here Simons slays some pension gobbledygook.

January 23^rd saw the arrival of the Chinese New Year and, in best Bruce Lee tradition, we now find ourselves in the Year of the Dragon.

Whether you are from the Dungeons and Dragons generation or one of the more recent Hungarian Horntail aficionados from Harry Potter; dragons portray a magical, mysterious, mythical image of scales, spiked tails, huge teeth and claws, not to mention the fiery breath destroying most things in its path. It is also true that this image generally comes unstuck at the hands of a fairly simple dragon slayer – armed with nothing more than a short sword or a broomstick. 

Pensions – let’s keep it simple

The same logic can be applied (with a little Harry Potter based imagination) to the myth that shrouds the pension environment. Mention a pension and everyone immediately thinks complexity, confusion and runs for cover. Even the National Employment Savings Trust Corporation (NEST), set up to manage the pension scheme designed as a result of the Government’s aim for individuals to have their own personal pension account, has produced a phrasebook to help individuals understand some of the phrases in common usage. It tells us they will:

• Avoid using phrases like “asset classes” to describe different types of investment or;
• “Fiduciary responsibility” to describe the legal duty to act in a member’s interest,

only to introduce other phrases like:

• Consolidation phase – to describe one of three NEST retirement date fund phases

All perfectly clear then – and this is before you even get to actuaries, longevity swaps and annuity rates!

Think of your pension as a savings plan

Why do we have to think it is so complicated? At its basic level a pension is a savings plan for when you retire, nothing more, nothing less.

Forget the retirement aspect for a moment. If you are lucky enough in the current environment to have some spare money at the end of each month, or have some savings that you want to put away, and you were faced with the following choices, what would you do?

What are your options?

OPTION A: Use a service that charges a high fee every year to cover their set-up and running costs, thus reducing the amount of your money that is left to be invested and, even then doesn’t pay any attention to what how your savings are growing.

OR

OPTION B: Use a service which has a low fee, thus leaving more money available to be invested – and has experts checking to make sure that they are getting the best rate of returns available

Simple – go for option B. So why is a pension any different?

That is why Sage Pension, provided by mercer-elect, has been established. To act as the simple myth slayer to make sure you can get good value and simplicity when you want to start saving for later life.

Auto-enrolment

Auto-enrolment may have been delayed for organisations under 50 employees (watch this blog for more information on this week’s announcement), but all other organisations will still have to ensure something is in place. Even if you employ less than 50 people, why wouldn’t you want to start saving and benefiting from the tax advantages sooner rather than later? For more information download our pension guide or visit the website at http://www.sage.co.uk/sage-pensions

So “Gong Hei Fard Choy!” as they say in Macau and Hong Kong or “Xin Nian Kuai Le!” in other parts of China to welcome the Year of The Dragon and remember, when you are looking to slay the complex pension myth – we’re here to help.

Let’s hear your confusing pensions terms

In the meantime, what are the most confusing pension terms you have come across? Add a comment and I’ll try and translate them for you.

Simon Griffiths, mercer-elect

Payroll Real Time Information

I’ve been sitting back with great interest both absorbing and reflecting certain people’s viewpoints on whether HMRC’s introduction of Real Time Information for Payroll is a good idea or not.

What is Real Time Information?

Real Time Information (RTI) is a HMRC initiative to improve the accuracy of PAYE, reducing the need to send out corrections for overpayment or underpaying and the possibility of fraud.

Under RTI employers will be required to submit information electronically to HMRC on or before they pay their employees instead of just once a year.

Goodbye Payroll Year End stress

Having run a payroll for a small business prior to working for Sage my initial thought was “well that means a lot more work submitting more than 52 times a year if I process weekly and monthly paid employees”. But after some reflection I realised the medium and long term benefits actually go way beyond just the payroll world.

In the payroll world we all know how stressful payroll year end can get with reconciling reports, finding errors, trying to remember what I did, trying to correct errors and so on.

Without being biased, as I work for Sage, submitting more often under RTI will ensure what you are submitting is more accurate as well as removing the stress and complication of payroll year end.

Beyond payroll, imagine a world where you get the benefits you deserve and are entitled to, imagine calling the HMRC or any other government body being able to resolve your queries quicker as they have up-to-date information. RTI will help deliver this.

RTI may seem disruptive in the short term, but I believe that RTI is absolutely the right thing to do for all involved to move us all dragging screaming and kicking into the 21^st century.

How would you like to be RTI Ready?

We’ve all heard of High Definition televisions and the term HD Ready right?  I’m a typical male who always leaves things to the last minute, but if my business could get a change to be RTI Ready before April 2013 even I would jump at the chance.

Well, you have that chance!

You have the fantastic opportunity to not only be RTI Ready but also help shape how HMRC and Sage provide on-going help and support by getting involved in our pilot. If you are interested simply click RTI Pilot Registration and we will be in contact soon.

In my next blog I will be talking more about Sage’s plans to make the transition into RTI as simple, seamless and pain free as possible, but in the meantime you can find more information about RTI and we are doing on our website at www.sage.co.uk/rti

Neilson Watts, Sage Payroll Expert

When was the last time you said ‘thank you’? Sometimes it’s a thing we take for granted, yet the impact of saying it can be huge.

Here at Sage, saying thank you is a big part of our culture and we have great policies and incentives in place that encourage a happy workplace. We have a great employee recognition scheme in place whereby you can nominate a colleague for a ‘Guiding Principle’ award, acknowledging them for a job well done. There are many ways to say thank you though and sometimes it can be as simple as saying those two words. So why say it?

Motivation

Saying thank you to the people you work with motivates them to do a better job. If you’re motivated, your levels of productivity naturally increase and you’re more likely to repeat the behaviour.

Happy customers

If your staff are happy, your customers are happy. Think about a time that when you had a great customer experience and what impact that had on your future dealings with the company. Did it make you more or less likely to use that company again?

Repeat business and word of mouth

When an experience leaves you feeling great you’ll want that experience again, leading to repeat business. You’re also more likely to tell others about it generating business through word of mouth.

Here in the Sage One team in UK and Ireland we recently launched a great new payroll service to the market along with our brand new website. This involved a lot of hard work and extra hours from the team so when our first birthday came around last week it gave us a great opportunity to say thank you to the team. We headed out for a few drinks and nibbles after work and, although our heads were slightly foggy the next day, we all returned to the office feeling motivated and ready to work hard and spread the feel good factor!

So once again I’d like to say a big THANK YOU to my colleagues across Sage for a great team effort in delivering a great service to our Sage One customers.  And channelling my inner Kate Winslet I’d like to take this opportunity to thank my family for making me who I am today, my friends for their support over the years, the family dog for being such an inspiration in my life, the postman for delivering my mail, GHD’s for giving me straight hair, the city of Newcastle for giving me The Forth (best drinking hole ever!), Friday’s for giving me the weekend……..

Abby Goode, Sage One

Tips for an easy self assessment

Like it or not, tax season is just around the corner. And as a small or medium UK business owner, this means that if you haven’t got your accounts in order, now is most definitely the time. We’ve created a guide to having a successful tax return season but I’ve covered some of our top tips here to help you.

Company accounts for the year 5 April 2011 must be prepared and filed online by midnight on 31 January. The first installment of your tax liability must also be paid by the same deadline.

Update: HMRC have announced the following The SA deadline remains midnight on 31 January. But HMRC will treat all returns that come in by midnight on 2 February as though they were submitted by 31 January. No customer will have to pay interest on payments due on 31 January that are paid on 1 or 2 February. Full details are available on the HMRC website.

This means it can be a tricky time for any small or medium UK business; tracking back over old invoices, getting paper work in order and paying tax liabilities.

Now, this may seem obvious coming from us but using an accounts software package throughout the year can often take away that last minute strain for you or your accountant.  However, whether you use an accounts software package or not, there are some key considerations and tax changes that you must be aware of to ensure a successful tax return season.

Effective tax planning strategies

We may be too far into this year’s tax season to put this into place now, but something to remember for the next financial year is how important it is to know your profits and therefore your tax liability. It will give you the opportunity to view what you might owe and allow you to put money aside throughout the year to ensure cash-flow doesn’t become an issue. An effective tax planning strategy might just be the difference in keeping your business afloat or actually allowing your business to grow!

Types on income and financial information needed

Regardless of whether you run your business as a sole trader or a shareholder/director of a limited company, to complete your self assessment tax return generally you will need details of the following types of income:

• Interest income from banks and building societies
• Dividend income received during the year from UK and/or foreign equities, or from shares in your own company
• Details of any capital gains made in the year through the sale of assets, such as shares or investment property;
• Property income, such as rental income
• Income received from gilts or bonds (excluding premium bonds)
• Income from a pension
• Income from a trust, settlement or from a deceased person’s estate
• Income from any employment , self-employment or a partnership

Payroll software to help with your income details

Your business’ payroll software should also come in handy for filing your tax return. The payroll should give you details such as employment income – salary, benefits, bonuses, income tax and national insurance already paid and, so on. Shareholder directors should also make sure they have up-to-date information in their systems of any dividends paid from the company to themselves.

Changes to the tax return penalty system: don’t be late!

Making it more important than ever to get your tax return in on time, the new penalty system means that an automatic fine of £100 applies if your tax return is filed after the end of January. And the longer you leave your tax return, the more severe the penalty becomes – meaning a very unhealthy start to the year ahead if your tax return isn’t filed on time!

The top tip for successful self assessment tax return is to really treat it with respect. After all, it is a legal document on which you are declaring your income for the year to HMRC. Proper record keeping and effective accounts management should see you successfully complete correctly and on time!

If you’d like to know more about filing your tax return online then download our white paper for having a successful tax return season

Nicole Matues,  Small Business Team

It’s a fresh new year. What better time to take a look at your business, set some achievable goals and set yourself up for success in 2012?

Go for a run every morning. Stop eating chocolate. Prunes for breakfast.

Personal New Year’s resolutions are often unrealistic and lose their appeal by February.

When it comes to business resolutions though, you need to think hard about what’s achievable and how to make it happen. A set of carefully considered goals can be your blueprint for the year and help take your business from strength to strength.

But where to start? Here are some suggestions to help you get going.

Don’t be a stranger to your customers. The beginning of a new year is the perfect time to revisit customer relationships. Ask your customers how you’re doing and how you might make improvements. Ask for honest feedback and don’t take it too personally. Just promise yourself you’ll strive to improve.

Look after your staff. Nurturing talent and staff welfare has fast become a ‘hot topic’ for all organisations, with many looking to improve internal collaboration. Make 2012 the year you stay on top of your HR, employment law and health and safety matters.

Time to upgrade? Take a fresh look at your business technology. Is it still up to scratch? An outlay now on more up to date technology could speed up key processes, saving you money and resources in the long run.

Batten down the hatches. Make sure your network is fully protected against viruses and hackers and is sufficiently backed up now. As we all increasingly make use of computer systems, it’s essential that the data stored on them is secure.

Update your site. When was the last time you refreshed your website? Has the content been changed recently? As a constantly evolving technology, websites can quickly look dated. Your website is often your first point of contact with customers, so make a pledge to spruce up your site if it’s needed.

These are just a few examples of how you can use the New Year as a stimulus to help make 2012 the most prosperous year you’ve ever had.

Matt Forrest, Sage People Advice Team

This year, the rules for our team’s Secret Santa are as follows:

•         £10 spend limit (we’re feeling flush)

•         All pressies to be under the tree by 9am 19 December.

Guessing the identity of the giver is as much fun as unwrapping the surprise (or in some cases, shock).  It took me a while last year to work out the Secret Santa responsible for popping my edition of ‘Pride and Prejudice and Zombies’ under the tree…surprisingly good if you like that kind of thing.

How much are you contributing to your workplace pension?

There’s a place for anonymous gift-giving but employee benefits definitely isn’t it – especially not in a challenging economic environment.  A study of 5,200 employees, published by Scottish Widows in September 2011, revealed that over a quarter of respondents (28%) don’t know how much, or even whether, they are contributing to their workplace pension scheme, and worryingly almost 4 in 10 (38%) have no idea how much their employer contributes.

What a waste!  It’s like going to the effort of buying the perfect Secret Santa gift but forgetting to put it under the tree (by 9am 19 December – did I mention that our Secret Santa organiser takes the role very seriously).

Attracting and retaining talent

In tough trading conditions we are all looking for our expenditure to work harder for us but could there ever be a decent return on investment on employee benefits expenditure?  Yes; the Scottish Widows UK Pensions Report went on to reveal that more than half of the respondents see a pension scheme as a reason to stay with their current employer and consider the pension offered by a prospective new employer before bonus potential, flexitime, a company car and overtime pay.  Attracting and retaining the right talent for your business can make the all-important difference in challenging times so make sure your employees (current and prospective) understand the value of the employee benefits you are providing and that your business gets the credit it deserves for offering them.

Guide to setting up a pension

Significant pension changes are on their way, one of the most talked about is auto-enrolment; this new law will make it compulsory for all employers to auto-enrol qualifying employees into a company pension scheme and make employee contributions. If you’re yet to set up a pension scheme for your employers check out our plain-English guide to Sage Pensions.

Our Sage Employee Benefits provided by mercer-elect offers a wide range of employee benefits (including pensions, private medical insurance and income protection) tailored to the needs of smaller businesses.  What’s more the service helps you to communicate the value of those benefits to your employees by providing an online portal through which employees can see the total value of the benefits provided to them.

And finally, for any stumped Secret Santas out there, check out www.thepresentfinder.co.uk, put in your budget and a range of quirky gifts appear (your colleagues will thank you for sparing them the usual bottle of wine or bath salts!)

Lucy Cook, Sage Benefits Team

On 30 November they’ll be a major UK public sector strike. We’ve already got in touch with some of our SageCover and Sage People Advice customers to give them some advice, but with so many of our customers affected we thought we’d share this information on our blog.

What are your options?

Thousands of workers from all aspects of the public service, including head teachers, NHS staff and refuse collectors are expected to down tools and strike.

Some schools have already announced that they will be closed if the strike goes ahead, but others may not inform parents or carers until closer to 30 November.

There are different options available to you and your employees. Discuss these with those employees who may need to take time off to care for children as a result of the strike action.

The main options for you to consider are:

• Booking annual leave. Employees may request annual leave as normal.
• Unpaid time off. Employees have a right to take unpaid time off to deal with an unexpected family crisis or emergency, which includes the disruption of childcare arrangements.
• Flexible working options. You could allow employees to take the time off and work
  the hours back at an agreed later date, or work from home if this is appropriate.

Don’t forget

Part-time workers have the same rights as full-time employees. If 30 November is a scheduled work day, then the employee can request unpaid time off or annual leave in the same way as a full-time employee.

Alternatively, you could agree for them to take time off on 30 November and work an alternative day or hours instead.

More information

If you are already a customer you can get more information from:

• SageCover customers with HR Advice – For further information, see the Emergency Leave for Dependants topic within the Employees>Holidays and Leave section of Sage HR Advice.
• People Advice customers – For further information, see the Emergency Leave for Dependants topic within the Employees> Holidays and Leave section of Sage People Advice.

Matt Forrest, Small Business Team

Our guest blog is from Simon Griffiths from Mercer. We’ve recently started working with Mercer to launch Sage Employee Benefits, a new service designed to make it easier and more affordable for small businesses to introduce staff benefits packages from medical insurance and life assurance to pensions. Here Simon gets us up to speed with the significant pensions change – auto-enrolment. This new law will make it compulsory for all employers to auto-enrol qualifying employees into a company pension scheme and make employee contributions.

Mercer is delighted to have entered an exciting new partnership with Sage to provide guidance and support on a wide range of employee benefit topics. I can assure you there is no intended link between the previous Halloween theme…. and our first step in to the world of pensions!

Before you switch off……

We know that discussing and arranging pensions is not high on everyone’s list of priorities, but with the first stage of pension reforms due to start taking effect from October 2012, it is something that you will need to get to grips with soon. Whilst most organisations will not need to do anything until some time later it could be advantageous to start planning sooner rather than later.  There are a lot of issues that need to be considered and early preparation will help ensure that you get credit from your employees for providing this valuable benefit for them.

What we have already heard…..

From some of the discussions we have already had with clients, a number of views have already been shared:

• “We’ve already got a scheme in place” – that’s great, but you need to ensure it meets certain qualifying criteria and not all current schemes do;
• “I have already offered my staff a pension scheme and no-one took it out, so they are obviously not interested” – previous legislation only required you to make a scheme available for staff to join, now they have to be included unless they opt out (subject to qualifying criteria);
• “It doesn’t apply to me” – the new legislation applies to all employers

The things to consider….

• Which of my employees does it apply to?
• Who pays what?
• What options are available?
• How will it operate?

All of these points are relevant and you can find advice from all sorts of places on the web, but don’t worry; Sage and Mercer are here to help. Through this blog, we will provide guidance on what you need to consider, when you need to consider it, how you should communicate it and, most importantly, when you need to do things by.

Getting prepared

For those who want to get a head start before our next instalment, you can get more information from our simple guide to Sage Pensions or through the Sage Employee Benefits website.

Simon Griffiths, Principal, Mercer

In just a few months, the world’s eyes will be focused on Great Britain during the London 2012 Olympic and Paralympic Games. And with the London Chamber of Commerce and Industry telling firms to get ready for the challenges, as well as the opportunities, our Sage People Advice service team have pulled together an essential guide to taking control during the biggest sporting event on Earth.

Curse of the sickie

Traditionally, employers can suffer from a depleted workforce during big occasions like the Olympics.  Employees may call in sick, either to stay home and watch an event, or because they’re suffering from the effects of the night before.

But by understanding how important the Games are to some employees and offering a fair compromise, you can use next summer’s event as a way to boost morale and productivity.

Communication is everything

Firstly, it’s important that you make it absolutely clear what your expectations during the Olympic and Paralympic periods are (27 July to 12 August and 29 August to 9 September respectively). Remind your employees of your absence procedure: who to call, when to call and so on.

Make it clear that if an employees’ sickness links directly to the Games, an investigation may take place and they may be asked to provide a medical certificate to support their absence. If satisfactory evidence can’t be provided to support the sickness absence, you should be clear about what action (if any) may be taken, ie disciplinary action.

Reach a compromise

Once that is communicated, you can begin to consider what you can offer to help employees enjoy the event, for instance:

• Implementing flexible working and shift-swaps.
• Providing an area to watch or listen to key competitions.

What Olympics?

It’s also important to remember that not everyone cares about the Olympics. Be careful not to exclude those who’d rather not get caught up in the excitement.

Jenny Graham, Sage People Advice team

From as little as £75* per month, Sage People Advice provides information and support on the issues covered in this blog and many more Employment Law and H&S matters. For more information, call our team on 0845 111 2450.*Price based on Sage People Manager 12 month contract